China’s New Education Restrictions Have Big Implications for Companies
Lumos’s Victor Hu spoke to Brian Bradley from EdWeek on China’s latest education restrictions on for-profit tutoring companies and their impact on businesses. The article interviews experts on the implications of China’s “double reduction” policy, which was released this summer and is aimed at reducing homework and afterschool studying for the nation’s 200 million K-12 students.
Excerpt from the article:
Increased Opportunities to Sell to Chinese Schools
Chinese public schools will adopt more ed tech over time in line with China’s 15-year education modernization plan, but new sales opportunities for education companies might take years to materialize, said Victor Hu, managing partner and co-founder of U.S.-based ed-tech-focused venture capital firm Lumos Capital Group.
“It’s very clear that they are going to be investing in the system overall,” he said.
Many education companies have been positioning themselves to play a central role in China’s smart cities initiative, which involves outfitting some of the country’s largest cities with advanced software, and expanding the role of AI to automate key functions of people’s everyday life.
Ping An Insurance, a Chinese holding company whose firms span several industries, has bought several ed-tech businesses to try to position itself to be a leader in creating smart schools.
The concept of smart schools involves companies providing the entire technology backbone – hardware and software – to help schools modernize, Hu said.
There’s clearly a market for innovative companies to be part of education modernization in China, but Lumos would be cautious about investing in ed-tech companies located in the country, he said.
“At the same time, there’s lots of opportunity, particularly in times of dislocation,” Hu said. “We would make sure that there are good investment angles for us before we really progressed with it.”