Author — Aneesh Aggarwal (LinkedIn)
When we consider the impact of Covid-19 on businesses, EdTech is one sector that stands apart. India’s EdTech sector has seen a booming J curve growth since, to the fact that some reckon Covid was to EdTech what demonetization was to Fintech in 2016. To put this into perspective, according to the Indian Private Equity and Venture Capital Association (IVCA) EdTech startups raised over $2.2 billion in funding in 2020, with BYJU’S alone accounting for $1.35 billion, as compared to $522 Million in 2019. This is more than total funding in the last 5 years combined. Of the total funding raised in 2020, online test preparation startups like BYJU’S, Unacademy, Embibe, etc, grabbed 79% followed by 8.4% for online certification startups such as upGrad, Vedantu, and others, as per data recorded by Inc42 Plus.
It wasn’t just the valuation that jumped, startups also saw massive user growth in the year. BYJU’s alone saw its numbers grow from 45 million free and 3.5 million paid users to 70 million and 4.7 million respectively. As overall Indian EdTech industry is expected to touch $30 billion in the next ten years (according to a report by transaction advisory firm RBSA Advisors), online education offerings for Classes 1 to 12 are projected to increase 6.3X by 2022 from the base of 2019, creating a $1.7 billion market, while the post-K12 market will grow 3.7X to touch $1.8 billion. Key services in this segment include adaptive learning platforms, learning management systems, smart classroom solutions, and collaborative platforms. These tools plan to foster understanding and capabilities that focus on real-world skills. The most integral part of all these startups is making assignments more digital and fun as compared to traditional pen and paper. The K-12 segment is currently followed by online certification and skill development which are more focused on updating skills for young and experienced workers building a talent pool for new age startups looking for technologies like artificial intelligence, robotics, blockchain, and many more.
India’s education system is one of the largest in the world with more than 271 million students enrolled in schools and around 37.2 million students enrolled in undergraduate and postgraduate. For India, EdTech had been growing because of increasing internet penetration and the availability of cheaper smartphones and low data prices. Covid-19 further expedited the growth multifold. It helped in broadening the scope from supplemental platform services to B2B products helping transition offline educational infrastructure to online during lockdowns. Several startups which had earlier struggled to attract users due to high prices or low awareness have seen vigorous growth, engagement, subscription and renewals.
It all sounds rosy, doesn’t it. True, the sector has seen hockey stick growth in the past year, but what remains to be seen is whether startups are able to maintain the same levels of growth and engagement post lockdowns. The efficacy of online models for junior students is another concern for many. Overall, the digital transformation of the Indian education system will enable a new virtual space of learning and these startups are coming up with innovative business models and product solutions focusing on the engagement of users through customization, gamification and interactive applications, needless to say, profitability will be key to unlock the potential in EdTech going forward.