After three years of operation, Edukoya, a once-promising edtech startup in Nigeria, has formally closed, signaling yet another major departure in Africa’s unstable technology industry. The business, which had positioned itself as a digital learning game-changer, declared that it would shut down and return its investors’ money. This action was taken in spite of the fact that in 2021, the firm raised an astounding $3.5 million in pre-seeding funding, which at the time was one of the biggest early-stage rounds for an African edtech company.
Edukoya, which was founded by Honey Ogundeyi, sought to transform education in Nigeria by providing students preparing for tests with free and reasonably priced digital instruction. The platform used technology to close the gaps in Nigeria’s educational system by offering real-time interactions between students and teachers, prior questions and individualized tutoring. Due to its promise to address the industry’s long-standing inefficiencies, like the lack of qualified teachers and restricted access to educational resources, the firm has attracted a lot of interest.
Honey Ogundeyi, the founder and CEO, was motivated to address the educational obstacles she encountered as a child in Nigeria. She saw the sharp differences between Nigeria’s educational system and the Western one while studying in the United Kingdom.
But, even with the initial enthusiasm and substantial financial support, Edukoya found it difficult to keep up in the increasingly difficult edtech market. Market saturation, expensive client acquisition costs, and the overall economic crisis impacting Nigeria’s tech environment were some of the challenges the firm encountered. Many investors have also become more cautious and are concentrating on profitability rather than just growth potential as a result of the global funding downturn that has severely impacted African businesses. The choice by Edukoya to shut down operations instead of looking for more funds was probably influenced by this change in investment priorities.
Even though Edukoya had a user base and had incorporated artificial intelligence (AI), into its product, it finally concluded that closing and giving back funds was the wisest course of action. The company explained that it preferred to wind down operations “rather than deplete resources chasing scale in a challenging market.”
Before making its decision, the startup, which had been in operation for three years, looked into business model changes, mergers and acquisitions (M&A) and collaborations. Its decision to close rather than deplete its funds implies that the business still had enough money to stay in business. However, the startup may have been having trouble for a while, as seen by tales of layoffs and a possible shift to finance. When questioned about this, Edukoya denied switching to fintech, explaining that the Koya App, a platform that gives kids a debit card and teaches them about saving, was a stand-alone project rather than a pivot.
One of the main causes of Edukoya’s problems is its inability to monetize its services. Although the platform’s free learning model drew users, it was difficult to turn these people into paying customers. Many families in Nigeria place a high value on price, and there is still a low desire to pay for digital learning platforms, despite the country’s urgent need for access to high-quality education. Despite its value proposition, Edukoya found it challenging to produce steady revenue as a result.
However, a degree of accountability and strategic insight is demonstrated by the company’s choice to return investments rather than carry on losing money in an unpredictable market. Edukoya chose to maintain investor trust rather than depleting its remaining resources in an attempt to stay afloat, a decision that may have a favourable effect on the startup’s founder and team’s future endeavours.
