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The Golden Era of Edtech has Just Begun

Updated: Feb 20

A startup comes into existence for 2 main reasons: It’s either tech capabilities that can help accomplish a task with much added convenience or it’s the existing way of doing things that has just too many flaws. In the education space there is a little bit of both:

  • About the convenience: Since the beginning of time, humans have been going to the school for intake of education. However, since tech is bringing everything else right to our doorstep, there is no reason why education should not come too.

  • About the flaws: Well, you know it better. Here are some interesting numbers: - According to the annual status of education report (ASER), Between ‘08 & ‘18, Percentage of 5th standard students being able to solve a simple arithmetic division problem has declined from 47% to 34% in Private Schools and from 40% to 23% in Govt. Schools. - The education system naturally becomes responsible for the rising unemployable job seekers. An analysis by DataLabs reveals 38% of the Indian IT job applicants were unable to write a single compile-able code (USA comparable: 4%).

Resultant: Edtech has broadly been shaped into the following core sub-sectors:

  • Test Preparation: let’s admit it, lounge pants bring in that extra level of calm while giving that extra level mock tests.

  • Online certification: delivering at work and continuing to learn from home hasn’t been easier.

  • Skill Development: Increasing the employability of the incomplete products of the traditional education system is the need of the hour.

  • Online Discovery: NO STUDENT in this universe likes to visit the school admin office. Thank you, techies, for helping to shift the admin to online.

  • STEAM (Science, Technology, Engineering, Arts and Mathematics) Education: STEAM sums up all the subjects that have been dented by the rote learning methodology of the traditional schooling system. Even the innovative spirit of teachers has largely been subdued within the boundaries of conventional curriculums.

  • B2B solutions such as learning management systems and coaching class management apps: Let’s admit it, our teachers deserve convenience much more than we do. It’s high time that Tech is used to enable the teachers to make much more impact in the same 24 hours (Teachers are teachers 24*7).

So how good has their run been? Here are the numbers for some perspective:

Even though much of this action is dedicated to converting the courses to absolutely free, this mammoth jump in traffic has greatly assisted the startups in making the consumers get acclimated to online learning at a time when they did not have a choice.

Sneak peak: Byju’s and Vedantu, who are big time into Test Prep added 6 Mn and 100K users respectively, within a week into the lockdown.

Way forward?

According to the Economic Survey 2017-18, the income elasticity on education is estimated at 0.93 compared to 1.95 in health and 1.44 in clothing and footwear. Which means that even if a family’s income reduces amidst this economic slowdown, the expense on education is less likely to go down and with little scope of offline teaching resuming any time soon, Online Learning is bound to flourish. The free trial phase is over and the Edtechs are now headed full swing towards encashing the new consumers.

Further beyond?

According to a 2017 analysis by KPMG, Edtech sector is expected to grow to $1.96 Bn and around 9.6 million paid users by 2021 from $247 Mn and around 1.6 million paid users in 2016 (Pandemic will further pump up the numbers).

The hurdle: As per DataLabs, the average ask from paid customers is INR 10,000 p.a. by Byju’s and INR 23,000 p.a. by Toppr. Therefore only 5% (boils down to 12Mn paid users) of the present addressable population has the purchasing power to afford Online Education.

Even though Edtech will sustain through unique content and pedagogy, their growth will be significantly dependent on the macro economic factors like Disposable Income, Internet Penetration, Smartphone user base, Government’s digital initiatives and most importantly, Government’s education reforms.


This article is a part of the August'20 edition of our Startup Newsletter. Here's the complete publication:


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