Overview - Indian EdTech Industry
The Indian EdTech industry was valued at US$ 750 million in 2020 and is expected to reach US$ 4 billion by 2025 at a CAGR of 39.77%. This growth is driven by rising demand for non-academic courses from tier II & III cities and the need for personalisation in the EdTech space. Out of the projected market value of US$ 4 billion, US$ 1.5 billion will focus on K–12 (Kindergarten to Class 12), after school foundational and pre-preparational courses.
EdTech funding focused on start-ups
Indian EdTech start-ups raised more than US$ 1.43 billion across 100 deals in 2020. The COVID-19 pandemic disruptions and subsequent lockdowns compelled both parents and educational institutions to implement tech-enabled learning solutions, making EdTech the most funded sector in the country. Of the total funding raised, Byju’s leads with 57%, followed by Unacademy (10.5%) and Vedantu (9.5%).
Since 2020, India has seen four EdTech start-ups turn into unicorns (Unacademy, UpGrad, and Eruditus and Vedantu) and one into a decacorn (Byju’s). A unicorn is a company valued over US$ 1 billion and decacorn is valued >US$ 10 billion.
Gamification and rise of edutainment
Gamification has gained popularity among EdTech start-ups. Companies such as Toppr, PlayAblo, Cuemath and Byju’s have introduced learning through games and puzzles that make it easier and fun for students to understand concepts. Similarly, companies such as Kiddopia, Kutuki Kids Learning, TinyTapps, Enguru and Lido Learning have taken steps to make education more interesting with interactive videos and music. For instance, according to a study, over 70% students stated that gamified courses are more motivating than traditional ones.
A hybrid EdTech industry
According to experts, players in the EdTech segment are expected to adopt a hybrid channel approach in the future. Online players are trying to establish offline touchpoints for students. For instance, EdTech decacorn Byju’s has piloted Byju’s Learning Centre, a new hybrid model, allowing students to visit offline education centres for classes.
Exponential growth of internet penetration in India
According to the IAMAI-Kantar ICUBE 2020 report, India had 622 million active internet users in 2020. This number is expected to increase by 45% to reach 900 million by 2025, due to higher adoption rates in rural India. Small towns in India account for two out of five active internet users in the country. Urban population comprises 67% of active internet users.
According to the Annual Status of Education Report (ASER) 2020, smartphone ownership among government school student families increased from 30% in 2018 to 56% in 2020, whereas smartphone ownership among private school student families rose from 50% to 74%.
Government initiatives driving the Indian EdTech industry
The Indian EdTech industry is expected to be more policy friendly in the upcoming years due to rising government interest. The National Education Policy 2020 emphasised the importance of leveraging technology in education solutions and supported creation of leaning content in regional languages, calling it a high priority.
K–12 category has potential to grow in the future
The EdTech industry in India is growing at a significant rate, with high interest in the K–12 segment as COVID-19 lockdowns have disrupted the activities of educational institutions. According to Tracxn, a data analytics company, Indian EdTech firms have raised US$ 5.77 billion in funding in 2021 so far. Of the total amount raised, US$ 99 million was raised by K–12 education specialists. Since 2018, more than 4,800 K–12 EdTech start-ups have been launched globally, with 1,782 start-ups in India alone. They offer courses in the form of subscription packages for a set of subjects to each class.
Adoption of advanced technologies such as artificial intelligence (AI), machine learning (ML), AR and VR will not replace teachers in the classroom, but will empower teachers with valuable tools and platforms to ensure effective in-class learning.
Jan – October 2021
Teachmint, a start-up that helps teachers and institutions create their own virtual classrooms, raised US$ 78 million in a Series B funding. The new round of funding values the company at US$ 500 million.
Byju’s acquired three major companies:
EdTech start-up Classplus raised US$ 65 million in a Series C round led by Tiger Global Management.
UpGrad is an online higher education company. It offers over 100 courses in collaboration with global universities. It raised US$ 120 million from Temasek.
Doubtnut, a K–12 EdTech platform, has raised approximately US$ 30 million from SIG Global and Lupa Systems. Existing investors Sequoia Capital India, Omidyar Network India and Waterbridge Ventures also participated in the Series B round.
Key Players in the Indian EdTech Industry
The Road Ahead…
Investors are interested in EdTech start-ups as they quickly adapt to advanced technologies and provide a high return on investment. The demand for EdTech firms among students and parents is increasing as the post-pandemic situation continues to boost the need for remote learning. The Government of India (GOI) has announced various plans and systematic changes to improve the EdTech industry and enhance the remote learning experience for students. For instance, in May 2020, the GOI announced PM e-VIDYA, allowing the top 100 universities in the country to start online courses. Thus, the National Education Policy 2020, accessibility to education and teachers, demand for upskilling and remote learning will accelerate growth of the Indian EdTech industry.