Nigerian edtech startup, Edukoya, has officially shut down its operations. This is according to a statement provided to stakeholders by the startup. According to the statement, “Edukoya encountered significant market readiness challenges in scaling our synchronous learning model.”
The startup cited persistent challenges, connectivity limitations, limited access to devices, and broader macroeconomic headwinds as some reasons for its closure. The move marks a turning point for the company that once aimed to revolutionize online education for African students.
In 2021 Edukoya gained widespread attention for raising Africa’s largest pre-seed funding of $3.5 million, a few years later, it confirmed its closure via an email. It also suffered difficulties in scaling its contemporary learning model in a market which the startup claimed was not yet fully ready for such a shift.
Despite achieving significant milestones including over 80,000 students using its platform, more than 15 million questions answered, and thousands of daily live classes, the company decided that the best course of action was to wind down operations rather than “deplete resources while chasing scale in a challenging market,” according to the statement.
The startup has also proposed to return funds to investors, a move that has been seen as a prudent step to uphold investor confidence. The move to refund investor funds was made even as Edukoya faced financial challenges including the lack of disposable income among its target audience, compounded by tough macroeconomic conditions.
Edukoya’s 2021 funding milestone
Edukoya came into the limelight with an ambitious beginning in 2021. Founded by Honey Ogundeyi, it had an impressive pre-seed funding round of $3.5 million the largest pre-seed raise for an African edtech then.
The funding round was led by led by Target Global. Other investors that participated in the round include angel investors like CEO and co-founder of Paystack, Shola Akinlade; Founders of Kuda, Babs Ogundeyi and Musty Mustapha; Founders of Stash, Brandon Krieg and Ed Robinson; and CEO of Aux Money, Raffael Johnen among others.
Following its launch, the Edukoya app quickly gained traction, becoming the second most downloaded education app in Nigeria during its debut week.
The edtech was founded with the mission to build the world’s largest online learning platform for Africans by making high-quality educational content and support more accessible and affordable. The startup wanted to provide a link between African students and on-demand teachers via its digital curriculum content, thereby offering real-time online learning.
With offices in both Nigeria and the United Kingdom, Edukoya aimed to transform the way African students accessed education, particularly in a continent with a rapidly growing school-age population.
Edukoya’s decision to shut down and return investor capital could be met with mixed reactions. While the amount to be returned remains undisclosed, one investor praised founder Honey Ogundeyi’s decision, noting that it “demonstrates an ability to recognise when market forces make VC-scale outcomes unviable and return investor capital, thus upholding investor confidence.”
This measured approach, investors say, helps maintain trust and confidence in the startup ecosystem, even when faced with setbacks.
The African Edtech ecosystem still holds promise, with projections suggesting the market is projected to reach a value of around $57 billion by 2030, representing a significant portion of the overall education spending on the continent which is expected to grow to $740 billion by then.
Analysts believe that improvements in the continent’s internet connectivity and digital infrastructure could eventually pave the way for the successful scaling of edtech platforms.
As the edtech sector continues to evolve, Edukoya’s experience may serve as a valuable lesson for future innovators looking to navigate the complex interplay of technology, market readiness, and economic realities in Africa.
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