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Profiling India’s Education Technology Industry: A $10 Billion Opportunity

Profiling India’s Education Technology Industry: A $10 Billion Opportunity


The latest trends in India’s Edtech industry are profiled in this post. The rapid growth of the ed-tech industry in India has been driven by the Covid-19 turmoil. There are five Edtech unicorns in India, three of which debuted in 2021. Because of rapidly digitizing markets and pandemic-related uncertainty, the Indian Edtech industry is estimated to be worth $30 billion in the future. In addition, India allows 100 percent FDI in the education industry under the automatic approval route.


As a result of pandemic-related restrictions, the global reach of e-learning is extending as it gets more popular. As a result, industry analysts forecast that India’s education technology (Edtech) market will reach $30 billion over the next decade.


According to the research ‘Unleashing EdTech Potential in India,‘ the Indian Edtech sector would thrive due to increased demand and improved business models, aided by favorable government regulations. In addition, the New Education Policy, 2020, has provided policy momentum to the Edtech sector by acknowledging the significance of technology in education.


In India, the income inelasticity of education is anticipated to be 0.93 compared to other expenditures, implying that Indians are more likely to spend on education regardless of income level. Furthermore, according to the National Sample Survey (NSS) on Household Social Consumption, out-of-pocket schooling spending climbed by 26% between 2014 and 2018.


According to industry figures, the overall revenue of Indian Edtech firms has more than doubled since the fiscal year 2018, and this trend is expected to continue. With an exponential increase in paying Edtech users (KPMG predicts 37 million by 2025), the Indian Edtech market has significant opportunities for foreign companies.


A Primer on the Educational Technology Sector in India


Statista estimates that the Indian Edtech business is currently worth US$2.8 billion and would increase to US$10.4 billion by 2025. There are now 9,043 EdTech startups in India. Factors such as India’s thriving internet economy – 743.19 million internet subscribers – accentuate this trend (as of March 2020). By 2020, India will have around 700 million smartphone users.


Educational Technology Market Size in India (in US$ Billion)

Segment

2020

2025 (Projection)

K-12

US$1.16 billion

US$4.3 billion

Test preparation

US$0.8 billion

US$3.99 billion

Online Certifications

US$0.58 billion

US$1.38 billion

Skill development

US$0.26 billion

US$0.73 billion

Total

US$2.8 billion

US$10.4 billion


The Digital Learning Industry in India Is Organized Into Numerous Segments, Each With Its Own Set of Players


The segments that comprise India’s digital learning market include K-12, test preparation, online certification, skill development, and enterprise solution. A large addressable market, convenience, price advantage, and pandemic-driven disruptions are all major growth drivers for these segments, aided by constantly expanding technological capabilities.


K-12: With over 250 million kids enrolled, India’s largest and most attractive market for digital learning providers in the K-12 category. This e-learning market includes sub-segments such as intelligent class solutions, online tutoring, online test preparation, simulation, and virtual reality, STEM learning, AR and robots, and evaluation. Some of the most significant Indian players in this field include Cuemath, STEPapp, Whitehat Jr, and CampK12.


Test Preparation: Another emerging Edtech industry that has grown in recent years is test preparation. Many users use these platforms to prepare for competitive exams such as JEE, NEET, CAT, IAS, GRE, and GMAT. This is primarily due to the platforms’ ease of use and low cost. As a result, companies such as Career Launcher and T.I.M.E and renowned B-schools such as IIM-Ahmedabad and IIM-Kozhikode have begun to provide hybrid courses in the test preparation space (a mix of online and offline learning). The key players in this market are Byju’s, Unacademy, Vedantu, Toppr, Embibe, and Gradeup.


Online certification: One of the main reasons for the popularity of online professional education is its employability. Professionals can advance their careers by enrolling in big data, project management, mobile app development, cloud computing, and digital marketing. Coursera, upGrad, Eruditus, Simplilearn, Jigsaw Academy, and other major Indian players in this field include Coursera, upGrad, Eruditus, Simplilearn, Jigsaw Academy, and others.


Skill development: Edtech companies enable gig economy workers and entry-level technology professionals to acquire, upskill, and reskill their skills more quickly. Engineers and software developers are also updated on the most recent and frequently utilized technologies. Key players in this field include Disprz, InterviewBit, Quizizz, Edureka, and Crio. Do.


Enterprise solution: Companies are integrating such solutions to be viable in a pandemic world, and this segment has grown the most. Key market companies in this arena include Liqvid, Classplus, Foradian, Schoolguru, Byndr, and others.


Key Drivers of Edtech Sub-Segments in India

Sub-segments of Edtech in India

Growth drivers

Test preparation

Large addressable market

Price advantage over offline counterparts

Availability of known players

Online certification

Partnerships with known universities/colleges

Convenience and popularity among working professionals

K-12

Parents’ propensity to pay

Price advantage over offline counterparts

Increasing competitiveness among children

Skill development

Convenience

Growing interest in upskilling

Price advantage

Enterprise solution

Need for online product offerings

Requirement of remote workplace management tools


Trends in the Indian Edtech Industry


Before the Covid-related disruptions, the Edtech sector was quickly expanding worldwide, with near-instantaneous adoption of digital tools in the education sector. In actuality, three Indian EdTech companies (Eruditus, upGrad, and Vedantu) grew due to the Covid-linked Edutech boom, bringing the total unicorn tally to five (after BYJU and Unacademy).


With new Covid-19 strains emerging at an increasing rate and no clear indication of when normalcy will be restored, e-learning activities will become the default option for disease management, convenience, and cost savings.


Massive Growth in the number of users


EdTech companies such as Vedantu and Byju’s (tutoring), Toppr (learning), and Unacademy (video classes) reported a considerable rise in traffic share during the pandemic-caused lockdowns. In addition, screen time on education apps on smartphones has grown by 30% since the shutdown.


According to reports, BYJU added over 33 million members to its platform, raising its total to 75 million, while Unacademy’s user base climbed to 40 million by January 2021. Toppr’s paid user base has also increased by 100%. In addition, screen time for online learning has increased not only for K-12 and post-K-12 pupils but also for professionals, according to the patterns. According to a recent LinkedIn survey, roughly 63% of professionals have increased their time spent on online learning to better or reskill themselves to stay relevant.


In conjunction with the Central Board of Secondary Education (CBSE), Facebook will release a recognized curriculum on digital safety and online well-being, as well as augmented reality, in 2020. The augmented realit y(AR) curriculum was created in partnership with the Startup Village Collective Digital Learning Platform in Bengaluru.


Regular Courses with Value-Added Services


In addition to standard courses, more platforms are innovating to provide specialized goods to their target audience by offering value-added courses such as group discussions, real-world projects, career counseling sessions, and internships, among other things. To gain momentum, premium institutions also provide more complex capabilities to customers, such as customized dashboards, reliable performance tracking, and talent mapping.


E-learning Gamification Process 


Improved user interfaces are being employed to provide consumers with an immersive learning experience, assuring more information acquisition. Trends like concept simulation, level advancement badges, and incentive-based learning increase user engagement on Edtech platforms like BYJU’s and Cuemath.


For example, during a practice test round, the BYJU app may ask, “Hey, did you answer that question a touch too quickly?” to measure a student’s learning style. The possibilities include sending students on an “adventurous journey to uncover the correct answers to questions” and supplying them with “lifelines” during examinations.


Patterns of investment in the Indian Edtech sector


Along with China and the United States, India is one of the most important markets for global venture capital investment in education. According to sources, since the Covid-19 pandemic began, India’s education sector has received around INR 300 billion (US$4.04 billion) in funding. According to Tracxn data, edtech companies got a total of US$3.81 billion in funding between January and August 2021.


BYJU’s, India’s largest Edtech company, received the lion’s share of roughly US$1.7 billion in funding in 2021, followed by Eruditus, which received US$650 million, and upGrad, which received US$185 million. In the same year, Unacademy raised a total of US$440 million, boosting its worth to US$3.44 billion.


In 2021, BYJU completed many acquisitions, including the over $1 billion purchase of Blackstone-backed Aakash Educational Services. BYJU’s also paid US$500 million for Epic, an online library for children aged 12 and younger, Great Learning, an online professional and higher education company located in Singapore, and Toppr, an after-school learning platform based in Mumbai.


According to a survey conducted by Inc42 Plus, between 2014 and the first half of 2020, India reported 346 Edtech investment deals totaling US$2.2 billion. Online test preparation companies received approximately 79 % of total financing, followed by online certification 8.4 % and K-12 education 6%


Among the Indian Edtech companies that received significant funding in 2020 were: 

  • Byju’s, Unacademy, Vedantu, Doubtnut, Embibe, and Testbook.com in the test preparation category; 

  • Lido in the k-12 Category; 

  • Coding Ninjas in the online certification category; and

  • Classplus in the enterprise solution category.



Top Edtech Funding Rounds Recorded in H1 2020 in India

Startup

Funding amount (US$ million)

Investor

EdTech sub-segment

Byju’s

US$200 million

Tiger Global, General Atlantic, Bond Capital

Test preparation

Unacademy

US$110 million

Facebook, Sequoia India, Blume Ventures

Test preparation

Vedantu

US$43.3 million

GGV Capital, Legend Capital, Omidyar Network

Test preparation

Doubtnut

US$15 million

Tencent, Omidyar Network, Sequoia India

Test preparation

Embibe

US$12.6 million

Reliance Industries Limited

Test preparation

Testbook.com

US$8.3 million

Iron Pillar

Test preparation

Interview Bit

US$20 million

Sequoia India, Tiger Global, Global Founders Capital

Skill development

Classplus

US$10.7 million

Blume Ventures, Kunal Shah, Alvin Tse

Enterprise solution

Lido

US$10.5 million

BAce Capital, Picus Capital, Madhur Deora

K-12

Coding Ninjas

US$5.2 million

Info Edge

Online certification


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