Imagine yourself sitting in the class while your teacher is explaining an important topic. While all other students are moving their heads in unison, you are feeling a bit offbeat as you are unable to understand anything. This situation is something which every student must have experienced at least once in their learning tenure. Each student has their own learning pace and grasping power. Also, it is practically impossible for a single teacher to maintain a track of each student in the class in the usual manual way. Thankfully, the edtech sector has emerged in recent years for our rescue and filled this gap.
Educational technology, commonly referred to as edtech, facilitates learning through the combined use of hardware, software, and educational theory and practice. It provides a holistic learning environment. Innovators globally have realized the immense opportunities inherent in the education sector and invested billions of dollars in it.
The edtech industry has witnessed exponential growth in the past few months. The closure of educational institutes amid the Covid-19 pandemic introduced one of the prominent trends in the edtech industry i.e., Distance learning. Learning took place via digital platforms.
India witnessed the initial signs of edtech growth approximately 10-15 years ago when smart class and Enterprise Resource Planning software (ERP) was extensively added to impart education in physical classrooms. The demand for online learning platforms also increased when the ‘coaching centres’ for competitive examinations came up with similar offerings in the forms of live video sessions, mentor feedback, recorded lectures etc. From then to now, there are more than 5000 edtech startups presently operating in India across various segments such as – test preparation, online certification, and STEAM kit and enterprise solutions. When all the other sectors witnessed a significant decline during these turbulent times, the edtech sector was the only sector which showed considerable growth. Indian EdTech startups attracted a huge amount of funding and demonstrated the most unimaginable valuations. One name that emerged as the favourite among other Edtech Companies was BYJU’S -The Learning App. During March and April 2020, the lockdown, the app was among the top 10 apps downloaded, and over 13 million new students joined its courses.
BYJU’S – is an education tutoring app which operates on a freemium model, under which it provides free access to its content for 15 days after registration. Founded in 2011 by Byju Raveendran and Divya Gokulnath, the company launched its platform in 2015 and now has an estimated 65 Mn students cumulatively learning from the app. Out of these, an estimated 4.3 Mn have subscribed to paid annual subscriptions, with approximately 87% renewing it on annual basis. It provides educational content for classes 1-12 in the form of 15-25 minutes digital animation videos and provides training to students for premier examinations in India like IIT-JEE, NEET, CAT, IAS, and international examinations such as GRE and GMAT.
The application allows both the students and parents to track their performance statistics in real-time. Mock tests are conducted to evaluate a student’s performance which helps in strengthening the basics of young learners and lays a foundation for education. Along with providing an overall offering, BYJU’s focuses on providing more opportunities to women by building next-generation teachers. This emphasis on developing the whole human is the foundation of Byju’s business growth plan.
The success of the app can be measured along two verticals, firstly, the substantial amount of time spent by students on video for learning due to engaging content that motivated parents to opt for annual subscriptions and the second, when users get retained over the years with annual renewals.
Exit Strategies in a Startup ecosystem:
In a startup ecosystem, Initial Public Offering (IPO) and merger and acquisitions (M&A) are two of the most prominent exit strategies adopted. Globally very few edtech companies have taken the IPO route. On the other hand, the M&A strategy helps edtech startups acquire competitors and their proficiencies, which helps in gaining an upper edge in the market.
With the exponential growth seen during the previous years in the Edtech sector and the potential for further growth in the coming years, consolidation within the industry is possible, with companies finding technology, talent, and offerings complementary to each other. Another ideal and easy way for an Indian edtech company to exit the sector can be to get acquired by a global education company.
Some of the smaller edtech startups, which had seen a sudden high growth in users and revenues during the Covid-19 pandemic, used this opportunity to look for an option to exit the sector and exercised it as and when the opportunity was available. The growth in revenue and the users helped many edtech startups get a better valuation and deal during the acquisition by large companies. These acquisitions of smaller companies were an opportunity for consolidation and increasing the bouquet of services for larger companies. This global expansion of EdTech presents platforms with an ever-expanding opportunity to help create long-term change for years to come.
With so many investors bringing in seed capital into edtech companies like Byju’s and consolidation of edtech players through mergers and acquisitions as seen in the case of Byju’s’ we can rightly say that the growth of edtech companies will reach new heights in the coming years.
To recapitulate, Edtech enterprises have a few advantages as well as disadvantages as noticed during this pandemic period and possibly the one following.
The Trump Cards:
There are millions of users of online learning applications and other forms of Edtech, such as e-books, ERPs etc. which has reduced the timelines to accomplish a task, thus resulting in cost savings.
Videos, simulations and e-books make the learning process more engaging. There has been a shift from the concept of rote learning to practical-based learning and development. Students get the opportunity to explore more deeply into their areas of interest which helps in the growth of their talents as well. Hence, they can update and enhance their skills with the learning trends and acquire new skills.
It gives students the flexibility to learn the content at their learning pace, from the comfort of their homes. The platforms provide insights into students’ performance and help teachers modify the lessons accordingly. The introduction of digital books has made study materials more accessible to low-income families while also aiding in the reduction of deforestation, which is one of the primary environmental issues.
The use of technology is reducing the overall development and problem-solving skills of the students. There has been constant development in software and applications, but with the requirement of upgraded hardware for the development and run of the applications, the cost of upgrading or maintaining devices is becoming very high.
With the advent of technology, the role of the teacher as an authority figure, a guide or mediator is slowly fading away. The online tests allow students to cheat during the examinations making it difficult for the teacher to assess the student’s knowledge of the lesson.
However, these disadvantages should not be perceived as a signal to return to the traditional education system, but instead should be viewed as an opportunity to assess the loopholes in the technology and the methods of education and to mitigate these so that the quality of teaching both in the digital and traditional classrooms.
The emergence of the Edtech industry represents a massive opportunity for both established businesses and startups. With hybrid learning models becoming a new normal in the post-pandemic world, digital penetration in the field of education is expected to reach a CAGR of 4.4% by 2025. Despite the reopening of educational facilities, online education is anticipated to continue and expand.