NetDragon VP: Offshore Spinoff to Fuel AI Education Growth as Takes SaaS Global This Year

2024-05-29 17:12:00

 Via strategic M&A, NetDragon has aggressively boosted its education footprint, reaching over 190 nations worldwide.

 NetDragon provides holistic hardware-software-content solutions, with its education SaaS products aiming for an early entry into the European and American markets this year in their global market push.

 Post spin-off IPO of foreign education assets last December, NetDragon is upping AI's role in learning through accelerated deployment.

As the 7th Digital China Construction Conference drew to a close, NetDragon (0777.HK), a longtime participant in the conference, focused on new generations of digital technology and showed education solutions utilizing hardware, software and comprehensive platforms. 

The annual event, the first organized under China's optimized national digital system, provided insight into NetDragon's ambitions in the edtech sphere internationally. CLS spoke exclusively with Simon Leung, NetDragon's Vice President and CEO of its subsidiary Elernity about global plans for AI-enhanced education services.

Simon Leung interviewed by CLS reporters.

Having taken their overseas education business public last year through spin-off, NetDragon is now fully accelerating their "AI+Education" strategy. Leung believes AI will fundamentally change education by addressing inequality of resources and modernizing pedagogy, though change may face resistance. "We hope to innovate the entire system," he said. 

NetDragon revealed their globally targeted SaaS edtech products are aiming for initial entry into the huge European and American markets this year. As Leung told CLS, "Our digital displays already reach over 1 million classrooms. Combining AI with that huge existing user and platform base, we can expand usage from schools to homes, subways and beyond - unlocking tremendous incremental growth".

Untapped Markets Along Belt and Road

Leung has previously held high-level leadership roles as President of Motorola's Asia-Pacific division and CEO of Microsoft Greater China. Prior to joining NetDragon, he also served in management capacities at various organizations involved in the education sector. In 2015, Leung brought his versatile expertise to NetDragon as the company looked to Leung to spearhead the planning, integration and operations of its domestic education portfolios and the development of overseas online education business.

Founded in 1999 developing hit games like Eudemons Online, Conquer Online, and Heros Evolved, NetDragon has expanded into edtech through strategic acquisitions like UK interactive panel maker Promethean in 2015, American digital curriculum provider JumpStart in 2016, and online learning platform Edmodo in 2018. Education has contributed over 50% of its revenues by 2022.

NetDragon now serves over 2 million classrooms across 190 countries and regions with over 150 million users. Significantly, strategic partnerships have been established in over 20 "Belt and Road Initiative" countries like Russia, Egypt, Nigeria, Kenya, Kazakhstan, India, Malaysia and Singapore.

Leung sees these developing markets as prime opportunities. "In nations with limited education resources like Nigeria, large populations lack access," he explained. "Their demand for improved systems is high. Relative to other areas, Belt and Road countries show strong will to reform approaches".

Egypt exemplifies this strategy. Starting cooperation in 2017, Egypt purchased 27,500 Promethean interactive panels in 2018. In 2019, NetDragon customized an Intelligent Space Solution around mobile classrooms, signing a deal to deploy 265,000 such rooms. Over 94,000 additional tablets will be delivered in coming years.

"We've been partnered with Egypt for many years, nearly reforming their entire K-12 system," Leung boasted, adding projects in Saudi Arabia and others are advancing.

While the Promethean tablets drive edtech revenues, NetDragon's holistic solutions distinguish it by combining hardware, software and content. For Egypt, Intelligent Spaces integrate refitted shipping containers or mobile buildings with tablets, Edmodo Classroom, and Edmodo Class preloaded.

By 2023, Promethean has commanded 17.4% of the global market outside China, Leung noted, but SaaS will become the future driver as hardware potentially plateaus, having strategized this direction years ago.

AI-Powered Education to Drive Growth

The views previously expressed by Leung have been reflected in the company's strategy. As NetDragon management stated at a 2024 media briefing, the goal was to forge into a global SaaS company serving the education market. has been a key focus of NetDragon as they look to expand their overseas education business. The market for AI in education is heating up, and over the past year NetDragon has poured resources into the space. In December, they spun off their international education assets into a new publicly-listed company called on the US stock exchange. The move aimed to attract more capital to accelerate applying AI technologies to improving learning. has now added AI capabilities to Promethean interactive displays. Through a new SaaS model, this will allow for more personalized learning - a product that will debut first in the US and European markets this year. In the future, plans to offer a suite of SaaS services.

Leung believes the trend of AI-empowered education is unstoppable. He estimated that over 1 million classrooms were already using their product (Promethean panels) globally, potentially reaching over 15 million teachers and thousands of students. "By introducing AI to enhance what's already in so many schools, we have incredible potential to expand into new areas like homes and public transit. The growth is stunning."

"But this is not our ultimate goal," Leung further stated. "Through AI, we want to make learning truly personalized by tailoring instruction for each student's unique interests and talents. Currently, resources are limited - usually there's one teacher for 30-40 students in a class. But what is the ideal personalized learning? Definitely one-on-one. But how can we achieve that? AI is the answer".

NetDragon started researching AI and big data back in 2010 with an AI lab. In 2017, they helped establish a national engineering lab focused on AI applications in education. Partnering with schools like Peking University and Tsinghua, as well as Chinese tech firms like China Mobile (600941.SH) and iFlytek (002230.SZ), NetDragon has developed AI-focused edtech tools. Their first "AI Teaching Assistant" launched in 2018 using voice recognition to help teachers. And in 2020, NetDragon introduced AI-powered STEAM robotics lessons in elementary schools, combining self-developed AI editors, trainers and virtual/physical bots.

Reporters took note of how overseas expansion in edtech is nothing new. But with large language models now dominating headlines, all players are accelerating their international efforts. One report said ByteDance's education services now have over 200 million global users, while Zuoyebang's Question.AI product hit 2 million weekly active users in this April. NetDragon also forecasts its new platform will spur growth through AI-centric SaaS globally.

However, the uncertainties of geopolitics and differences in cultural concepts and approaches to education across countries and regions pose challenges for these education firms. Leung believes in addition to developing core strengths in products and services, finding suitable partnership and strategic acquisitions are effective paths for Chinese companies to go global. Regarding NetDragon's future expansion in overseas education markets, he also admitted that introducing new technologies may face resistance to changing traditional beliefs, systems and methods in education from governments, parents and society. "It will take time," he said, "for these values to be fully realized".