How the pandemic proved to be a boon for the Indian EdTech industry and what lies ahead post-Covid. Scroll to More.
The pandemic has led to a boom in EdTech companies in India. Many EdTech companies like BYJU’s have now become a household names. But what are EdTech companies?
As the name suggests, EdTech companies are a combination of education and technology. Most EdTech startups in India are app-based platforms that offer students coaching for competitive exams (for eg. IIT-JEE, CAT, UPSC, GMAT) or provide supplemental courses.
Rise of EdTech startups during Covid-19
Even though online education has been around for 15 years, it only received a boost with the pandemic. Before COVID, India's EdTech business was developing, albeit at a slower pace, since online education still faced considerable opposition.
Covid-19 has shown that in today's environment, when pandemics and the effects of climate change are on the horizon, schools are unable to provide in-person instruction consistently, underscoring the significance of investing in educational technology.
The danger of COVID-19 spreading has forced schools, universities, and educational institutes to go online, resulting in the birth of several EdTech products and services as well as an increase in usage.
The number of students studying online in India has surged considerably since March 2020. In the last 10 months, the number of paid and free daily visitors to various edtech sites has doubled. This resulted in a boom in the country’s EdTech sector before the pandemic, there were approximately 4,450 EdTech startups in India.
This number grew to 9,445 startups after COVID. In 2020, EdTech companies such as Vedantu and Byju's (tutoring), Toppr (learning), and Unacademy (video classes) saw a significant increase in traffic share. Byju's gained 7.5 million new users, while Toppr's paid user base grew by 100%. The EdTech industry in India has grown at a CAGR of 52% since 2019, turning into a 1.96-billion-dollar industry.
Mergers and Fundings of Edtech Startups
The ed-tech industry saw mergers and acquisitions worth more than $3.35 billion in the first nine months of 2021, more than three times the aggregated sums raised in the previous two years — $416 million in 2020 and $783 million in 2019.
Similarly, ed-tech startups attracted $3.77 billion in PE-VC funding in the first nine months of 2021, greatly above the $2.22 billion and $968 million raised in 2020 and 2019, according to Venture Intelligence statistics.
Byju's has grabbed about half of the funds raised by ed-tech so far in 2021. This year, the company has raised nearly $1.5 billion. In January 2021, BYJU’s acquired Aakash Educational Services for $1 billion.
As part of its international development aspirations, the business purchased Singapore-based Great Learning for $600 million and US ed-tech start-up Epic for $500 million in July. Tynker, a code learning platform based in California, was purchased for $200 million in September.
Byju's $1.39 billion investment, which came from Blackstone and Silver Lake, is one of the largest in the ed-tech sector this year. Another EdTech giant, Unacademy, received a $440 million investment from Softbank, Tiger Global, and other investors.
Due to the minimal number of COVID cases recorded in India, schools and institutions have reopened. As a result, demand for online learning has decreased, and edtech businesses in India have suffered a setback.
Big Edtech companies that were once on a recruiting binge are now cutting off workers to keep their hybrid model afloat.
Last year, Vedantu, laid off almost 200 people. Unacademy, India's second-largest ed-tech startup after BYJU, has allegedly fired off 1,000 staff in a cost-cutting push in recent weeks. White Hat Jr, a coding platform owned and maintained by Byju's, has reportedly laid off 1,800 staff.
Lido Learning, a Mumbai-based company that delivered live online education in small groups of six, shut down in February and requested its 1,200 staff to resign. What some EdTech startups didn’t realize during COVID, was that growth which comes at the expense of heavy financial burn may not be sustainable.
Who is winning the Ed-Tech market share?
the Indian Edtech industry is now valued at a whopping US$2.8 billion! Out of the total market share, three players have a major piece of the pie. The clear winner of the Ed-tech market share is BYJU, with a whopping 57.5% of the total market share.
BYJU is followed by Unacademy with a 10.5% share, and then Vedantu with a 9.5% share. Other EdTech startups take up 22.5% of the total market share. With BYJU’s now turning into a decacorn startup and receiving the most funding, it is evident why it continues to dominate the EdTech market share in India.
Online learning is here to stay in the present educational system. Thus, the future of EdTech is bright, but it hinges on the sector's capacity to swiftly adapt to changing circumstances and provide tailored solutions across a wide range of categories.
To maintain the momentum, the industry must continue to innovate to profit from the gap caused by the closing of traditional classrooms. In the classroom, this innovation will encourage critical thinking, cooperation, and creativity. Immersive technologies like Augmented Reality and Virtual Reality can be used to bring these advancements in.