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Why Venture Capitalists Are Betting Big On Indian Edtech Sector

With over 4,530 active edtech startups in India today, venture capitalists are increasing their shareholdings in the growing edtech sector

Photo Credit : Shutterstock


Over the last decade, edtech (short for education technology) has been acknowledged as a necessary innovation to resolve the challenges in the present education system around the globe. The fact that the forthcoming generation is heavily dependent on technology is not just a coincidence with the rapid growth of the edtech industry. The push that gave the edtech industry its final edge was the pandemic, which though pushed many sectors into a catastrophic journey, gave an immense boon to the edtech industry.

Online education has revolutionised the whole educational system leading to a compound annual growth rate of 19.9 per cent in 2021 to USD 377.85 billion by 2028. Nearly 95 per cent of schools are using the technology as part of their system to increase efficiency. Speaking of edtech revolutions, Byju’s, the world’s most valued edtech startup, is an extremely important case study to consider as it landed many accomplishments including but not limited to hitting USD 12 billion valuations in its recent round of funding of USD 200 million led by BlackRock and T. Rowe Price in November 2020 and acquiring seven companies including Vidyartha, TutorVista, and Edurite.

Rise In User-Base
From 2015 till March 2020, Byju’s had garnered 45 million free users on the platform, with 3.5 million paid subscribers and, in the last few months, the number has gone up to 70 million users and 4.7 million subscribers.

The USD 11 billion edtech startups have wrapped up a five-year cycle of renewals and have closed the year with an 86 per cent renewal rate. Byju’s popularity reached its peak by becoming one of the official sponsors for the ongoing Indian Premier League.

There are over 4,530 active edtech startups in India today, out of which 435 were the result of the past 24-months alone. The total funding raised by these edtech firms since 2010 stands at USD 2.46 billion. Byju’s and Unacademy have raised the most capital USD 2.32 billion and USD 354 million respectively in the year of the pandemic.

Amidst the presumptuous association between teachers and students in the edtech industry, Teachers Pay Teachers is a unique edtech company founded in 2006 in New York that connects teachers with teachers allowing them to exchange study material. Such unique developments in the industry are keeping it moving at an unfathomable rate.

The edtech user base has grown from 45 million to 90 million in the k-12 & post k-12 sector, in a report by RedSeer & Omidyar network India, including both free and paid users.  The report also says that those who are willing to pay have increased by 40 per cent and the number of paid users has increased by 83 per cent.

The online education offerings are said to increase 6.3 times by 2022 creating a market of $ 1.17 billion. As per a recent Linkedin survey, almost 63 per cent of professionals have also increased their time spent on online learning to enhance their skills or reskill themselves to stay relevant.

Post-Covid ERA

Edtech aims to improve student outcomes, enhance individualised education, and reduce the teaching burden from instructors’ higher learning degrees, diploma and certificate courses across domains such as data science, digital marketing, artificial intelligence, and machine learning, in association with recognised universities globally. It offers a variety of highly adaptive, engaging and effective learning programs for students in classes 4-12 (K-12) and competitive exams like JEE, NEET, CAT, IAS, GRE, and GMAT.

Future Of Edtech
Education technology solutions are expected to evolve in line with the advances in the latest technologies, such as the Internet of Things (IoT), Artificial Intelligence (AI), Augmented Reality (AR), and Virtual Reality (VR), and contribute significantly to the market growth which offers an interactive learning experience online. Zooming into the global investments, HolonIQ released a report showing USD 7 billion global education venture capital funding in 2019. They are also predicting a tripling of investment in edtech over the next decade.

Looking more broadly in scope to include learning technology suppliers, according to Metaari, there was USD 18.7 billion of global private investment in learning technology suppliers in 2019.
Moreover, when the government intervened with NEP (National Education Policy) 2020 it aided the exponential growth of the edtech industry with predictions of further rise in the growth rate.

From an estimated size of USD 700 million today, the edtech market is headed for 8x to 10x growth in the next five years. The radical set of policies is predicted to boost the industry to build vibrant communities of academicians and nobles, break down damaging silos, and enable students to become an all-rounder.

Furthermore, features and innovations keep on piling up to suffice the roaring needs rising due to the enormous demand for online education especially due to the pandemic and the limitations it poses.

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magazine 16 Aug 2021 EdTech Startup edtech