The Ed-Tech industry in India has been going through three major push backs including resistance from schools, the lack of trust in online education and the reach of internet and communication devices such as computers, tablets and mobile phones. Covid-19 served as a catalyst in resolving these concerns. The outbreak encouraged schools and other educational institutions to embrace technological solutions, writes Praveen Parameswar

Covid-19 has taken the country off-guard and is seen impacting the Indian economy. As per the Moody’s report published in June 2020, India’s GDP is expected to shrink by 3.1%. Going one step further, the Dun and Bradstreet Report released in August 2020 predicted that the GDP would contract by 4.5% this fiscal year. Amidst these daunting numbers, one industry that is still reflecting a ray of hope while showing unprecedented growth in India is the Education Technology, that is, the Ed-Tech sector. RS Components, analysing the Crunchbase data, observes that other than the USA, India is the second country that hosts the most number of Ed-Tech companies in the world.

In 2020, Ed-Tech stands as the most funded business sector in India. Only between January and July $998 Mn has been invested across 31 deals. Furthermore, the ed-tech sector, according to the Omidyar, Redseer report, 2020, is expected to touch a size of $3.5 Bn by 2022.

To understand the inner working of this sector and map its growth, let us delve deeper and analyse the current scenario along with the latest trends, impact, opportunities, possible pitfalls and the way ahead for the Ed-Tech industry.

Indian Ed-Tech industry; Growth and Investment

The umbrella term of ‘Ed-Tech’ largely consists of five segments, which include Online Teaching and Test Preparation; Assessment, Guidance and Mentoring;  Skill Development and Certification; Professional Development Programmes, Infrastructural and Administrative Solutions. Amongst these segments, Online Teaching and Test Preparation leads the market with a 64% share and further anticipating size of $515 Mn by 2021. The sector is lately experiencing a boom as it alchemises with artificial intelligence and neuroscience

The growth of Ed-Tech in India started around 2004-05 when ventures such as Everonn, NIIT and Educomp made their mark through digital course content, smart classrooms and skill development programs. The industry has been reaching new heights with 3000 companies, including Byju’s, Unacademy etc. along with various investors like Tiger Global, General Atlantic, Steadview Capital, GGV Capital, Foundation Holding, Aarin Capital, Simplilearn and Blume Ventures venturing into this landscape.

Impact of COVID-19

The Ed-Tech industry in India has been going through three major push backs including resistance from schools, the lack of trust on online education and the reach of internet and communication devices such as computers, tablets and mobile phones. Covid-19 served as a catalyst in resolving these concerns. The outbreak encouraged schools and other educational institutions to embrace technological solutions. In addition to this, it also influenced offline institutions to collaborate with companies such as Embibe and Simplilearn.

Not just this, parents are also trying to adapt to the new normal and subscribing to educational help platforms such as Byjus or Toppr or Global Shiksha, Khan Academy and others. People are going an extra mile to adapt to the Ed-Tech culture and connecting internet, mobile phones, TV, computers and tablets more to learning.

The benefit common people enjoy from the growth of Ed-Tech

The growth of technology in the education sector is, in fact, impacting lives of millions majorly in five different ways:

• Many of the top-notch teachers, courses and institutions were only accessible for people who live in the city. But technology dilutes the geographical borders. Today, a person sitting 200 kilometres away from a city like Bangalore or Mumbai or Thiruvananthapuram or Lucknow would get easy access to high-class lectures and tutorials.
• Platforms such as Unacademy and Upgrad are helping people to learn/get certified/professionally qualified even along with the job they do. This helps more people to up-skill them without moving out of jobs.
• Technology in the coming years shall make education accessible for more people who are not able to afford fees at schools or colleges. This would also help the government to provide education to children and adults without much capital investment in high rise buildings and infrastructure, leading to the real democratisation of education in India.
• Assessments, guidance and mentoring are some of the areas that have to consider multiple data points at the same point. Most of the time these aspects go wrong in education as it is humanly impossible to consider multiple variables together. High profile technology is, in fact, solving this problem to a large extent. This would make assessments, guidance and mentoring people easier and more accurate, thus the right people would reach the right places in life.
• Another major impact of Ed-Tech in the life of common people is that education becomes more effective through visual aids, augmented reality, virtual reality and videos with meaningful graphics. This will help children and adults to comprehend the conceptual level of knowledge rather than mugging up as used to happen during the early days.

Current trends in the Ed-Tech industry

The current trends in the Ed-Tech industry in Indian can be presented through the following four points:

•  The growth of Ed-Tech in India is not a linear or organised graph. It becomes extremely dynamic in nature. Thus only companies who are really agile, open to change and vibrant can sustain in the market.
•  Early entrants to the market who could raise considerable capital, such as Byjus, increased the quality of content, visual treatment and sophistication of technology to a very high level. This demands any new entrant to match the high standards of their products, in order to satisfy the customers.
•  Ed-Tech being a very large and broad industry with too many areas to address, a collaboration between non-competing players is becoming a new norm. Assessment companies joining hands with content providers or infrastructure agencies partnering with skill development companies are a few endeavours taking place all across the globe. Organisations have understood the power of co-creation of success.
•  The New Education Policy (NEP-2020) sets the tone perfectly for the intervention of technology in education. This would enable the Ed-Tech industry to make India globally competitive.

Future avenues for Start-ups

The significant areas where new startups can work on and create new horizons of growth will include the following:

•  Vernacular Languages: 80% of India speaks vernacular languages. The New Education Policy, 2020 (NEP), also emphasises on education through regional languages. In every vertical, ranging right from online tutoring to skills development to assessments, vernacular content is yet to be well addressed. To understand its nature, it is important to note that even a unicorn such as Byjus has not started venturing into the vernacular market yet. Addressing the education requirements through all 22 officials in India would be a great space for start-ups to play.
•  Technological reforms of the 21st century: Even though many companies claim that they use the technologies of the 4th industrial revolution such as artificial intelligence, augmented reality, big data analytics etc., very few companies use them productively, that too on a very small scale. Majority of the brands attempting to amalgamate artificial intelligence in their modules/ approach are yet to tap into its true potential. On the other hand, some companies use augmented and virtual realities mostly to enhance marketability than to manifest its real power. This is where the start-ups can work on and develop cutting edge technology solutions that can power any or all of the 5 segments in the ed-tech industry.
•  Research to blend Technology and Behavior Science: This is an area where research-based startups can pitch their ideas. Currently, a gap that the Ed-Tech industry is coming across includes not having alchemists who can blend technology and behavioural sciences seamlessly. Insightful research is one factor that could help in bridging this gap. Multifunctional teams consisting of technologists, psychologists, sociologists and neurobiologists can identify hundreds of areas that require in-depth attention in the ed-tech domain.
•  Assessments, Guidance and Mentoring: Right people reaching the wrong places causes huge loss. In addition to this, financial loss, lack of happiness, fulfilment, purpose are some vital elements that people largely lack. This can be resolved through addressing assessment, guidance and mentoring techniques in the most appropriate manner. Startups who tap this nerve of the market can become the game changers of the sector while rightly using the modern-day technology and immersive solutions to one’s benefit.
•  Skill Development: National Skill Development Council (NSDC), various Sector Skill Councils (SSCs) and different State Skill Development Missions (SSDMs) are on a mission to bridge India’s skill gap. The speed of change in technology is expected to make more than 48% of jobs obsolete in the next ten years, as observed by the Oxford Martin School study. This makes it inevitable to train every student with the best skillset, thus requiring more players to step forward and up-skill a large proportion of our workforce.

Possible pitfalls for startups

Considering that the Ed-Tech industry is hardly 14 to 15 years old in India, its infancy stage does not enable the newcomers to learn from a plethora of successful cases. Thus, there are a lot of chances that lack of understanding of the market or misjudgment might make startups err. Some of the possible mistakes are listed below.

• Online tutoring and test preparation through video content would be a business with fewer obstacles here and there. Thus many people may just take a deep dive, considering the growth of ed-tech experiences. It is a fact that the market still has space for newcomers. But the incumbents have raised the bar of quality very high. Therefore any person who gets into the market with a couple of lakhs investment on a camera, microphone, a bunch of amateur teachers and a website created out of a template in Envato would not be growing further. If the newcomers overcome the current quality players in the market, it will get easier for the sector to grow.
• Many of the start-ups see a captive market inside schools and with governments. Even though the cost of acquiring customers would be lesser, compared with the direct to customer strategy, time to close a deal would be very long in the B2B or B2G segment. Time and money would be lost if the newcomers wait to close large businesses with governments or large school chains. Thus it is ideal to start with direct access to students and keep B2B or B2G as a parallel track.
• Education is a vertical where human behaviour and mindset carries a lot of significance. Only if technology solutions can consider the behavioural aspects as well, companies can sustain the market. Many players only develop a team consisting of technical experts or some content developers, but miss out on collaborating with behaviour experts. This could serve as one of the common mistakes and should be avoided.
• The pandemic might be serving as a catalyst but it is imperative for us to remember that this scenario would last forever. Education will not travel backwards from the current affinity that it’s built with technology. It’s essential for one to have a plan when thinking about the road ahead for their venture.

The way forward

In India, the education sector is considered as one of the most stable, robust fields with low-income elasticity. According to the Economic Survey (2018), the income elasticity towards the healthcare sector was 1.95, whereas it was 0.93 for products in the education sector.

This scenario, along with the wide acceptance of ed-tech during Covid-19 would certainly lure more investments in this industry. In this case, the intervention of policymakers, influencers, launchpads and mentoring bodies should be focusing on channelising this growth to the right direction by ensuring entry of companies to the appropriate areas, channelising investment to the organisations attending the right requirement and helping ventures with proper hand-holding. We should aim at making India the hub of Education Technology, with the most number of companies, maximum investment and high market size. This not only enhances business in the country but also takes India to the next trajectory of growth. This would be the right time to develop ‘Make in India’ as the most powerful brand in the global ed-tech space.

The writer is CEO, Lifology. Lifology is India’s first career eco-system for parents