In August last year we blogged about Macmillan’s New Ventures, a kind of venture capital fund and incubator for publishing start-ups which we said was a canny hedge against disruptive technologies. Fast forward to this year, and it seems that the start-up spirit has spread to other parts of Macmillan with the news it had acquired Veduca and Easyaula, two education publishing start-ups in Brazil in a bid to crack the South American market.
Like New Ventures, Macmillan Digital Education is an “active early-stage investor”with a remit to identify and invest in “businesses which complement its ecosystem of services in the online education space”. Interestingly, instead of targeting the student market, which seems mainly to be preoccupied with the development of digital textbooks, both Veduca and Easyaula are focused on delivering lifelong learning content to adults.
According to Macmillan Digital Education’s announcement Veduca (veduca.com.br) is “an online video platform that aggregates and curates publicly available educational content from the world’s top universities and annotates this content with meta tags and Portuguese subtitles”. Its business, which seeks to make the kind of content available in English via services such as iTunes U available to Portugese speaking audiences via a model of crowdsourced translation certainly seems to be an elegant solution to pushing freely available content across the language barrier. Easyaula is also a start-up whose success depends on its ability to create communities. It positions itself as “an online educational marketplace that makes it easy for people to learn anything from anyone”, applying the peer-to-peer selling model that has proved such a success for eBay and latterly AirBnB to the world of adult education.
The fact Macmillan chose to direct this investment into Brazilian companies is also a big vote of confidence in Latin America’s ability to deliver growth. Not only have countries in the region largely avoided the financial turbulence that has swept through Europe and Latin America, but they also represent a relatively untapped digital market, for three reasons:-
1. The Brazilian e-reading market is just getting started – While research by Bowker suggested last year that 18% of Brazilian readers had bought an e-book, the country has lagged behind in terms of availability of the major reading platforms. With Kindle now officially available in Brazil as of December 2012, we can expect to accelerated growth in e-reading even though more recent figures obtained by Publish News Brazil don’t expect e-reading in the country to grow beyond 3% of total market share by the end of 2013.
2. Brazilian readers want an educational rather than leisure experience – Macmillan’s decision to lead with education content is another clever play for a company engaging with BRIC countries. According to the same Bowker research cited above, 75% of Brazilian buyers sought out business, professional or academic e-books over works in leisure genres, suggesting that these categories represent the largest business opportunity.
3. Increased expenditure in education – Education spending in Brazil rose from 10.5% in 2000 to 17.4% of total public expenditure, putting the country third in the OECD’s global league tables. There are also plenty of opportunities for collaboration between the private sector and universities, As Top Universities wrote in its analysis of Brazil’s higher education sector last year:-
“Likewise, collaborations between the private sector and higher education institutions, as well as the strengthening of connections between curriculum design and employers’ requirements, should be perceived as important tools for improving productivity and creating more opportunities for enrolment in good quality tertiary education.”
So there we have it. Two very interesting looking acquisitions for Macmillan in the right market at the right time. It will be fascinating to see how both Veduca and Easyaula’s services develop in the future.