Digitization is the trending term, describing the 21st century in the most precise manner possible. We are in the era where unprecedented ideas are unfolding in our education industry and creating the advancement that can’t be matched by lagging in terms of technology. The edtech sector has risen to new heights due to the rapid adoption and penetration brought on by the lockdown and the impact of the pandemic as it is attracting big money from investors as lakhs of students have moved to online classes.
As per DataLabs analysis, test prep and K-12 edtech startups combined are estimated to be worth $1.3 Bn by 2021. Besides K-12 education, coding is the next frontier for kids and younger students as a slew of startups are looking to gain headway in this segment. As many schools are going online and relying on virtual classrooms, the adoption of edtech B2B services and products will grow, just as enterprise tech tools have grown in the last 6 months.
As all learning institutes shut down for physical classrooms, stakeholders had to adapt at break-neck speed. For educators, the challenges were of upgrading both their infrastructure and human resources. With a high increase in the student population in recent times, pedagogy is being compromised. Because of that, online resources are being developed to make them always available to teachers to educate the masses.
A report estimates that education is a $117 billion market in India with around 360 million learners in 2019-20. Blume Ventures, Sequoia Capital, Nexus Venture Partners, SAIF Partners, and Indian Angel Network are a few of the leading venture capitalists supporting the high aims of the edtech companies.
The World Bank Group
The WBG works in partnership with governments and organizations worldwide to support innovative projects, timely research and knowledge sharing activities about the effective and appropriate use of information and communication technologies (ICTs) in education systems — “edtech” — to strengthen learning and contribute to poverty reduction around the world, as part of its larger work related to education.
The World Bank estimated the levels of “Learning Poverty” across the globe by measuring the number of 10-year old children who cannot read and understand a simple story by the end of primary school. In low- and middle-income countries “learning poverty” stands at 53%, while for the poorest countries, this is 80% on average. With the spread of the Coronavirus disease (COVID-19), 180+ countries have mandated temporary school closures, leaving ~1.6 billion children and youth out of school. 85% of children world-wide are affected.
National Education Policy 2020
Further ahead, the Union Cabinet in July 2020 approved the New Education Policy (NEP), which aims at universalization of education from preschool to secondary level. This will provide more fire to edtechs as NEP-2020 will replace the National Policy on Education-1986 and is an inclusive framework focusing on the elementary level of education to higher education in the country. The Policy reaffirms that bridging social gaps in access, participation, and learning outcomes in school education will continue to be one of the major goals of all education sector development programs.
Impact of the Pandemic on Edtech
The lockdown and fear of COVID-19 spread have taken schools, colleges, and educational institutes online, thus leading to the emergence of many EdTech products and services and a rise in adoption. Though in its nascent stage, there has been a significant transformation in curriculum development and pedagogy where we have moved from thinking digital to being digital. EdTech firms like Vedantu and Byju’s (tutoring), Toppr (learning), and Unacademy (video lessons) have seen a substantial rise in traffic share during the lockdown. Byju’s added 7.5 Mn new users during the lockdown; Toppr also recorded 100% growth in the paid user base.
The industry has attracted private equity investments of $4 billion in the last five years, leading to the emergence of global edtech leaders like Byju’s which now commands a valuation of $15 billion. The most commendable and extraordinary developmen was seen in Byju’s, an Indian edtech and online tutoring firm launched in 2011 by Byju Raveendran and Divya Gokulnath. The company has an estimated valuation of $16.5 billion with the highest market share in India’s growing edtech space. It offers students learning programs in classes IV-XII and courses to help students prepare for competitive exams like JEE, NEET, CAT, IAS, GRE, and GMAT. In April 2021, Byju’s acquired test prep firm Aakash Educational Services Ltd. in an estimated $950 million cash and stock deal and was funded by B Capital, Baron Funds and XNwith $1 Billion.
Unacademy is another Indian online education technology company based in Bangalore, created as a YouTube channel in 2010 by Gaurav Munjal. As a company, it was founded by Gaurav Munjal, Roman Saini, and Hemesh Singh in 2015, and is headquartered in Bangalore. The company has a network of over 18,000 educators. The company claims to have more than 10K registered educators and over 13 Mn learners. It also says it gets 100 Mn monthly views across its various platforms such as Unacademy, Unacademy Plus, Wifistudy, Chamomile Tea with Toppers, Unacademy Studios, and The Solutionists. Some of the courses offered are UPSC, SSC, JEE, NEET, IIT-JAM, NEET-PG, TET exams, CA CS, and LAW exams. To date, the company has raised $88.5 Mn.
The Way Forward
In the light of these trends, the next cycle of growth in the education sector will be driven by the 4 E’s: ed-tech, edu-content, e-learning, and entrepreneurship.
Given that the traditional focus has been on offline education, a mix of online and offline is what will propel the sector forward. As per DataLabs analysis, test prep and K-12 edtech startups combined are estimated to be worth $1.3 Bn by 2021. Besides K-12 education, coding is the next frontier for kids and younger students as a slew of startups are looking to gain headway in this segment. As many schools are going online and relying on virtual classrooms, the adoption of edtech B2B services and products will grow, just as enterprise tech tools have grown in the last 6 months.