Covid-19 unlocks new interest in healthtech and edtech sectors: report

Singapore

NEW frontiers in the digital economy such as healthtech and edtech have hit their inflexion points, as the Covid-19 pandemic has unlocked new interest from investors and lowered old barriers, according to a new report.

Four times more people have used digital health apps compared to before the pandemic, while top education apps were used three times more, according to the South-east Asia e-Conomy report by Google, Temasek and Bain & Co, which was released on Tuesday. Both have largely retained users even as restrictions eased for most countries in South-east Asia.

Both edtech and healthtech sectors saw a surge in funding this year. Investments in the healthtech sector have been steadily rising over the years, with deal value in 2019 more than double that of the year prior. The first half of this year saw funding rise further, up 15.8 per cent to US$220 million.

Edtech, too, saw a steep uptick in 2019 to stand at US$270 million - more than three times that of 2018 - despite prior years of modest funding. A large proportion of funds were put into online learning platforms such as Indonesia-based Ruangguru, which raised US$150 million in December 2019 - making it one of the largest rounds for a South-east Asian edtech company.

The report added that new startups will emerge and funding will continue to grow post-Covid-19, as investors seek startups that have benefited from the online learning trend induced by the pandemic.

Covid-19 has sparked an urgent need for face-to-face alternatives, as schools in the region start to embrace online learning. Once deemed as a complimentary medium, online learning became the only option available to students, teachers and schools during the pandemic.

The report also mentions that educators have yet to tap the full potential of edtech, since only simpler methodologies such as video conferencing were adapted for online use in schools. Relatively innovative methodologies such as multimedia and gamification have yet to make the transition, it noted.

Meanwhile, the healthtech space has seen accelerated interest amid the Covid-19 crisis. The pandemic has lowered commercial barriers in the space, and now, widespread collaboration between existing providers and telemedicine startups marks a beginning for deeper integration, said the report.