African edtech startup uLesson lands a $7.5 million Series A

ULesson, an edtech startup based in Nigeria that sells digital curriculum to students through SD cards, has raised $7.5 million in Series A funding. The round is led by Owl Ventures, which closed over half a billion in new fund money just months ago. Other participants include LocalGlobe and existing investors, including TLcom Capital and Founder Collective.

The financing comes a little over a year since uLesson closed its $3.1 million seed round in November 2019. The startup’s biggest difference between now and then isn’t simply the millions it has in the bank, it’s the impact of the coronavirus pandemic on its entire value proposition.

ULesson launched into the market just weeks before the World Health Organization declared the coronavirus a pandemic. The startup, which uses SD cards as a low-bandwidth way to deliver content, saw a wave of smart devices enter homes across Africa as students adapted to remote education.

“The ground became wet in a way we didn’t see before,” founder and CEO Sim Shagaya said. “It opens up the world for us to do all kinds of really amazing things we’ve wanted to do in the world of edtech that you can’t do in a strictly offline sense,” the founder added.

Similar to many edtech startups, uLesson has benefited from the overnight adoption of remote education. Its positioning as a supplementary education tool helped it surface 70% month over month growth, said Shagaya. The founder says that the digital infrastructure gains will allow them to “go online entirely by Q2 this year.”

It costs an annual fee of $50, and the app has been downloaded more than 1 million times.

With fresh demand, Shagaya sees uLesson evolving into a live, online platform instead of an offline, asynchronous content play. The startup is already experimenting with live tutoring: it tested a feature that allowed students to ask questions while going through pre-recorded material. The startup got more than 3,000 questions each day, with demand so high they had to pause the test feature.

“We want you to be able to push a button and get immediate support from a college student sitting somewhere in the continent who is basically a master in what you’re studying,” he said. The trend of content-focused startups adding on a live tutoring layer continues when you look at Chegg, Quizlet, Brainly and others.

The broader landscape

E-learning startups have been booming in the wake of the coronavirus. It’s led to an influx of tutoring marketplaces and content that promises to serve students. One of the most valuable startups in edtech is Byju’s, which offers online learning services and prepares students for tests.

But Shagaya doesn’t think any competitors, even Byju’s, have cracked the nut on how to do so in a digital way for African markets. There are placement agencies in South Africa and Kenya and offline tutoring marketplaces that send people to student homes, but no clear leader from a digital curriculum perspective.

“Everybody sees that Africa is a big opportunity,” Shagaya said. “But everybody also sees that you need a local team to execute on this.”

Shagaya thinks the opportunity in African edtech is huge because of two reasons: a young population, and a deep penetration of private school-going students. Combined, those facts could create troves of students who have the cash and are willing to pay for supplementary education.

The biggest hurdle ahead for uLesson, and any edtech startup that benefitted from pandemic gains, is distribution and outcomes. ULesson didn’t share any data on effectiveness and outcomes, but says it’s in the process of conducting a study with the University of Georgia to track mastery.

“Content efforts and products [will] live or die at the altar of distribution,” Shagaya said. The founder noted that in India, for example, pre-recorded videos do well due to social nuances and culture. ULesson is trying to find the perfect sauce for videos in markets around Africa and embed that into the product.