In the U.S., tech solutions targeting students have become a niche, with many attracting major funding rounds. In Africa, the sector is less developed.
Africa’s ed-tech sector, in general, is developing at a slow pace. It’s one of the less-funded sectors on the continent, according to research from Disrupt Africa. Its spread has been slower than many had hoped due to challenges with connectivity, access to local content, and lack of training for teachers.
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Those who succeeded generally targeted more affluent consumers, such as South Africa’s GetSmarter, or sell directly to schools and universities. Yet a huge market has been largely neglected – Africa’s student population. Slowly but surely, some companies are trying to serve them and access a potential customer base of millions.
In South Africa, there are 2.3 million students enrolled at higher education and training institutions, and that number is growing each year. Finding accommodation is a major problem for students, with university housing experiencing a state of crisis for some years. Riding to the rescue is DigsConnect, founded by three former University of Cape Town students.
The startup built a student accommodation marketplace where landlords can list rooms and properties for students to search and book. Students can also find other students to live with. The platform has more than 50,000 listed rooms. DigsConnect is raising a funding round and planning on monetizing by taking a commission on rental payments made through the platform.
Co-founder Alexandria Procter says students’ lack of income and limited spending power make them a tricky market to target. By focusing on essentials such as housing, she believes there is money to be made. DigsConnect estimates there is around $5.4 billion being spent on off-campus student housing annually, and wants to corner part of that market.
“It’s a great market to test a product because students are extremely willing and curious to try new things and adopt whatever will make their lives more convenient,” Procter said. “So if you’ve made a cool product that takes the hack out of a chore for a student, you’re almost guaranteed to get product adoption.”
Bola Lawal is CEO of Nigerian startup ScholarX, an app that finds scholarships. It recently launched education crowdfunding platform Village. ScholarX is one of the few ed-tech startups to have secured funding — from Cape Town-based e-learning incubator Injini — and has built a large user base.
“The potential in market size is immeasurable,” Lawal said. “In Nigeria alone, a recorded 10 million youths are between the ages of 12 and 20. In Africa, there are 200 million. This is the student market. In an evolving digital age, this market has to be addressed.”
ScholarX is connecting students with much-needed financing, but Lawal said companies that secure student loyalty at this point can benefit down the line when it comes to their spending power. “The students of today are the rulers of the world tomorrow,” he said.
Dominic Schorr is CEO of South African startup Zelda. A scholarship management platform, Zelda helps organizations find and filter talented youth to support through their university careers. It also raised funding from Injini. Students access the platform for free, but Schorr is looking at opportunities down the line.
“Students leaving university are more likely to become big spenders than people not (at university), simply because they’re more likely to be in higher income brackets. Building brand loyalty amongst students means you’re more likely to have them as clients in future,” Schorr said.
“That applies to banks, insurance companies, gyms, car companies – anything that students can’t afford yet, because one day they will be able to afford it. That’s why student discounts exist.”
Tom Jackson is co-founder of Disrupt Africa, a news and research company focused on the African tech startup ecosystem.
