Ups and Downs of Edtech Industry in India

The educational technology or Edtech industry is one of the fast growing markets in India. Mainly, it is a tool for teachers and other academic members to make teaching, learning, and evaluation easier. Though it was initially limited to developed countries such as the USA, Australia, and the United Kingdom, the rise of this sector was keenly felt after the COVID-19 pandemic. Developing nations such as India and Brazil have also noted significant growth in this sector among the beneficiaries. 

COVID-19 was a blessing to this industry. During that period, people came to realize the need and importance of integrating technology into the educational field. Historically, the journey started in India in the year 2004 when technology was merely used in the classroom. Initially, this evolved in the form of smart classrooms or using software during the teaching process. In India, the Edutech sector grew tremendously between the years 2020 and 2021 and occupied the third position after China and the USA. Due to substantial growth, online education created hopes among the learners due to restrictions during the period of COVID-19. Also, stakeholders in the education industry tried to associate with various startup companies to impart low-cost education. Edutech partners such as BYJU’s, Unacademy, Vedantu, Lido, Teachmint, and Quizzes, etc., have started their operations on a larger scale, and their businesses have led to profits and new modes of hiring. The venture capital firms have also poured their money into these companies to make them stronger in their respective business domains. So, the entire COVID-19 period laid a strong platform for edutech companies to stabilize their business. 

However, there is a paradigm shift after the relaxation of COVID-19 guidelines among educational institutions. The demand has fallen sharply, and companies are now struggling. The reopening of schools, colleges, universities, and other educational institutions has drastically reduced the use of technology in education. Also, the valuation of the company and the funding pattern have been affected. Students, teachers, and parents are adapting to the new normal of offline classes or, in most cases, the hybrid model. Companies have started laying off employees. In the financial year 2022, Unacademy laid off 1000, Vedantu 624, Lido 200, Front Row 145, and Udayy 120. As reported by various newspapers and other media outlets, there will be more pressure on companies, and edtech companies are responding with alternate business models. Companies like BYJU’s have tied up with Akash to start the concept of Physical Coaching Centers. Unacademy has recently entered into offline learning as well. This shows that Edtech players are now opting for multi-channel business models to maintain profitability and must devise new strategies to cope with the current changes.

Despite the above challenges, the Edtech industry is expected to grow moderately and may reach US$ 30 billion by the year 2031. Also, booming technologies such as AI, ML, and IoT, etc., have provided a larger digital medium to expand and to design new cutting-edge courses. On the other hand, demand, affordability, and availability from the users' point of view are another scope for growth. Infrastructure development and increasing internet penetration also support to a larger extent. By and large, it is very apparent that this industry is running on a trajectory path and definitely has a brighter growth and development.

Prof (Dr.) Bhagabat Barik 
Professor and Deputy Director 
Institute of Management and Research, MGM University