Swedish Startup Space

Edtech Startup Digilär On The Competition: “It will be a tough fight”

Written by on August 4, 2016
Editors Note: This post is part of a series called Featured posts, presented by Breakit.

Tougher competition has forced digital learning company Digilär to lower prices – preventing them from achieving the turnover they had previously had hoped.

When Breakit interviewed Digilär’s CEO and co-founder Stellan Wigh just over a year ago, he said his goal was to reach a turnover of 10 million SEK in 2015.

The Spiltan-backed firm Digilär develops digital learning materials aimed at completely replacing printed books in high schools and junior highs. With the annual report now published on Bolagsverket (Sweden’s Corporate Registration Office), it is clear that Digilär has fallen short of their goal.

The reason? Stellan Wigh says the competition has increased.

“The problem for us, and our competitors, is that the market is oversaturated. If we had been able to sell at our target prices, we would have passed 10 million SEK in sales, and more,” says Wigh.

The increasing competition has instead caused Digilär to lower prices via promotional offers and packages.

“We are experiencing a very high pricing pressure, but while the market is still growing, it remains to be seen how much and at what rate,” he says.

Digilär’s turnover landed at 6.8 million for the full year 2015, an increase of over 21% from the previous year. At the same time, the financial posting shows a loss of 1.4 million SEK in 2014  grown to a loss of 2.4 million in 2015.

“We are a growing company. In order achieve greatness in a market that is constantly in flux, we are about to arm ourselves to the teeth. Therefore, we will take the result with quiet,” says Wigh.

Last year, venture capital firm Spiltan invested in nearly 10 million in Digilär, holding 49.9% of  the company. Spiltan has also invested in the gaming company Paradox and crowdfunding platform Pepins.

Stellan Wigh sees four primary competitors (including Digilär) in the fight for the market over the coming years. The toughest competition comes from Malmo-based Gleerup and Bonnier Education, which last year bought the Danish digital publisher Clio. The third, Nationalencyklopedin (National Encyclopedia) has also begun developing digital learning materials.

“We expect that it will be very tough for the next few years,” says Mr. Wigh.

Digilär previously had offices in Vaggeryd and Värnamo in Småland. With hopes of reaching out to secondary schools in the capital and nearby towns, they have now opened an office in central Stockholm.

“You have to claim as big of a stake as possible,” says Wigh. “In Stockholm there are, after all, one quarter of all Sweden students.”

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