Is Nigeria’s Edtech Sector Truly Sustainable? The Case of Edukoya’s Shutdown

Limited access to the internet and gadgets such as smartphones and laptops or computers are factors that could kill an innovator’s drive to solve problems in certain sectors.

It’s like a chain reaction: an economic downturn leads to high cost of operations. Even though companies try to manage and scale through, the recent doubling of data costs by telcos in Nigeria, following NCC’s approval, has almost completely killed the dream of digital learning for individuals, including the customer base of edtechs like Edukoya.

Edukoya was seen as one of the companies giving hope to Nigeria’s edtech sector, aiming to bolster learning through an AI-powered digital platform. 

However, its sudden shutdown has left us questioning the sustainability of the environment Nigeria presents to edtech startups. Despite investments and a growing demand for digital learning, many startups find it hard to stay afloat.

Edukoya’s shutdown is not an isolated case—other edtech startups in Nigeria, such as Quizac, now acquired by Tekedia Capital, have also failed to scale successfully. 

While Nigeria’s edtech sector is projected to reach $400 million in 2025, we find ourselves at a crossroads, unsure of the industry’s thriving ability in an economy where disposable income is low and infrastructure gaps haven’t changed much.

Some organisations go as far as providing laptops for their students, but how many focus on data provision among other necessities? Is Nigeria’s edtech sector truly prospering, or are these shutdowns indicative of deeper structural issues? 

Let’s examine the industry’s prospects, challenges, and what Edukoya’s closure means for the horizon of edtech in Nigeria.

The Assurance of Nigeria’s Edtech Sector

A Market Ripe for Disruption

Nigeria’s education system is affected by overcrowded classrooms, underfunded public schools, and a lack of quality teaching resources. Edtech was supposed to bridge this gap.

• Massive student population: With over 40 million primary and secondary school students, Nigeria has one of the largest youth populations globally.
• Growing internet penetration: Over 50% of Nigerians now have internet access, and mobile subscriptions have grown above 157 million.
• Increased smartphone adoption: As smartphone prices drop, more students can access online learning platforms.

With poorly funded public schools, an alarming student-to-teacher ratio of 46:1, and outdated teaching methods, digital learning was meant to leverage the improvements and bridge these gaps.

Investment in Edtech

Between 2019 and 2023, Nigeria’s edtech sector witnessed a surge in funding:

• uLesson raised $15 million in 2021.
• AltSchool Africa secured $3 million in 2023.
• Edukoya itself raised $3.5 million in a pre-seed round, one of the largest for an African edtech startup.

The expectation was that these investments would drive growth, but Edukoya’s shutdown points to deeper issues.

Challenges Facing Nigerian Edtech Startups

Funding Winter & Economic Obstacles

While Nigeria’s edtech sector once attracted investors, the global funding slowdown has hit startups hard. In 2023, African startup funding dropped by 47% compared to 2022, forcing many companies to rethink their strategies.

• High inflation has increased costs of operations.
• The naira’s depreciation has made it harder for startups to manage foreign-denominated expenses.

Startups that rely on continuous funding rounds to survive are at risk, as venture capitalists become more cautious.

Market Readiness

Edukoya admitted that the Nigerian market was not yet ready for its synchronous learning model. The company struggled with:

• Low disposable income: Most Nigerian parents cannot afford premium digital learning services.
• Macroeconomic instability: High inflation and naira depreciation made scaling difficult.
• Connectivity and device access: Many students lack stable internet and affordable smartphones/tablets.

Without an addressable market that could afford edtech services at scale, Edukoya had no path to profitability.

Low Monetisation & Profitability Issues

The biggest challenge for Nigerian edtech startups is monetisation.

• Who is paying for these services? The majority of Nigerian students attend public schools, where parents struggle to afford even basic education expenses.
• Subscription fatigue: Many edtech platforms offer freemium models, but converting free users to paying subscribers is difficult.
• Alternative learning methods: Traditional home tutoring and free YouTube educational content compete with paid platforms.

Without a sustainable revenue model, even well-funded startups risk collapse.

Infrastructure & Accessibility Gaps

Nigeria’s high data costs and frequent power outages make digital learning difficult.

• Internet access: While penetration is increasing, many students still lack reliable connectivity.
• Device availability: Smartphones and tablets are expensive for lower-income families.

Unlike in developed markets, edtech solutions in Nigeria must address these accessibility issues to succeed.

Regulatory and Policy Limitations

The Nigerian government has shown interest in edtech, but policies are still weak.

• Public-private partnerships are limited.
• Government curriculum restrictions make it hard for edtech startups to innovate freely.

Without better regulatory support, scaling edtech solutions will stay challenging.

At the 2024 Mastercard Foundation Edtech Conference, Nigeria’s Minister of Communications, Dr Bosun Tijani, emphasised that inclusion is essential to edtech success:

“If we fail to reach all learners, we fail to fulfil our potential to revolutionise education.”

Edukoya’s battle to scale says a lot about inclusion still being far from reality.

Edukoya’s Case Study: What Went Wrong?

Business Model & Growth Challenges

Edukoya set out to enhance online K-12 learning in Africa, providing Digital educational content, Online tutoring for students and parents and An AI-powered platform for personalised learning. The edtech company provided free learning resources and paid premium services. 

Despite its vision, the startup faced: 

• High burn rate: Rapid expansion and costs of operations outpaced revenue growth.
• User retention struggles: Converting free users to paying customers proved difficult.
• Market competition: uLesson and other platforms had already established themselves in the space.

Funding & Economic Pressures

Though the edtech company raised $3.5 million, Edukoya couldn’t sustain operations in Nigeria’s harsh economic climate. Rather than pivoting or depleting funds, Edukoya chose to wind down operations and return capital to investors.

The startup had considered:

• Partnerships and mergers but failed to find viable options.
• A potential pivot to fintech, though it later denied this was its plan.
• Layoffs and cost-cutting, with reports stating its office had been closed for six months before shutting down.

The company reached 80,000 students, answered 15 million questions, and hosted thousands of daily live classes, however, it concluded that scaling was impossible in Nigeria’s current market conditions.

Lessons from Other Failed Edtech Startups

• Relying solely on VC funding is risky.
• Sustainable revenue models are indispensable.
• Adaptation to local economic realities is necessary.

Is There Still Hope for Edtech in Nigeria?

Long-term success will depend on:

• Affordable pricing models: More flexible payment options to suit the Nigerian market.
• Government support: Stronger policies to integrate edtech into public schools.
• Infrastructure improvements: Better internet connectivity and access to learning devices.

What Can Startups Do Differently?

• Rethink monetisation models: Tiered pricing or government partnerships can help affordability.
• Improve accessibility: More offline learning solutions for students with limited connectivity.
• Adopt flexible pricing models: Tiered pricing or partnerships with schools can help improve affordability.
• Leverage AI & adaptive learning: AI-driven personalised learning could make services more cost-effective.
• Strengthen government partnerships: Working with public schools can drive scale and adoption.

Predictions: More Shutdowns or a Market Rebound?

If the funding winter continues and macroeconomic issues get worse, more edtech shutdowns are inevitable. 

• Market readiness is still low.
• Disposable income constraints limit adoption.
• Infrastructure gaps make digital learning inaccessible to many.

However, startups that adapt to both local and global economic realities and build sustainable models may still thrive.

Unless business models evolve to fit Nigeria’s unique economic and educational space, the so-called “edtech boom” may remain nothing more than a myth.

For Nigerian edtech to succeed, startups must focus on real, scalable impact.