(L-R) NativeX co-founders Trang Ly and Ai Chau
NativeX Edtech, an English learning app in Vietnam, recently announced that it secured US$4 million in total funding from investors, including Ansible Ventures, Blueprint Ventures, Northstar Ventures and angels. The edutech startup plans to use the capital to help the 10 million working professionals in the country learn English before moving to other Southeast Asian markets.
In this interview, co-founders Trang Ly (Head of Growth & Engagement) and Ai Chau (Head of Academic), discuss the motivation to start NativeX, the initial challenges the company faced, and the competition in the market.
Excerpts:
What motivated you to start NativeX?
Trang Ly: NativeX was founded by five seasoned tech professionals. Our motivation stemmed from a collective concern about the readiness of our local workforce to adapt to global advancements.
In Vietnam, despite its remarkable economic growth over the past decade, only less than 5 per cent of the population is proficient in English. Our journey began with creating a premier English learning platform tailored to Vietnam’s busy working professionals.
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Our ambitions extend far beyond English proficiency, though. We aspire to become the “Airbnb of education.” This entails collaborating with global and regional edutech leaders to curate and deliver their content to our local audience seamlessly. We aim to simplify the discovery process and empower individuals to focus solely on learning, thus ensuring they remain competitive in a rapidly evolving global landscape.
How and where did the founders meet, and when did they decide to take the entrepreneurial plunge?
Trang Ly: The founders previously had the opportunity to meet and work together at a big edutech company in Vietnam. During our time there, we developed a shared vision and passion for education, specifically focusing on addressing the needs of working adults in Vietnam. As we continued to engage in discussions and nurture their shared aspirations, we began to recognise the potential impact we could make by starting our own venture.
How hard were the initial days of setting up the company? What were your significant hurdles, and how did you tackle them?
Trang Ly: We encountered several challenges
Financial constraints: Limited funds posed challenges covering initial expenses such as office space, technology infrastructure, and hiring talent. We invested our personal savings to fund the early stages. We also explored options like seeking funding from angel investors or edutech VCs.
Establishing a customer base: Since NativeX was a brand-new player in the market, building a customer base could have been a major hurdle. To tackle this challenge, we adopted low-cost marketing strategies, such as utilising digital marketing tools (social media, content marketing, and targeted online advertising) to reach the target audience cost-effectively. We also relied on personal relationships and networks to facilitate word-of-mouth marketing, referrals, and partnerships, which can be powerful tools for gaining initial traction in the market.
How challenging was it to find your first employees? How did you convince them to join you?
Trang Ly: Finding our first employees posed a significant challenge, but we were fortunate to have a vast network to leverage to identify potential candidates. However, convincing individuals to join our fledgling company was more challenging. However, we highlighted the advantages of joining our team and emphasised the mutually beneficial nature of the opportunity.
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Moreover, we emphasised the purposeful nature of our business. NativeX brings tangible value to working professionals in Vietnam, and we deeply recognise the impact and significance of the platform we are building. By emphasising the value and sense of belonging that our employees would experience by being part of NativeX, we were able to attract and convince talented individuals to join our team.
You operate in a market dominated by the likes of ELSA and Duolingo. How do you differentiate yourself?
Ai Chau: Although ELSA, Duolingo, and others are prominent players in the language learning app market, NativeX distinguishes itself by offering a tailored approach specifically designed for working professionals seeking professional English proficiency.
NativeX stands out in several key areas:
Flexible scheduling and online learning with teachers: Unlike platforms like ELSA, where learners primarily study independently, NativeX offers flexible scheduling and live online classes with foreign teachers. This has proven effective, with over 70 per cent of monthly active users remaining on the platform after seven months, dedicating approximately 10-15 hours a month to learning English.
Personalised learning path: Each learner receives a customised learning path based on their proficiency level, enabling them to progress at their own pace without waiting for others. This personalised approach enhances engagement and maximises learning outcomes.
Content-led model: NativeX ensures consistent quality across classes by providing instructors with pre-designed lesson content. Additionally, we’ve successfully shifted 40 per cent of classroom learning to outside the classroom, allowing users to practice independently, including utilising speech recognition technology for pronunciation practice. Furthermore, we integrate relevant workplace scenarios into our curriculum, enhancing the practical aspect of English proficiency.
Knowledge breakdown and ’20-touch’ method: NativeX adopts a pedagogical approach that breaks down knowledge into manageable lessons and encourages repeated interactions to facilitate long-term retention. Compared to traditional learning/teaching methods, our approach could reduce teacher-led hours by more than 50 per cent and prompt users to spend more time on self-learning, resulting in an expected 30 per cent increase in learning efficiency.
Can you discuss your first meeting with investors such as Ansible? How did you convince them to invest in you?
Trang Ly: Our initial meetings with investors like Ansible presented challenges, particularly due to the lack of success stories in our niche market of online English learning tailored specifically to working adults. However, as the discussions progressed, we effectively conveyed the compelling investment opportunity our business presents.
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Some key factors that resonated with investors like Valerie Van, Founding Partner at Ansible included:
Strong team dynamics: We entered the investment discussions with a highly competent and cohesive team, eliminating the need for significant new hires in the foreseeable future. This minimised the inherent risks associated with team dynamics and instilled confidence in our ability to execute our business plan effectively.
Untapped market potential: We highlighted the substantial growth opportunity presented by the underserved market of working adults seeking flexible and specialised English language learning solutions. Just for Vietnam, we are targeting 10 million busy white-collar professionals who recognise the need for English proficiency, with Vietnam boasting the highest propensity to spend on education in the SEA region.
Relevant personal experience: Sharing anecdotes such as Valerie’s personal struggle with learning Chinese despite trying various traditional and digital learning methods resonated strongly with investors. This helped us illustrate the relatability of our platform’s design principles to the challenges typical learners face, particularly in the Vietnamese market.
What are the current challenges faced by NatieX?
Ai Chau: There are mainly two challenges.
Deploying a freemium strategy: Implementing a freemium strategy to reduce reliance on paid digital marketing involves several major developments, including gamifying the app further and making it easier to acquire free users. This strategy aims to allow users to explore the program without live classes initially and then upsell them to full live tutoring packages. To accomplish this, NativeX must develop app features comparable to popular language learning apps like ELSA and Duolingo to attract a large user base that can be monetised later on.
Building high-level content: Developing upper-level English learning content, specifically for intermediate and advanced levels, is crucial for package renewal. Currently, NativeX’s foundation programme is designed for only 18 months for beginners. Users have already purchased 10-12 months’ worth of the programme in their initial purchase order, given their different starting levels of English proficiency. Expanding the content to cater to intermediate and advanced learners will be essential to retaining users and encouraging them to renew their subscriptions.
Do you see opportunities beyond Vietnam? Do you plan to take the product to other markets?
Trang Ly: At present, our primary focus is on Vietnam. However, we see opportunities beyond Vietnam. Our plans include expanding to other markets in SEA as our next step. By strategically expanding our presence in the SEA region, we aim to tap into the growing demand for online learning and capitalise on the potential for our products and services in those markets.
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