Edtech firms ride pandemic waves to dominate Indian education market

Indian edtech firms lead worldwide boom

Business

September 4, 2021

/ By / New Delhi

Edtech firms ride pandemic waves to dominate Indian education market

The business of edtech is expected to top USD 30 billion in the next decade. (Photo: Thomas Park/Unsplash)

While the outbreak of the Covid-19 pandemic resulted in massive losses for most business around the globe, the education technology (“Edtech”) sector registered massive, unprecedented growth around the world. This boom has been unmistakeable especially in a country like India, which has one of the most competitive education systems in the world.

One of the first successful edtech companies, the non-profit Khan Academy, was launched by an Indian-origin American, Sal Khan. The organisation’s videos have been viewed almost two billion times and later inspired many more edtech startups to come into the market, even winning prestigious awards.

Such business offer lessons and tutoring for courses, both in school and college, and have expanded to preparing students for national entrance examinations such as IIT and JEE and international examinations such SAT and GRE.

But the outbreak of the coronavirus pandemic in India that led to a closure of all educational institutions in early 2020 has seen a whole range of other companies that have not just emerged on the scene but have also begun to dominate the entire education market across the country. Byju’s, Unacademy, Upgrad and Vedantu, these names are now familiar in most households with children and access to internet at home.

Of these, Bengaluru-based Byju’s is the market leader which is valued at USD 16.5 billion as of June 2021, making it the world’s most valuable educational technology company.

“The edtech boom had already been happening since the last few years, but the pandemic took it to another level. People were already getting more comfortable with online learning. Education also needs to adapt with new technology, and there is so much more that can be done rather than just using the traditional ways of learning and teaching,” Devanshi Tripathi, a senior manager at Byju’s, tells Media India Group.

Tripathi explains that Byju’s, which was founded in 2011, saw demand right from the beginning, as clients and organisations were already looking for different ways of innovating their education methods. In fact, the education industry as a whole has drawn private equity investments of USD 4 billion in the last five years. Although some of these companies were already big players in the market, the pandemic signified a large boom, aided by an increase in internet penetration in the country; by the end of 2020, nearly 50 pc of Indians had access to the internet, more than two-thirds of them through their smartphones only.

Money, money, money

With the pandemic moving the entire world to the digital mode, everything that was digital or anywhere close to digital was chased after by investors pouring in billions of dollars in practically all the players. Sure enough, India’s edtech startups also raised over USD 2.2 billion in fresh funding last year. Byju’s accounted for USD 1.35 billion by itself and since the lockdown, has added 33 million users to its platform, with recent numbers surpassing 80 million. Unacademy’s customer base tripled to 40 million users in January 2021. Flush with funds and unable to cope with demand, these companies went hunting to acquire additional capacity, leading a spate of acquisitions. While Unacademy bought  CodeChef and PrepLadder, Byju’s acquired LabInApp and WhiteHat Jr.

The unprecedented growth in demand for online education also prompted emergence of several smaller startups which have had to innovate and distinguish their e-learning models by filling in niche markets in order to keep up with the growing industry demand and competition. Collegeshala, an edtech company based in Kolkata, was founded as a community-driven platform to cater specifically to the “20 million non-engineering, non-medical students of the country.”

Many a niche unexplored

“There are a lot of edtech companies, but most cater to the technical undergraduate sector There wasn’t any model that existed for non-technical undergraduate students like B-comm and Bachelor of Performing Arts (BPA) and my co-founder, who was a Communications undergraduate, had also experienced the same kind of problem,” Upamanyu Chatterjee, a co-founder of Collegeshala, tells Media India Group.

“Many edtech companies also only concentrate on a niche in society and are focused on generating their own premium content and then integrating it towards the student. We are more focused on aggregating and creating local and regional ecosystems by generating local content and then distributing it. In every Indian college, they have a differently-aligned syllabus and the priorities are different. So that is how the concept of CollegeShala came; we ensure that you are studying from the professors from your own university, in the convenience of your home,” he explains.

Many of these companies have also introduced social initiatives to help students from schools and colleges in remote areas who have been unable to access quality education during the continuous lockdowns, which was a huge factor in bridging the economic gap. For example, Byju’s flagship program, ‘Education For All’, has collaborated with multiple NGO partners to roll out the programme, which provides free of cost app licences to underprivileged people who do not have access to digital learning and high quality content.

“The rural population constitutes a huge sector of Indian society and they were the most highly impacted. Urban areas of society still have access to technology, to the net, to coaching classes, parents to monitor your learning. But in the rural areas, most schools were shut with no other mode of learning provided, and since a lot of students didn’t have other means of learning, their studying completely stopped. That is why we thought we should take the products to the students because they cannot go to school but at least in a way, school can come to them,” says Tripathi.

Teething troubles

One initial problem faced by edtech companies was helping new students and teachers who were unfamiliar with these technologies adjust to a completely new mode of learning.

“In the beginning, it was difficult to encourage professors to come onto the platform. They were not very sure about their intellectual property and curated content going live and becoming accessible to everyone, so they were pretty wary of that. There was also a caveat in getting them assigned to create curated content and getting students to accept the change. Before the pandemic there was also a mentality problem among students: many of them wanted to learn through physical mediums, they wanted hard copy notes, they wanted to go to tuition, and many were not really comfortable adapting to a digital context. But during the pandemic there was a radical mentality shift where students preferred a digital media, which helped in our growth,” explains Chatterjee.

Since teachers were also having a difficult time engaging and interacting with new technology, edtech platforms like Quizizz were used to provide solutions to teachers and help them adapt. The success of the edtech market has also prompted other digital education platforms to crop up outside pure academics, such as career and personal development. For example, UpGrad, which is a platform providing online courses for upskilling, saw their user base grow to 100 pc, and raised USD 120 million in funding from Singapore’s sovereign fund Tamasek in 2021.

As the pandemic shows signs of slowing down and schools start to reopen, edtech investors and startups will have to expand and create new products to attract clients and sustain their growth. But the last two years have been very good for edtech companies, which have made significant inroads into the education market per se and the business of edtech is likely to top USD 30 billion in the next decade, according to a 2021 report by transaction advisory firm RBSA Advisors.

“Earlier, most people would look at online learning as a hybrid model and an added tool to the already existing methods and say you cannot really do away with physical forms of learning, but now a shift has happened and people have had to move out of their comfort zone. With the pandemic, e-learning has become a mainstream way of learning and teaching,” says Tripathi.

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