Abwaab: democratizing learning in MENA

Biography:

Hamdi Tabbaa is the CEO and co-founder of Abwaab, a Jordanian edtech startup. 

Abwaab provides online lessons on various topics, designed for students up to 18 years old. The content is aligned with national school curriculums, making it pertinent for exam preparation. Abwaab also offers tools that help students test themselves and track their progress. 

The company has raised over $30M in funding. Prior to Abwaab, Hamdi launched a supermarket chain and led Uber’s MENA expansion. 

Your first entrepreneurial venture failed. What did you learn? 

Right after university, I launched Dukkan, a supermarket chain here in Jordan. I was inspired by the British Tesco model and wanted to bring organized retail to the region. 

I ran the business for over six years, trying everything in my power to make it work. I managed to painfully sell it while I was starting my new job at Uber. 

At Dukkan, I hugged the pie and wanted most of the company to myself. I took the opposite approach at Abwaab: I shared equity with co-founders, took on multiple investors, implemented stock option plans for employees… For your company to work, different supportive parties need skin in the game. 

Dukkan was my entrepreneurial university: I learned more lessons than I can enumerate (thinking I knew the market, spreading too thin, unrealistic margins…)

You then worked at Uber for over four years. Apart from the network, what did Uber equip you with?

I was initially in charge of Uber’s Jordan expansion, which turned into heading its MENA expansion. I led multi-country operations, without much guidance from management other than “figure it out”. That forges operational knowhow. 

While Uber didn’t give me precise instructions on how to do my job, they gave me resources to run my experiments. This led to two lessons I’ve plugged into Abwaab. 

The first is the importance of your company’s capitalization. Dukkan was cash-strapped, and I realized the difference that having sufficient resources makes. I promised myself that if I started another business, I’d raise the money I needed to fund its ambition. 

The second was the crucial role internal infrastructure plays in scaling. “Under the hood work” so to speak. That’s one of Abwaab’s primary goals for next year: build robust, internal tech infrastructure to support our growth. 

Indirectly, my experience at Uber equipped me with a co-founder as well! One of my co-founders (Sabri) used to be general manager at Careem, Uber’s main regional competitor (which Uber ended up acquiring).

What’s Abwaab’s thesis?

The MENA region counts around 100 million kids below the age of 18. Most of them attend public schools. And the region’s public schools have both a quantity and a quality problem. 

The quantity problem is that there are more students than schools. To palliate, some schools run multiple shifts a day, each student cohort learning for three hours only. There’s also a lack of sufficient teachers. If your village’s school couldn’t source a physics teacher, you’re not learning physics. As a student, this handicaps you for life.

The quality problem stems from a lack of resources. Regional governments don’t have enough money to properly invest in quality public education. Jordan’s PISA scores have been declining at worst, stagnating at best. 

These problems created a parallel industry of offline tutoring centers, plugging the gaps public schools left open. These tutoring centers are busy day and night. Students learn the same things they were supposed to learn at school, but better. 

This isn’t a MENA-specific problem. In India, the tutor industry got so big that influencer tutors rent out stadiums to give lessons. Byju’s, one of India’s biggest edtech startups, was founded by such a tutor influencer (unsurprisingly named Byju). 

The additional income parents spend on these centers heavily weighs on their wallets. Abwaab wanted to provide a more practical, tailored and cheaper alternative to them. 

Internal Abwaab slide

What are Abwaab’s main features today?

The product’s goal is to help students excel. Our stated mission is to unleash human potential. 

Each student is handheld throughout their learning journey by an advisor, which we call “Morshed”. That advisor guides the student through creating a schedule, staying up to date, tracking their progress… All of this visible via a dashboard. Morsheds have also ended up providing emotional support for students during exam preparation season, which we didn’t expect.

Then come the actual lessons (interactive videos we produce in-house, either live or recorded), complemented by transcripts and summaries students can read through afterwards. 

Finally comes the assessment part, where students can test their knowledge through mock tests and get instant feedback.

These are Abwaab’s three main pillars, but we’ll touch upon additional ones later. 

How do you pay the teachers producing these videos? Are they Abwaab employees?

Every Abwaab teacher gets a tailored contract. Some “star” teachers get paid based on the additional sales volume they generate, while others sign a fixed-fee contract. Generally, our teachers hold teaching positions somewhere else. We encourage that because it ensures they stay up to date with the latest curriculum evolutions. Today, we work with around 300 teachers. 

How does Abwaab make money?

It’s a B2C subscription model. Students (or their parents) pay an annual subscription (around $50) which unlocks the entirety of the platform. This price is a fraction of what parents would usually pay to put their kids through an offline tutoring center. In Jordan, we estimate that a 12th grader would pay $1,500-2,000 during their final year for offline tutoring fees.

Our sales funnel is quite classic. We get prospective students to sign up for a free version via a mix of performance marketing, ads on social media and partnership with local “influencer” teachers. Once a student is in our funnel, we call them to try and sell a subscription.

Why choose that model instead of selling bulk subscriptions to schools?

It’s another option, but one which we haven’t pursued. I know Little Thinking Minds, another Jordanian edtech startup, has gone down that route. 

The B2B school model isn’t adapted to us. It would require a different product. For schools, Abwaab isn’t an easy sell since we’d be somewhat “substituting” their current teachers with our online ones.

This means our product doesn’t have schools in mind: we don’t have a teacher dashboard, no learning management system (LMS)... We’ve been focused on the student experience and adapted our business model accordingly. 

How do you view Abwaab in relation to local schools? Competitors? Partners?

We know that education will probably never be completely offline, so there’s some space for us to work with schools and empower them with tech tools. It isn’t the priority for now.

How has Abwaab incorporated AI?

That topic has taken a much higher priority since ChatGPT’s grand release. AI is an exceptional opportunity to hyper-personalize students’ learning journey. There are a few use cases we’re exploring. 

One of them would be AI explaining a wrong answer to a student. AI could adapt that explanation depending on the student’s age and the mistakes they made prior. We have a BETA product that instantly grades essays, something we couldn’t scalably do before AI.

This excites me immensely. We’re entering an era where elite education will cease being an elitist product. Before, you could only learn from the best teachers if you could attend the best schools, which implied high socio-economic status. Soon, everyone could have access to the best teacher, bespoke to them, in their pockets. 

You’ve also introduced a fair bit of gamification. Why and how?

Some students (my son included) are motivated by competition. We’ve built Abwaab League, an internal scoreboard, to do just that. Your science homework becomes more fun if you can compete with your friends on it. 

We have a lot to learn from Duolingo on that front. While their “streaks” feature might sound simple, there’s a lot of science behind it. 

There’s a lot to build on that gamification, community front but we have to adapt it to our context. In our context for example, I don’t know if a “streaks” feature would work. It’s “cool” to show your adult friends you’ve been learning Mandarin for 50 days straight. For a 14 year old, it might not be “cool” to show their crush they’ve been doing math exercises on their phone for the past 50 days. 

Are there certain student demographics that you can’t reach? What % of your TAM does that represent?

We estimate that we can’t reach about 15-20% of the national student population due to income level and internet penetration constraints.

How do you think about international expansion? What are your best performing markets?

We operate in five countries across the region, with offices in Amman, Cairo, Riyadh, Baghdad and Muscat. 

For Abwaab, expansion into a new market isn’t just a matter of running local ads. Since our content is adapted to national school curriculums, every new country implies boots on the ground, sourcing local teachers and creating a learning experience that matches local customs.

What’s been your biggest expansion challenge?

Our expansion to Pakistan, which we’ve since retreated from. We entered the market via an acquisition but underestimated the country’s complexity. Pakistan has four large provinces, with distinct education boards. Different languages are spoken within the country.

Unlike our other markets, Pakistan doesn’t speak Arabic so we had to get the teams to speak English, which hindered communication fluidity. Pakistan also had challenging macro elements such as low buying power and massive floods that hurt the economy. 

What local, infrastructure issues make your life harder?

The absence of online payments in some of our markets. In Jordan and Iraq for example, we have to send drivers to physically deliver login codes to new subscribers, who then pay the driver in cash. 

My head of finance tells me that if we developed an Abwaab digital wallet, we could become the biggest neobank in the region. We’d be onboarding millions of the region’s students, who’d then bank with us as they age. It’s an interesting thought. 

What foreign proxies are you inspired by?

This is a tough one, not least for our investors, who love good comparables. For Careem, the example was straightforward (“Uber for the Middle East”) but Abwaab’s case is murkier. 

There used to be Byju’s in India, but the company is imploding, so it’s become more of a cautionary tale than a sexy benchmark. We tried to find comparables in China, but the government has cracked down on the edtech industry so that option went down the drain. 

We’re somewhat charting our own path at this point.

What’s been your worst strategic mistake?

Expanding regionally before nailing the product and deeply understanding what our students needed.

What’s the challenge you had on day 1 that you still have today? 

Explaining to students and parents the value Abwaab can deliver while being mostly online.

You worked with the Jordanian government during Covid. How did that change Abwaab?

It shattered any glass ceiling we thought we had. In the span of 48h, we were in charge of exponentially upsizing our operations and providing content for almost a million Jordanian students stuck at home. 

As a CEO, I realized that our execution capacity was related to mindset. A motivating purpose provided sufficient fuel to attain seemingly impossible goals. The question became: how do I sustain that mentality permanently?

While the experience was fantastic and put Abwaab on the map, it made us reflect on future, potential large contracts with governments. 

Our reasoning now is that while a potential boost, working with massive stakeholders risks hyper-tailoring your product to their specific needs, making it irrelevant for other clients. 

What’s been your most validating moment at Abwaab?

The beautiful thing about edtech is that you get validating moments everyday. You’re arming thousands of kids with useful knowledge and helping them advance in life.

If I had to pick one, I’d pick Mossab’s story. On a random day, this kid named Mossab walks into our office to thank us. Through Abwaab, he managed to get a scholarship to attend one of the country’s best universities. That type of encounter makes you realize that there’s an actual human being behind every support message we receive. 

Many MENA founders relocate to the GCC. You’ve kept your HQ in Jordan. Why?

Our HQ is in Jordan because a fair share of the executive team is there, but we have offices regionally. Ops and sales are usually local to each country. Jordan has great engineering talent, so it’s interesting to keep a fair share of the engineering team here. 

I’m personally spending more and more time in Riyadh due to the size of the Saudi market as well. 

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