Dev Clever positioned for growth across India’s booming EdTech market

In recent months, the London-listed education-focused technology firm DevClever (DEV FOLLOW) has positioned itself at the heart of the rapidly growing EdTech market in India and perfectly positioned to lead the emerging EdTech sector across the continent

Indian EdTech industry's market size to reach $30 billion in 10 years: Report

According to a recent research report from RBSA Advisors, the Indian EdTech market is poised to transform from a $700-800 million market to a $30 billion in size in the next 10 years. Furthermore, the report highlights the EdTech industry has already received $1.4 billion in investment by October 2020.

According to the Indian-English-language publication, The Economic Times, the EdTEch sector has received private equity investments of c.$4bn in the last five years, which has undoubtedly been accelerated during the pandemic.

Read more at: https://economictimes.indiatimes.com/tech/technology/indian-edtech-industrys-market-size-to-reach-30-billion-in-10-years-report/articleshow/82295097.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

 

Dev makes its first steps into the Indian market

DEV achieved its first foothold in the Indian market in December 2020 when it secured a five-year exclusive partnership agreement with Veative Labs and the National Independent Schools Alliance ("NISA"), India's largest governing body for budget private educational institutions.

Dev Clever Signs 5 Year Strategic Agreement for B2C Roll-out Across India

Dev Clever (DEV) has entered into a five-year exclusive partnership agreement with Veative Labs (“Veative”) and the National Independent Schools Alliance (“NISA”), India’s largest governing body for budget private educational institutions.

At the time, the group explained that this agreement would include the “localisation of the company’s launchyourcareer.com platform across India and its promotion as a complete career guidance and career-led learning platform recommended to NISA affiliated schools”.

The agreement was described by CEO, Chris Jeffries as a “transformational” deal for DEV. Amongst other things, the dedicated resources and infrastructure in India will ‘maximise the opportunity with NISA affiliated schools and the wider BPS (budget private schools) sector.’

In June 2021, NISA commenced the rollout of DEV's Launchmycareer platform to over 70,000 budget private schools in India as the body’s preferred choice of career guidance.

NISA, which represents 13 million students, has been described as “the benchmark authority and voice of the expeditiously expanding budget private education sector in India.”

DEV said it expects its five-year partnership to enable it to secure a sizable part of this rapidly growing sector “at scale, with a strong proposition and a direct route to market.”

And the group has already started to deliver on its objectives, having secured market positions with a recent string of contracts in all sectors; private, public and government. 

First material contract win and government-funded pilot

The Group secured its first material win in India at the beginning of June 2021 with a contract valued at US$1.5m to implement its immersive careers guidance and STEM-based virtual reality educational library at schools under central and state governments in the country.

Dev Clever secures fist material local contract in India

Dev Clever has secured its first material local contract win in India valued at US$1.5 million to implement the Company's immersive careers guidance and STEM-based virtual reality educational library at schools under central and state governments in the country.

In addition to this first martial contract, the Company also secured a Government funded pilot to deploy its platform and virtual reality learning services into one of India's 1,248 central government Kendriya Vidyalayas (“KV”). These schools are specifically known for innovation and can be rolled out to the rest of the central government school sector subsequently, the group said. 

The ‘comprehensive’ pilot will assess the impact within the central government school system and if successful, roll-out further later this year. The pilot marks DEV’s first entry into the Indian public-school sector, which in total consists of around 1.1 million schools and over 250 million students.

"Despite the devastating and tragic pandemic impact that has hit India hard, I am pleased to announce our first material local contract win following the formation of our partnership agreement with NISA and Veative,” said Chris Jeffries, CEO of Dev Clever, at the time.

$50m revenue partnership offers global rollout plan

Recently, Dev unveiled a ‘breakthrough’ tactical partnership, which is expected to deliver a minimum of $50m in revenues over the next four years.

Dev Clever jumps after securing $50m deal with Aldebaron DMCC

Shares in Dev Clever jumped after it unveiled a ‘breakthrough’ tactical partnership which is expected to deliver a minimum of $50m in revenues over the next four years.

The partnership with Aldebaron DMCC, a Dubai-based organisation, follows a previous material licensing deal for its core EdTech services secured back in February 2021. This latest deal with Aldebaron was described as “a seamless extension” of that original arrangement.   

The partnership will enable Dev to accelerate a global rollout plan across Asian territories, starting in India in partnership with NISA and then extending across Indonesia, Thailand, Singapore, Malaysia, Philippines and into the Middle East and Africa in the next three years. 

In total, the contract is set to earn Dev Clever $5 million in 2021, $10 million in 2022, $25 million in 2023, and $20 million in 2024 (each for the financial years ending 31 October).

Indian Government gives green light

Just last Monday, DEV announced that it had entered into an agreement for an initial project with the Common Service Centre Academy in India which runs the CSC scheme, a national government initiative led by the Indian ministry of Electronics and Information Technology.

The CSC scheme is a central part of Digital India, the government's flagship programme which has a vision to transform India into a digitally empowered society and economy.

The pilot project will see DEV’s career guidance and learning platform go live in 25 academy centres in early July 2021 and engage 100 students per centre. The 45-day pilot will assess the foundation programme of STEM-based immersive learning and careers guidance.

Following this assessment, the CSC Academy and Dev Clever will have the option to extend the initial project and rollout to all 5,930 CSC Academies, thereby commencing Phase 2.

During Phase 2, DEV will seek to implement a foundation career and remote learning service offering. This will present the Group with the opportunity to enter into discussions with the scheme's operators for the deployment of additional, complementary learning modules.

Should Phase 2 be successful, it will provide the Company with the opportunity to agree to expanding the service offer to the broader CSCs and their users, Dev Clever explained.

As part of a wider implementation plan, Dev said it will also look to enhance the student experience including the introduction of the Indian National Career Challenge which will involve engaging with local employers and organisations to provide a programme of virtual work experiences and employer encounters to students within all the CSC centres.

The Indian National Career Challenge is currently anticipated for launch in Q2 2022.

View from VOX

DevClever has positioned itself perfectly to benefit from the emergence of the global EdTech trend, which by all sources, is still in its infancy.

DEV’s shares have increased more than 5 fold in the past 12 months and  has been a tremendously positive equity over the past 18 months with the shares soaring from less than 10p to intraday highs of more than 50p more recently.

DEV price chart

Given its leading position within the EdTech industry, investors should expect more partnership and contract wins over the next 12 months as growing adoption of EdTech services and products are expected to address a user base of 37Mn-plus paid users by 2025, which should propel the company to significant profitability which in turn should continue to drive the share price materially higher .

Zak explains the recent bear trap at 23p here and points to the positive future for the shares from the tea leaves and technical analysis point of view.

Furthermore, the fast money is also circling the industry, which has also brought it more momentum, with $1.4Bn invested in some of the companies in the sector in the last 9 months.

Rhys Spence, head of research at Brighteye Ventures, a European edtech-focused fund, recently wrote that Edtech deal flow in 2021 looks set to match or even outpace 2020 levels, per the report: At $9.4 million, average deal size is triple 2020 levels; seven companies have raised $50 million in five different markets; and the U.K. has more than three times as many deals as the next individual market. 

Whilst VOX never recommends investing in shares solely on the back of a potential moonshot takeout premiums, EdTech in general and Dev Clever in particular look particularly attractive through a private equity lens also.