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Is EdTech the next big export from India?

Created on 20 Apr 2021

Wraps up in 6 Min

Read by 2.4k people

Updated on 25 Aug 2022

If 2020 has taught us anything, it’s that you don’t need a brick-and-mortar setup to learn stuff. But is it scalable? Can India really take EdTech global?

Well, let's discover.

When Ronnie Screwvala of upGrad said, “One could, along with religion, cricket and Bollywood, also add education to what comprises the holy grail of this nation.”, we all felt it, right?

The Indian education market is huge! It’s growing by leaps and bounds, and is one of the three fastest-growing education markets in the world! It is expected to double its size to reach US$ 225 Bn by FY25. Well, that’s no easy feat! Anyway, when India educates, productivity follows. That’s the one magic sauce India badly needs for its trillion dollars’ dream.

And all of this is only going to accelerate with the EdTech of tomorrow! Since the digital disruption of the 21st century, India was already (slowly) working on blending its education system with technology. But it needed a tipping point, and that came with this ‘cloud with a silver lining’ - 2020. Covid changed the dynamics. From relatives asking “Chintu ke exam mei kitne marks aaye?” to them asking “Chintu ne aaj kaunsa naya app banaya?”, it’s been a much-needed behavioral shift, isn’t it?

Just so you know, the government expects that by 2030, India’s EdTech expenditure could rise to a massive US$ 10 Trillion! Whoa!! But is it gonna materialize? Is EdTech going to be India’s next global export? Well, let’s explore.

The Indian EdTech Story

The year is 2005. At a time when digital penetration in India is less than five percent, a gentleman from Bangalore dares to come up with an idea to provide affordable local tutoring for American students. TutorVista was born. And Educomp followed suit. With a few acquisitions and fundraising, they were doing a pretty decent job in Indian markets. What could be India’s next big export tree had already sown its seeds!

But fate had something else in store for them! In 2011, UK-based Pearson acquired TutorVista, and Educomp’s revenues collapsed. What was believed to revolutionize Indian education system now seemed like a passing fad!

Around the same time, a pioneer was in making. A tutor for CAT aspirants travelled to cities across India and taught over 1000 students by 2012. He did it before it was cool! Probably you guessed it right, it was Raveendran Byju. But he soon realized that this nomadic setup limited his scalability!

And that brings us to the dawn of the world’s second most valued EdTech startup today - BYJU’s. Taking their cue from BYJU’s, traditional coaching players like FIITJEE and Aakash also moved online.

But the inherent problem was a behavioral rigidness! Indians loved shopping online but learning offline. And it made sense… you see, a bad online purchase could disappoint you for a day but a bad online teacher could disappoint you for a lifetime! Trust is an offshoot of quality. So, Indian ed-techpreneurs had to get the quality sorted in the first place.

India lacked qualified teachers. Developed economies had three times as many qualified teachers as we had per student! Fees were high. Anyway, with the kind of low-cost tie-up models with demo classes that edtechs provided, online education was gradually being perceived as a good bang for the bucks.

However, the real issue was accessibility! Digital adoption was on, but miniscule. Tech was a laggard, especially in tier-3, tier-4 cities, and villages. India badly needed some angel in disguise to build a nationwide data pipeline for these platforms to be accessible.

And the prayer was answered: "Jio ho!"

With the low-cost data offered by Reliance Jio to a massive mobile phone user base (500 mn +), edtech’s hug became all the more embracing!

The rocket that launched with BYJU’s was nowhere to stop! By 2016-19, more startups came flowing in, Unacademy, Vedantu, Toppr, Simplilearn, upGrad, WhiteHat Jr, InterviewBit, Testbook, to name a few. You won’t believe that a record 4500 EdTech startups were launched in India by 2018! Schools and colleges also moved online, and smart classes came into being with Edunext, MegaExams, Veative Labs, etc. The government also came up with e-learning portals like Swayam, Sankalp and DISHA.

Fast forward to 2020, and EdTech was on fire! Staying at home and WFH skyrocketed the learning times by a whopping 250%! India’s EdTech market had already become a massive US$ 2.8 Billion, nearly four times that of 2019! Venture Capital investments too grew almost four times between 2018-20.

The most notable of all, BYJU’s, which became a unicorn (valuation of US $ 1 Bn) in 2017, now came to be valued at US $ 12 Bn, a crazy twelve times swell in just a matter of three years! This EdTech behemoth had already acquired the trailblazer TutorVista (from Pearson), WhiteHat Jr and Aakash, to name a few. BYJU’s leapfrogged like anything to become the world’s 2nd most valued EdTech startup and is, apparently, the torchbearer of this revolution in India.

And hopefully, this story continues...

Growth drivers of Indian EdTech

Digitalization is a prerequisite for EdTech. And as evident, we’re having a dream run towards a Digital India. By 2020, we had an internet user base of over 750 Mn and smartphone users more than 700 Mn! By 2025, we could add 100 Mn more to these figures. Needless to say, there’s this huge untapped consumer base ready to be disrupted by EdTech.

EdTech also rides on the loopholes of the current education system. According to a BS report, one in six school teachers are not professionally trained, whether you attribute it to lower salary or lack of training. Online mode eliminates this by bringing onboard good teachers from around the world and by ensuring that they actually know stuff. No wonder why, the K-12 segment (kindergarten to class-12th) and the Test preparation segment, the two groups that really need good tutors, have the highest market share in Indian EdTech. There’s also this cost factor. A report by KPMG tells that online education is about 53% cheaper than offline classes! Value for money, isn’t it?

And with funds pouring into startups, it’s not hard to imagine the EdTech market to grow an expected 3.7x times in the next five years to reach a humongous US$ 10.4 Bn!

Challenges before India’s EdTech dream

It won’t exactly be a cakewalk anyway. While the digital population in India is growing, it’s still far behind its peers. WEF finds that only 15% of Indian households have internet access and we’ve only five broadband subscribers in every hundred people! And there is this cybersecurity threat as well! What’s more is that India’s rank in internet connectivity strength has dropped from a poor 108 in 2018 to an even poorer 121 in 2019! Oh, all of that comes later, you’ll have to get the electricity bit sorted in the first place.

So naturally, for EdTech to flourish, digitalization has to be scaled up rapidly, and rather effectively.

There are certain other inherent problems with e-education. They don’t get academic credits and credibility, and thus, make little sense in this still prevalent stereotypical ‘single-piece-of-paper-decides-your-future’ mindset!

Yet another stumbling block is standardization in e-education. See, you’ll agree, there’s no such one-size-fits-all concept in tutoring methods. Some students are born-bright, while some need a bit more attention. And that’s where wall-bounded classes have an edge over online modes. There’s this element of a personal touch as you interact with your teachers, you sit amongst a group of fellow mates and learn values that no course will teach you. Probably, embedding EdTech with FAQs, live chatbots, gamification, AI/ML and hybrid classes can go a long way in overcoming this issue.

So, is India taking EdTech global anytime soon?

Well, we are already! BYJU’s has geared itself up to set foot in the global markets with its Future School to be launched in the US, UK, Brazil, Indonesia, and Mexico in the coming months. White Hat Jr. is already into Singapore with its beta version. Simplilearn claims over 60% of its revenues is from foreign markets. Overseas enrollment in upGrad doubled, while in Great Learning, it became 5x, in the last one year.

With over 70 per cent growth in global enrollment in Indian EdTech startups last year, one can clearly visualize India making its way towards an emerging EdTech hub of the world!

Conclusion

It’s 2021. Uncertain times are back again! WFH and online classes have rejoined the new normal. Exams are being postponed or made online. Classes and meetings, all from home. Schools need partners to effectively reach out to students. Businesses need relevant digital skills training for their workforce that may be working from home for an extended period. No wonder why Indian startups are perfectly positioned to fit both of these roles.

The Indian government is getting increasingly enthusiastic about the digitalization of everything and funds are also pouring into these highly-ambitious startups. Apparently, with the best Public-Private Partnership model we’ve ever seen, this EdTech of tomorrow is all set to be the next big export from India!

By the way, what’s your take on this? We’d love to read it in the comments below.

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Abhishek Sahoo

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Abhishek has a love for numbers and words alike. With a passion for finance and interest in writing, he’s blending both as a Finance Content Writer at Finology. He writes to simplify the toughest of the technical stuff for readers and tries to make the reading exercise interesting. He is a CA Final candidate and aims to pursue a management degree from a top-notch b-school.

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