This document is the structure of a presentation and is incomplete without oral comments and discussion.

Brief introduction to education entrepreneurship landscape in Brazil

So Paulo, February 2013
Thiago Rached Pereira - thiago.rached@gmail.com
tera-feira, 18 de fevereiro de 14
Industry recent background
Source: Main business publications, Companies IRs website, TRs analysis
+ Consolidation in the segments of: publishing, K12 educational
systems and higher education
+ Management professionalization due to PE investments, M&As
and IPOs
+ Arrival of international players: Santillana, Laureate, Devry,
Pearson.
1990-2000s Market consolidation in regulated
segments with traditional models
2000s
+ Fierce competition in the professional skills and language
learning ofine segments through franchise models
+ Consolidation in the corporate training segment, Afero and
CiaTech as main current players
+ Sale of Grupo Multi to Pearson (R$ 1.7B) and Wise Up to Abril
Educao (R$ 870M) in 2013
Fast growth of businesses in non-
regulated segments
Last two decades were fundamental to the professionalization of the industry, now
led by few large players in the regulated and more traditional segments
tera-feira, 18 de fevereiro de 14
Industry recent background
Late 2000s Emergence of EdTech startups at
non-regulated segments
+ Most models focused on online courses to
adult learning, specially professional skills
+ First VC investments in the space
+ Very few were able to scale and expand users
life-time-value due to low quality
educational experiences
+ Very little educational innovation
Early 2010s Emergence of EdTech startups in
regulated segments, specially K12
+ Startups targeting new segments in adult learning: test-prep, language learning,
test prep to public service entry exams, technology
+ Greater diversity of models: new classroom methodologies, online learning objects,
ERP for schools, test-prep platforms, educational games, among others
+ More recently, launch of several companies in the K12 space
+ Growth of international players in the language learning space: EnglishTown and
OpenEnglish
+ More attention from VCs, slowly increasing investments in the industry
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There has been a good hype around education entrepreneurship in the last fve
years, now concentrated on K12 new EdTech models
Source: Main business publications, Companies IRs website, TRs analysis
tera-feira, 18 de fevereiro de 14
Industry current and future stage
Education entrepreneurship is in its very initial phase in Brazil. End of frst investment cycle,
between 2015 and 2017, will reveal how relevant is the opportunity
2007-09
+ First education startups being founded, most of
them with low education and business impact
+ First VC investments being made, in a very early
stage, little clue about what to expect
+ Little potential cohort of companies, with very
few exceptions
2010-2013
+ New wave of VC investing with new funds
focusing on the space
+ Improved cohort: better teams, models and
larger markets been targeted
2017+
+ A new and more prepared generation of
startups will emerge, learning from the
pioneers mistakes and best practices
+ Beginning of faster technology adoption in
education, specially at schools
2015-2017
+ Promising startups will have their models
proven or not
+ Better idea of the maturity of many segments
regarding technology adoption
+ Ecosystem will b more developed
Better
understanding of
the education
entrepreneurship
opportunity in
Brazil
Source: TRs analysis
tera-feira, 18 de fevereiro de 14
The ecosystem (K12)
Challenge: to change traditional ofine behavior to new digital paradigms
Opportunity: gradual disruptive innovation, start very simple and
empower the teacher
Teachers
Entrepreneurs
Investors
Challenge: to assume the long-long term it will take to build a
high-impact education company in K12
Opportunity: cash is king, prove model, than invest on scaling
Talents
Challenge: to fnd the right set of talents in management,
education, technology and distribution
Opportunity: to get senior advisors in each space, they can
help mapping and attracting the best ones
Foundations
Challenge: to navigate in a very complex space, identifying and
supporting impactful projects
Opportunity: to fnd the best people and build the projects around them
Government
Challenge: to deal with its complexity and innovate
respecting regulation and public purchasing policies
Opportunity: not to go against it at frst, to fnd advisor/
executive that understands its sale process
Schools
Challenge: to defne a sale and relationship cycle respecting
its hierarchy and rules
Opportunity: too sell little, pilots, maybe for free if necessary.
Once with students and teachers engaged, sell strong
Students
Challenge: to make them love you
Opportunity: focus on engagement product-wise, not
features
Stage of maturity
The ecosystem is uniquely complex. The entrepreneurs have great challenges and
opportunities to deal with each of its players
Unfortunately, higher education institutions in Brazil play a
minimum role to foster entrepreneurship in education so far
Source: TRs analysis
tera-feira, 18 de fevereiro de 14
Lessons looking forward (K12)
Entrepreneurs
Looking at our current entrepreneurs and international references, it is already possible to
take some good lessons
Stage of maturity
Entrepreneurs
+ Distribution model is more important than product at the current market stage
+ Management team is not only about business skills and technology, but education and sales/relationship with schools
+ Where is the educational innovation? Dont talk about features...
+ Pull, not push! Dont sell aggressively, create the conditions for schools to buy
+ Teacher will make it or break it: build for them to be empowered
+ Get as much support from experienced professionals as possible (even if they are too traditional, they understand your public)
+ Students shouldnt like your product, they must love it!
Source: TRs analysis
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