Unleash the edtech potential in India…

Global EdTech started the last decade with $500m of Venture Capital invested in 2010 and finished 32x higher at $16.1bn in 2020, nearly 2x the previous investment record in 2018.US and China are continuing to grow, along with spectacular rise of India as an EdTech powerhouse. Indian EdTech Startups saw investment of more than US$ 2 bn in 2020 – largest in the last 5 years.

Over the next decade, the Indian Edtech industry is valuated at an ambitious level of US$30 billion. India already has seven edtech unicorns and more may join the bandwagon. These include PhysicsWallah, Byju’s, Eruditus, Unacademy, Lead, Upgrad, and Vedantu.

‘Unleashing EdTech Potential in India:’a report by RBSA Advisor

Quality education for a child is an aspiration of every parent in India. Indian education system, being one of the largestacross the world, caters to the education needs of massive population of ~430 mn between the age group of 6-23years.

Though, formal education system in India is multi-fold and regulated, the demand for informal education which includes supplemental learning tools, coaching classes, test preparation, vocational training etc. has grown up significantly in last five years as a result of introduction of education technology in India. The transformation is significant in tier 3 and 4cities, towns and villages where the students have been able to get access to quality education at the remote locations through edtech platforms.

Fortunately for India, the introduction of edtech has coincided with growing internet penetration in with availability of cheaper smartphones and low data prices. This has increased ease of access to the quality education through variouslearning platforms among Indian students across the nation.

India has emerged to be among the top three countries in the world after China and USA to get the venture capital funding in edtech sector.The sector has attracted private equity investments of ~US$ 4bn in last 5 years which has led to the emergence of globaledtech leaders like Byju’s commanding a valuation of US$ 15bn. The market has also witnessed consolidation of the sector with aggressive M&A activities leading to the market leaders like Byju’s, Unacademy, UpGrad, Vedantu etc. Withcurrent market size of USD 700 – 800 mn, we expect the edtech to become a USD 30 Bn industry in next 10 years on the backing of growing demand and evolving business models.

Further, lockdown imposed due to Covid – 19 has increased the demand for edtech products multifold. It has broadened the landscape of edtech products from supplemental education platforms, test preparation and vocational training apps to B2B products helping the conventional educational infrastructure to go online. The pandemic has been a shot in the arm of edtech and we strongly believe that the current edtech product landscape will keep on evolving with newproducts focusing on providing more customised and personalised learning experience for users.

Education in India –Demand and Supply

• India, with enormous potential to reap demographic dividend, has a population of ~438 MN between the age group of 6-23 seeking education at various level.

• India has 56 of the world’s best universities as per Times Higher Education (THE) World University Rankings 2020.

• NEP 2020 offers multiple exit options and appropriate certification within undergraduate education period and an Academic Bank of Credit will be established for digitally storing academic credits earned from different institutes so thatthese can be transferred and counted towards final degree earned.

Business Models in Edtech

Support Type: The main businesses provide digital tools such as school administration management and learning manage mentsystem (LMS), program creation tools for adaptive learning and communication tools to educational institutions andprivate tutoring schools etc.

Platform Type: Operations of platforms fordelivering existing educational institution and educator programs and content to learners (MOOCs/language education, vocational education etc.

Integrated Type: In-house production and development of lesson videos and learning content anddelivery on websites and smartphone apps.

The first to emerge was support for business operators, and companies providing such support are growing mainly in developed countries with the established presence of educational institutions and private tutoring schools.The business model of platforms for learners is also growing mainly in developed countries where educational institutions are already established. Companies providing services called Massive Open Online Courses (MOOCs) are showing particular growth. In contrast, companies providing integrated services from content development to delivery are growing significantly in emerging countries like India and China. These services are focused on the field of supplementary learning, capturing learners in areas with a shortage of conventional private tutoring schools and home tutors.

Current market size and forecast:

• Growth in the K-12 Edtech opportunity will be driven by strong growth in user base, with Edtech users growing

• proportionately faster than overall student base.

• Online education offerings for Classes 1 to 12 are projected to increase 6.3X by 2022, creating a $1.7 billion market,

• while the post-K12 market is set to grow 3.7X to touch $1.8 billion.This growth is expected to be driven by K12, higher education, test preparation and upskilling categories.

The future…

The report further states what future holds for us:

• Online learning is here to stay: Be it a blended or standalone model, online education is going to be an integral part.

• Number of Edtech start-ups to increase substantially: With 4X rise in funding, investor focus & rising demand for Edtech products, an increase in new Edtech start-ups is imminent.

• Schools / Universities to take digital route: Not just classes, schools & universities will shift their activities (admin, exams, evaluation etc.) online.

• More Collaborations: Schools & universities may partner with Edtech firms for relevant courses and technology collaborations.

• Digital Divide – Lack of Infrastructure & Vernacular content a hindrance: Focused investments in internet connectivity, devices, local language content

• Access to Global Universities no longer a distant dream: Edtech firms are collaborating with global universities to offer online Degrees.

• COVID has fast tracked Edtech adoption: Millions of students moved online during the pandemic adopting digital education. 5-10X surge in online course searches were recorded.

• More Mergers and Acquisitions: Large Edtech firms will rapidly go for merger & acquisition activities.