Indian Edtechs to witness bubble burst as schools and colleges return to normalcy

EdTechs now stand to revolutionize the existing education structure. The use of AR, VR, and AI technologies contributing to the effectiveness of learning but makes it more accessible. Edtech companies are bringing learning experience for students in schools, technology-driven learning apps are using gaming elements such as point-scoring, interaction with others, personalization, and data-driven insights to enhance the learning process for students and sharpen their basics in various subjects. These apps are known for their features that enable students to perform better in classrooms. Indian edtech startups have emerged as the third most-funded sector in 2021, with capital infusion of $4.7 billion. Now as India reopens amid 'hybrid normal' and schools and colleges return to normalcy, edtech platforms see a significant dip in the demand for online learning and some of such firms have either shut shops or fired employees in recent days. Edtech startups are emerging as a major business industry in India and the edtech market is expected to reach $4 billion by 2025. The advent of EdTech has abetted accessibility and greater reach via the internet. The emergence of various e-learning portals has come into existence to tackle the shortcomings caused by the pandemic, further creating newer avenues for learners all across the nation. The fact is, Offline learning is not going away anytime soon. In fact, online complements offline really well, and together as a package, the omnichannel model is going to steer and be here for a long period of time.

The last two years were golden time for the Indian edtech industry. But every good thing comes to an end, especially after the children are going back to schools, colleges etc. Secondly, increasing screen time has led to many health issues and many on-line e-commerce and gaming companies have targeted these students by knowing the user habits through Cookies/IP tracking, and then made user become cyber victim by the cyber crooks.

As per a survey by the Ministry of Education, 80% students found remote learning ‘burdensome’ and also missed their peers. Experts say, that edtech firms will find it challenging to sustain the pace of growth it achieved over the last two years especially with high customer acquisition cost and expensive offering. A subject matter expert quotes, business no longer made sense in the offline world, customer acquisition cost become very expensive. We had enough capital, but post-pandemic lots of parents started asking for refunds, and kids did not have time as schools opened up. What we see the data points, the first casualty of a truncating business and lower funding is employees. Edtech unicorns Unacademy and Vendatu have already laid off 1,200 employees to increase their runway. To brace the impact, India’s biggest edtech companies — Byju’s, Unacademy and Vedantu — have turned their attention offline. Byju’s acquired Akash Institutes with 250+ coaching centers in India in 2021 and the company also plans to launch 500 offline tuition centers. Another expert says, the external environment may be tough due to the Russia-Ukraine war, impending recession fear and Fed rate interest hikes that have led to inflationary pressures. “Given this environment, capital will be scarce in upcoming quarters. The ed-tech industry’s future in a post-Covid-19 world will be a combination of online and offline, with the omnichannel model being sustainable going forward.

S Mohini Ratna, Editor, VARINDIA