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The next-generation university filling skill gaps talks numbers

The next-generation university filling skill gaps talks numbers

ArabFinance: We meet with Fadl Al Tarzi, founder and CEO of US-based Nexford University, the tech-powered university that’s gaining massive momentum in the MENA region, with Egypt being their second-fastest-growing market. Al Tarzi walks us through what it’s like to be a completely digital university, how Nexford’s offering stands out from traditional academia, and how edtech could be the solution for the labor market skill gap. 

 

What’s the story behind Nexford? How and when did you launch the service? What gap did you see that you sought to fill with your solution?

When we founded Nexford in 2019, the objective was to enable social and economic mobility across the world. Specifically, we wanted to enable people in all corners of the globe to gain access to high-quality yet affordable education and accordingly to be able to pursue their career aspirations, regardless of physical location, gender, race, or social class. 

We wanted to build a business that combines financial gains and impact. I started my entrepreneurship journey around 20 years ago. I’ve been building companies pretty much throughout my whole career but had never built anything with this kind of impact. This is just something I found myself a lot more interested in over the past few years. And I have always seen that lack of education is probably the root cause of most wealth challenges. So I decided education was the right place to start.

When it comes to education, there’s a real gap in terms of affordability and relevance. Affordability is the number one reason people don’t go to university. It’s also the number one reason people drop out of university. The average American university is affordable to less than 2% of the world population, and what traditional universities are teaching is becoming increasingly irrelevant to what employers are seeking. 

I didn’t plan to build the university; I wanted to build technology that would understand employers’ needs and then sell the analysis to universities, so they could build curricula that are well aligned to the skills employers want. This was the original idea, and then it developed into Nexford university.

I found that there were many challenges, even beyond the curriculum. And universities themselves are almost disincentivized to change their models at this point. It’s difficult for them to adapt, like FinTech to traditional banking. It’s not just about going online. There’s a lot more to it. So, I realized that if we want to deliver the value that we intend to consumers worldwide, we’d have to build it ourselves. And that’s what we did.

 

So how does the platform work exactly? 

Courses on the Nexford platform start on the first of every month; you can enroll in a course, certificate, undergraduate, or graduate degree program – all of which deliver skills that employers are looking for today. Courses are designed to run for an eight-week period, and learning happens 100% online but is supported by a team of faculty and advisors available on a 24/7 basis.

Both employers and learners have a lot to gain from upskilling opportunities – as demonstrated by Nexford’s latest employer survey in Egypt. We discovered that 78% of companies, including PWC, Pfizer and the National Bank of Egypt, have difficulties finding talent with the right set of skills in areas like digital transformation, digital marketing, and business analytics.

Everything we do is skill-focused. There are no standardized exams; it’s all about original projects that learners have to create. That’s how we assess whether they have mastered the skills and, therefore, they can advance as fast as they want. So, for instance, if you’re getting a bachelor’s degree, you can finish it in two years instead of four.

So, what we really do is redefine the measure of progress from time to skills mastery. When you think about the concept of seat hours, you’ll find out it was developed hundreds of years ago. You only have to sit there; what you would be doing there is not the main focus. This doesn’t really measure progress. Besides, different people learn at different paces. Instead, at Nexford, we focus on your skills. The moment you show us you’ve mastered a skill, you can move on to the next. And the faster you complete the program, the less you pay in total because the payment of tuition is calculated on a monthly basis. And because learners can stop and go back at their convenience, they’re motivated not to turn their back on education. It’s not a huge upfront commitment anymore. This is how education should be like to remain relevant. People should enjoy the freedom to come in and out of education throughout their lives. 

 

Do you cater only to individuals or are you offering something tailor-made for companies?

While we cater to both individuals and businesses, we do not tailor-build courses for companies. However, Nexford is committed to solving one of the world’s biggest employer challenges – skills – and bridging the gap between learners and employers. Through partnerships with companies such as Eva Pharma, the CIB, Ghabbour, and Hassan Allam Holding in Egypt to upskill employees, we aim to enable employers to find qualified entry-level talent and provide learners with skills employers demand while also helping students with affordable access to university.

What we do is that we custom make or custom develop certificates for the companies. We put together courses in bundles based on what that company is looking for in terms of skills. So, suppose they need a program that will deliver finance and business analytic skills; in that case, we package the certificate to include only the relevant courses to the skill gaps that the employer has. We also have skill-gap assessment tools that employers can send to their employees to help us understand more about their needs.

 

What’s the scale of your business? How much funding have you received overall?

Our main two offices are in the US and the UK, but we have members all across the world. Currently, we cover Africa, Southeast Asia and the Middle East. 

As for funding, we have raised $14 million over the past four years through two rounds. 

 

What were your biggest obstacles to seeing your idea to execution? Did you have any specific requirements with any regulatory bodies to operate?

Higher education is a heavily regulated industry and an industry that has, to a large extent, avoided disruption for decades or even centuries. It is deep-rooted in tradition, legacy, and even bureaucracy. So, building a new model that is modern, innovative, and customer-focused while still remaining compliant with the regulators has been a tough journey.

Combining the tech-enabled sort of start-up model and the regulated market is quite the challenge. Tech typically isn’t heavily regulated, whereas we are. So, it took us a long time to get there. It’s also costly and difficult to become licensed as a university. Now, we have our own university license in Washington. And we have to remain compliant to renew it. 

 

And what about your business model? 

The majority of our revenue is generated from tuition fees payable on a monthly basis. I think of it as a subscription model, where our learners pay a flat monthly fee, without any hidden fees or extra expenses. We don’t have a freemium model, where learners can come in for free and pay later. Anyone who enrolls has to pay.

Affordability, flexibility, and relevance are at the heart of our business model. We’ve addressed the three aspects from day one. Learners can study at the time of their choosing, so long as they adhere to weekly deadlines. Our tuition is exceptionally affordable and payable on a monthly basis, and everything we teach is designed to deliver relevant skills.

 

Can you offer any information on your user statistics with respect to demographics and/or any other interesting insight, especially when it comes to your userbase in the Arab region? What’s the number of users so far? 

While we have a community of learners – over 4000 – from over 85 different countries, who mostly belong to the middle-income brackets. Overall, the average age of our learners is 32 worldwide, and the average completion time for our MBA program has been 15 months. Egypt is our second fastest growing market accounting for about 10% of our revenue now.

 

Can you share any figures on YoY growth for the top line, EBITDA, bottom line, or maybe a CAGR over a particular period? What period did you notice the biggest growth? Any correlation with pre/post-COVID-19? More specifically, how did COVID impact your business?

In 2021, we grew over 200% year on year. COVID has significantly increased the level of awareness of online education; more importantly, it accelerated digital transformation by seven to ten years. Millions of jobs have gone either completely remote or mostly remote, and this is here to stay. So, talents worldwide will now have access to remote jobs regardless of their location. This will be extremely impactful in terms of social and economic mobility across the world. 

We recently launched the Global Grid to help support our community in getting on this virtual global grid of career opportunities. Some 87% of global employers admit to facing skill gaps, and, over the coming decade, the shift to remote work is going to transform career prospects for learners across the world. Mentorship through the ‘Global Grid’ initiative will help Nexford University learners get on this global grid and prepare them for future careers.

 

COVID-19 was a game-changer for the edtech industry, with more players entering the market. How did it impact your business? Can you discuss your market in terms of competition? What is Nexford’s competitive edge?

We started in February of 2019. The level of market awareness that we would have needed to create to drive global awareness about online education would have required years and maybe millions. So, COVID got the job done. The questions we get now are very different from those we got pre-COVID. It’s no longer an issue of the credibility of online education as a concept. 

And the same goes from an employer perspective; the pandemic significantly accelerated digital transformation. It brought to the surface how much companies need to invest in digital transformation within their organizations. 

As for competition, it is a good thing for us. We’re not trying to take any market shares from others. We’re actually expanding the market itself. In most of the markets where we operate, there’s a supply shortage. 

As for what sets us apart, we are the only American university in the world born 100% online, built for emerging markets, and designed for scale. Equally, because of our tech-enabled business model, we deliver comparable outcomes at a fraction of the cost of our competitors. Simply put – there is no other American university offering at our price and quality.

 

What are your next plans? Do you plan to raise additional funding? Any plans for further expansion, whether in terms of products or regions?

We expect to launch several new programs over the coming year and every year. Right now, we have many business programs, or what we call the intersection of business and technology, like artificial intelligence (AI) and e-commerce. And we’re going to launch new pure tech programs later this year.

We’re currently raising a series A round, led by a US investor, with the participation of others from across the world. We aim to secure $12-15 million, which we will use to finance new programs, technology development, and market expansion. 

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