When Nigerian edtech startup Edukoya began operations in Might 2021, its founder Honey Ogundeyi aimed to revolutionise on-line studying for Ok-12 college students in Africa. That very same yr, the corporate secured a $3.5 million funding to develop its enterprise and improve its know-how.  

However funding was not sufficient to maintain the enterprise.  In February, 2025, the startup shut down core operations citing low disposable earnings and different macroeconomic situations.

One other edtech startup, Zummit Africa, which specialises in AI, information science, and machine studying companies, is at present dealing with operational challenges and struggling to remain afloat. 

Jonathan Enudeme, the corporate’s CEO and founder, instructed TechCabal that when he launched his enterprise in 2021, he provided free AI companies, garnering an 80-90% consumption fee. Nevertheless, when Zummit Africa shifted to a subscription mannequin in 2022, the speed plummeted to 30%. 

“Elevating capital is difficult, and the goal market struggles to afford primary requirements, not to mention further academic bills,” Enudeme mentioned.

Felix Onah, a former banker residing in Lagos, misplaced his job final yr. He desired to transition into the information science discipline however was unable to maintain up along with his coursework as a consequence of monetary constraints and his single supply of earnings. “I couldn’t sustain as a result of I’ve tasks.”

The state of affairs displays the realities edtech startups face in Africa’s most populous nation. Hovering inflation, fueled by the elimination of the petrol subsidy and naira devaluation, has compelled many households to prioritise primary requirements like meals and shelter over further academic sources. 

This has made the subscription mannequin, a generally used income producing software within the edtech area, troublesome to implement. Moreover, a latest 50% telco tariff hike has led to larger information prices for customers, making the mannequin even much less efficient. Specialists say there’s a have to undertake extra versatile, scalable, and sustainable income fashions that align with the precise realities of Nigerians.

Edukoya focussed on Ok-12 studying and examination preparation, providing each free and premium subscription packages. The startup’s income mannequin was based mostly on subscriptions, however they struggled to transform free customers to paying subscribers as a consequence of low disposable earnings. This was as a result of the first customers had been Ok-12 college students, whose dad and mom or guardians had been answerable for cost.

“Startups have to be inventive, to discover each avenue,” mentioned Victor Tubotamuno, CEO of Earlybrite, an internet academic platform. “ It’s about discovering what works, being versatile and serving our communities in the easiest way potential.” 

Tubotamuno mentioned by being versatile, edtech startups ought to supply ‘study now and pay later’ choices by offering college students with entry to academic content material and sources upfront, whereas permitting them to defer cost till a later date. 

“Individuals are struggling, and we have to be compassionate,” he mentioned.

In keeping with Oluwatobi Akapo, gross sales director at Edswot, a web-based studying platform, Nigeria’s powerful financial local weather makes it important to shortly diversify, as counting on a single mannequin is inadequate.

Akapo mentioned his firm maintains profitability via a mixture of subscription fashions and B2B partnerships.

What fashions may work for edtech startups?

Aside from subscription packages, Gradely incorporates the freemium mannequin, the place customers are inspired to improve from a free to a paid model. Though gaining recognition, it’s not as extensively adopted in Nigeria as subscription-based fashions.

Startups also can increase income by licencing academic content material, software program, or platforms to different companies or organisations. AltSchool licences its studying administration system and curriculum.

Tuteria, one other Nigerian on-line platform which connects college students to certified tutors for each on-line and in-person classes, costs a fee on each lesson booked via its platform. The fee fee can differ relying on components just like the tutor’s expertise and degree on the platform.

Enterprise-to-Authorities (B2G) can attain numerous college students and educators in public schooling. In 2024, the Enugu State authorities partnered with Edves, a digital infrastructure for Ok-12 colleges to assemble 260 sensible and inexperienced colleges throughout the state and revamp the state’s curriculum and assessments utilizing AI. The tip objective of that is to bridge the digital divide within the state.

“It breaks my coronary heart that so few are specializing in B2G edtech options,” Tubotamuno of Earlybrite mentioned. “Consider the impression we may have by coaching public sector officers, by enhancing the standard of schooling at its core. It’s a huge, underserved market, and it’s the place we are able to make an actual distinction.” 

Edtech startups typically wrestle to accomplice with governments as a consequence of restricted funding, gradual forms, infrastructure points, digital literacy, coverage boundaries and outdated laws and information privateness. 

Akapo of Edswot means that along with addressing these challenges, probably the most essential shift lies within the perspective of governments and public establishments as they don’t recognise the potential of edtech startups as a viable resolution.

“They don’t seem to be enlightened on the edtech business and the way they function. Startups have to sensitise them on how edtech works and the advantages they might carry,’ he mentioned.

Enterprise-to-Enterprise (B2B) is one other space the place edtech startups can discover as there are much less collaborations within the business. Nigenius companions with FlexSAF to offer high quality educating sources, whereas Gradely works with colleges to combine its platform and instruments.

In a 2023 LinkedIn put up, Pratishek Das, former regional head at Cambridge, mentioned partnerships and alliances can take many types, from strategic partnerships with different Edtech corporations to collaborations with academic establishments and authorities businesses. 

“The secret’s to seek out companions who share your imaginative and prescient and might carry complementary expertise and experience to the desk,” he famous

The golden age of explosive edtech progress, fueled by plentiful funding, is giving strategy to a harsh actuality. Edtech companies can not afford to deal with exterior funding as a lifeline. To outlive the present financial turbulence and navigate the challenges of suppressed demand, they have to embrace strategic monetary diversification and construct strong, self-sustaining enterprise fashions.