Digital Marketing Courses

Why Foreign Players Should be Attracted to the Indian Edtech Industry?

Indian Edtech industry
Written by Publishing Team

We identify the latest trends in the education technology industry in India, which is fueling its rapid growth due to the disruptions of Covid-19. India has a total of five Edtech unicorns, three of which emerged in 2021. The future valuation of the Indian edtech industry is pegged at US$30 billion, buoyed by rapid digital markets as well as pandemic-related uncertainty. India allows 100 per cent foreign direct investment in the education sector under the automatic pathway to approval.

As e-learning continues to grow in popularity, its reach is expanding worldwide due to pandemic-led restrictions. As a result, industry analysts expect India’s educational technology (Edtech) sector to become a US$30 billion industry within the next decade.

According to a report by RBSA Consultant, “Unleashing the Potential of Education Technology in India”, growth in the Indian education technology sector will be supported by rising demand as well as strengthening business models, aided by accommodative government policy. The new Education Policy 2020, also provided political impetus to the education technology sector by recognizing the role of technology in education.

Income inelasticity of education in India is estimated to be 0.93 against other expenditures, which means that at any income level, Indians are more inclined to spend on education. In addition, a National Sample Survey (NSS) on household social consumption indicated that there was a 26 percent increase in personal spending on education between 2014 and 2018.

Industry reports indicate that the total revenue of Indian edtech startups has doubled since fiscal year 2018 and is expected to only double. Besides the huge rise in the number of paid Edtech users (KPMG has forecast it to reach 37 million by 2025), the Indian education industry presents huge opportunities for foreign investors.

India’s educational technology sector: a primer

according to statista It is estimated that the current market valuation of the Indian education technology industry is US$2.8 billion and is expected to reach US$10.4 billion by 2025. At present, there are 9,043 educational technology startups in India. This trend has been fueled by factors such as India’s booming internet economy – which registered a total number of internet subscribers of 743.19 million (as of March 2020). In 2020, there were nearly 700 million smartphone users in India.

India Education Technology Market Size (Billions of US$)

Piece

2020

2025 (show)

K-12

1.16 billion US dollars

4.3 billion USD

Exam preparation

0.8 billion US dollars

3.99 billion US dollars

Online Certificate

0.58 billion US dollars

1.38 billion US dollars

skill development

0.26 billion US dollars

0.73 billion US dollars

sum

2.8 billion USD

10.4 billion US dollars

India Digital Learning Market Categories and Key Players

The digital learning market in India is categorized into the following sections: K-12, Exam Preparation, Online Certification, Skills Development, and Enterprise Solution. Key growth drivers for these segments include a large addressable market, convenience, and price advantage, as well as pandemic-led disruptions, backed by ever-evolving technological capabilities.

K-12: With a current enrollment of over 250 million, the primary and secondary education sector is the largest and most attractive segment for digital learning service providers in India. In this part of e-learning, other subsections include smart classroom solutions, online tutoring, online exam preparation, simulation and virtual reality, STEM learning, augmented reality and robotics, and assessment. Notable Indian players in this segment are Cuemath, STEPapp, Whitehat Jr and CampK12.

Exam preparation: It is another emerging sector in the field of education technology that has continued to develop in the past few years, with more and more users relying on these platforms to prepare for competitive exams such as JEE, NEET, CAT, IAS, GRE, and GMAT. This is mainly due to the convenience and cost-effectiveness of these platforms. Training institutions, such as Career Launcher and TIME, and top B schools such as IIM-Ahmedabad and IIM-Kozhikode have started offering mixed courses (combination online and offline) in the exam preparation section. The main players in this segment are Byju’s, Unacademy, Vedantu, Toppr, Embibe and Gradeup.

Online CertificateEmployability is the main factor driving the popularity of online professional education. Big data, project management, mobile app development, cloud computing, and digital marketing are some of the courses that are conducted by professionals to improve skills. Notable Indian players in this sector are Coursera, upGrad, Eruditus, Simplilearn, Jigsaw Academy, etc.

skill developmentEducation technology startups enable faster skills development, upskilling, and reskilling of workers in the gig economy and those in entry-level tech positions. In addition, they keep engineers and software developers updated with the latest and most reliable technologies. The main players in this segment are Disprz, InterviewBit, Quizizz, Edureka and Crio.Do.

Enterprise solution: This sector has seen maximum growth as companies work to integrate such solutions to stay sustainable in the pandemic world. The major market players in this segment are Liqvid, Classplus, Foradian, Schoolguru, Byndr, etc.

Key drivers of educational technology sub-sectors in India

Subsections of Edtech in India

growth engines

Exam preparation

big market address

Price advantage over offline counterparts

Availability of well-known players

Online Certificate

Partnerships with well-known universities/colleges

Convenience and popularity among working professionals

K-12

Parents’ tendency to pay

Price advantage over offline counterparts

Increase competition among children

skill development

Ease or convenience

Increased interest in developing skills

Price advantage

Enterprise solution

The need for online product offerings

Requirements for remote workplace management tools

Trends in the Indian educational technology industry

The education technology sector was rapidly expanding worldwide before the disruptions associated with Covid accelerated its growth by adopting technology tools in the education sector almost overnight. Indeed, the Covid-related Edutech boom has led to the growth of three of India’s EdTech operators (Eruditus, upGrad and Vedantu), bringing the total number of unicorns to five (after BYJU and Unacademy).

With new strains of Covid-19 emerging more frequently and the lack of clarity on when life will return to normal, e-learning initiatives will be the default option for disease control and convenience along with cost efficiency.

Significant increase in user base

EdTech companies such as Vedantu, Byju (teaching), Toppr (learning) and Unacademy (video lessons) have seen a huge rise in the share of traffic during the lockdowns caused by the pandemic. According to a joint report by BARC India and Nielsen, there has been a 30 percent increase in screen time on education apps on smartphones since the lockdown.

Moreover, BYJU has been reported to have added more than 33 million users to its platform to reach 75 million, while Unacademy’s user base tripled to 40 million users by January 2021. Toppr also recorded 100 percent growth in its user base. Paid users. The trends further indicate that the increase in screen time for online learning has increased not only for K-12 and post-K-12 classes but also for professionals. According to a recent LinkedIn survey, nearly 63 percent of professionals have increased the time they spend learning online to enhance their skills or rehabilitate themselves to stay relevant.

In 2020, Facebook teamed up with the Central Board of Secondary Education (CBSE) to launch an accredited curriculum on digital safety and online wellbeing, as well as augmented reality (AR). Facebook has partnered with Bengaluru-based group digital learning platform Startup Village to deliver the AR curriculum.

Value-added services with regular courses

It innovates more platforms to offer customized products to its target audience, by offering value-added courses such as group discussions, live projects, career counseling sessions, internships, etc. along with regular courses. Additionally, more advanced features such as personalized dashboards, accurate performance tracking, and skill mapping are offered to users by premium organizations in order to gain traction.

Gamification of the e-learning experience

Technology is leveraged to provide an immersive learning experience to users through optimized interfaces to ensure better knowledge acquisition. Trends such as concept simulation, level progression badges, and incentive-based learning are increasing user engagement on Edtech platforms such as BYJU and Cuemath.

For example, while using BYJU, during a practice test round, the app asks questions like, “Hey, did you answer this question too quickly?” To test a student’s approach to learning. Situations include an “adventure path to reveal the correct answers to questions,” or giving students “life lines” during exams.

Investment trends in the Indian education technology sector

India is among the leading markets for global venture capital financing in education, after China and the United States. Reports indicate that the Indian education sector has received nearly 300 billion Indian rupees (US$4.04 billion) in funding since the onset of the Covid-19 pandemic. According to data from the analytics company Tracxn, between January and August 2021, Edtech players attracted a whopping $3.81 billion in funding.

In 2021, India’s largest education technology company, BYJU’s, attracted the lion’s share of investments estimated at around $1.7 billion, followed by Eruditus with $650 million in funding and upGrad with $185 million in funding. In the same year, Unacademy raised a total of $440 million, pushing its valuation to $3.44 billion.

In 2021, BYJU made several acquisitions, including the acquisition of Blackstone-backed Aakash Education Services for approximately US$1 billion. Other holdings made by BYJU include: Epic – an online library for children aged 12 and under – for US$500 million; Singapore-based Great Learning – a company specializing in online education and higher education – for US$600 million; and Toppr in Mumbai – an after-school education platform – for US$150 million.

According to a report by Inc42 Plus, India recorded 346 Edtech financing deals between 2014 and the first half of 2020, worth $2.2 billion. Of this total funding, nearly 79 percent went to startups to prepare for the online test, followed by online certifications (8.4 percent) and K-12 (6 percent).

The players in the Indian edtech industry that secured major funding deals in 2020 are: Byju’s, Unacademy, Vedantu, Doubtnut, Embibe and Testbook.com in the Exam Preparation category; lido in the k-12 class; coding ninjas in online certifications category; and Classplus is in the Enterprise Solutions category.

The best edtech funding rounds were recorded in the first half of 2020 in India

start

Funding Amount (US$ Million)

Investor

Instructional technology subsection

Byju’s

200 million US dollars

Tiger Global, General Atlantic, Bond Capital

Exam preparation

non-academic

110 million US dollars

Facebook, Sequoia India, Bloom Ventures

Exam preparation

We see

43.3 million US dollars

GGV Capital, Legend Capital, Omidyar Network

Exam preparation

doubt

15 million US dollars

Tencent, Omidyar Network, Sequoia India

Exam preparation

ambebe

12.6 million USD

Reliance Industries Ltd.

Exam preparation

Testbook.com

8.3 million USD

iron pillar

Exam preparation

bit interview

20 million US dollars

Sequoia India, Tiger Global, Global Founders Capital

skill development

Class Plus

10.7 million US dollars

Bloom Ventures, Kunal Shah, Alvin Tse

Enterprise solution

lido

10.5 million US dollars

BAce Capital, Picus Capital, Madhur Deora

K-12

Code Ninja

5.2 million USD

information edge

Online Certificate


India Breaking Produced by Dezan Shira & Associates. The company assists foreign investors across Asia from its offices around the world, including in Delhi and Mumbai. Readers can write to india@dezshira.com for further support on doing business in India.

We also have offices or have alliance partners assisting foreign investors in Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Italy, Germany, the United States, in addition to practices in Bangladesh and Russia.

About the author

Publishing Team