Is the Indian edtech sector really ‘disrupting’ the education system

In this article, we have analyzed the Indian edtech market and its overall impact.

Introduction to Indian Edtech Market

2020 has been a roller coaster year. The world is going through one of the worst economic slowdowns ever. The pandemic has created this newfound aggressive urge for digitization which is witnessing an acceleration across all sectors. The education sector couldn’t escape this enthusiasm and has created this new category of education technology or ‘edtech’.

Over the course of the last few years in India, “edtech” has been the buzz word in the startup ecosystem as it is being touted to ‘revolutionize’ the education sector.

In the last five years venture capitalists and investors have been betting on the edtech horse for it to deliver the returns and quite frankly the unimaginable success story of Byjus has given this belief a strong impetus. Between 2014 and 2018, 77% of the total investment in the sector has been just for four startups.

So the question in my mind was whether the edtech boom is just a bubble or is it here to stay and most importantly, will these companies actually transform the way education is imparted in our country.

To answer this, we need to look at the entire journey of edtech as well as the reality of India’s education landscape.

Investment and Market

Venture capital investments in the Indian edtech sector were close to $998 million from January to July 2020 that is triple from a year ago – $310 million. So we can safely say that edtech has become the most funded segment this year. Covid has led to an almost 3-5X increase in free users and anywhere between 50-100% growth in a month on month revenues.

Now a keynote here would be that the majority of those investments have gone to only 4 companies – Byjus, Unacademy, Toppr and Vedantu. ‘Classroom of tomorrow’ is the way Byjus has positioned its brand, with technology at the core of learning. 

Sounds aspirational doesn’t it?

However, my argument is if by technology these companies are talking about learning through an app and ‘learning’ the same old syllabus in the same old structure (as it is in a physical classroom), then the question remains, how will that add value to the learning outcome. 

As I write this piece, Byjus has raised another $500 million and has now crossed the $11 billion valuation. 

It will be interesting to see when the pandemic gets over which is expected by the end of next year, how these companies will retain their users, and will the parents see any value in this format. 

This year Byjus also acquired the “learn to code” startup – Whitehat Jr. Both the companies are coming under a lot of fire for their bad workplace culture, their mediocre teaching staff, and negative marketing campaigns. 

The messaging and communication of Whitehat Jr’s marketing campaign which talks about kids can suddenly get jobs at Google or speak at Ted conventions and the world will be at their feet, did not really go too well. Some of their ads had to be taken off after ASCI (Advertising Standard Council of India) banned them due to their false messaging.

This was a classical example of going on an ‘aspirational overdrive’ in communication where even the consumer feels that their intelligence is being taken for a ride. A lesson for all the marketers out there.

Let’s try to understand the market scenario-

A report published by RedSeer and Omidyar Network India has revealed that edtech user base – both free unique and paid users – in the K12 and post K-12 categories have doubled from 45 to 90 million in this year

Another critical insight from the report was a 40% increase in the customer willingness to pay and a huge jump of 83% in the number of paid users.

According to the report edtech is expected to increase its offerings across class 1 to 12 by 6.3 times creating a $ 1.7 billion market by 2022. The post-K12 market is also expected to increase by 3.7 times and touch $1.8 billion by 2022.

The Indian Reality

From an investment point of view, from 2014 to 2018, according to Inc42DataLabs, 66% of the total funding received by edtech startups ($1.12 billion) was just for a single company — BYJU’s. If you add the other three companies – Vedantu, Unacademy and Toppr the number goes up to 77%. 

So essentially, the investment has been highly skewed in the favor of a handful of companies in a space that has more than 3000 startups.

In India, people still require conventional education degrees and certifications. Furthermore, if we look at the business models of these companies, they just seem to be replacing the traditional coaching classes rather than making any dent on the overall understanding of education and learning. 

Every Year ASER(Annual Status of Education Report) publishes a report on the overall education and learning landscape of the country. This report has been a very thorough indication on the learning status of our country for the past few years.

Some of the highlights from the report published in January 2020 are as follows-

• Out of the total children surveyed in 26 districts only 16% in Class 1 were able to read the text at the prescribed level. 40% of the kids couldn’t even recognize the letters.

• In the 4-8 age group at least 25% of school kids did not have age-appropriate numeracy and cognitive skills. 

• Another critical area to note here is that we are talking about our country where over 60% of our population is coming from rural districts and small towns and not from the urban centers.

• Out of the districts surveyed almost 50% of the 5 year olds and a 25% of the 4 year olds are from anganwadis and these kids have far lower cognitive and foundational abilities than their counterparts.

Now let’s look at where we stand globally in terms of our learning, 

• According to the 2020 global prosperity index, India ranks 101 out of 167 countries in overall prosperity down seven places from 2018. 

• According to the same index, India ranks 115th out of 167 countries in education down by 11 places since 2018 when it was 104th. This shows that our system is definitely not improving.

• Another important benchmark is that India ranks 115th in the health index. According to the latest human capital index published by the world bank India ranks 116th out of 174 countries and dropped by one position from last year out of 157 countries.

• The purpose of this index is to provide an indication of the skills, knowledge, and health that people build over their lives, that enables them to grasp their potential as constructive members of society.

I still remember that famous statement by Nobel prize winner Amartya Sen “India is the only country which is trying to become an economic power with an unhealthy and uneducated labour force.” 

This was back in 2015, has anything changed in five years? Well, we have enough data to make that judgement.

COVID Impact on Indian Edtech Sector

The pandemic has created more disparity in the education and learning outcomes of children especially in children belonging to the economically weaker sections of the society. 

The recent buzz around online education has distracted many so-called intellectuals from certain realities.

A recent study conducted by CRY foundation post lockdown in four southern states mentioned that 94% of the kids did not have access to smartphones or the internet. This study covered 5,987 children in Telangana,  Andhra Pradesh, Tamil Nadu, and Karnataka.

Another study that was conducted by the Smile foundation in 23 states (Haryana, Uttar Pradesh,Telangana, Andhra Pradesh,West Bengal, Tamil Nadu, Karnataka, Maharashtra, Delhi, and Gujarat) surveying 42,831 children mentioned that over 56% of children did not have access to smartphones.

In August of this year, UNICEF released the Remote Learning Reachability report which highlighted the big gap in the education sector. 

The report mentioned that only 24% of Indian households have access to the internet which shows the large rural-urban divide. The report also talks about girls having been the most affected in the rural and marginalised communities.

The report also suggests that digital education is definitely not going to solve the disruption caused by the pandemic and we need blended approaches where community workers, volunteers and parents need to work together and support learning. 

The Indian Education Approach

Companies like Byjus and Whitehat Jr are playing on the age-old insecurity emotion of Indian parents which is basically about being a part of the “rat race” or as I call it “The rat race mentality”. 

Traditionally, Indian middle class parents(who are the target audience of these edtech companies) have always wanted their kids to be the “first in class” or to get “99.99%” and anything that will help them achieve this goal will be a means to an end. 

I believe this has been the primary reason why we as a country have not been able to make progress at a global level. 

Society as a whole kills the curiosity of a child at a very innocent age and makes him/her be part of the “assembly line” and create conformist individuals

This is what most of the edtech companies are banking on,”fear of missing out” in the never-ending rat race and make children feel outcasts if they do not participate. 

This insecurity or the feeling of low self-esteem is created not only in the parents’ mind but also in the naive minds of the kids who might see their friends learning to code, and would want to do the same so that they don’t feel left out. 

True Education  

Educating oneself is a never-ending process, formal education will always have its limitations, however, it should enable children to have a strong foundation.

We need our kids to be curious instead of killing their capacity to understand concepts and push them through an information overload. We need to encourage original thought, creativity, and build a problem-solving attitude.

Freedom of inquiry is one of the basic qualities of human beings that has allowed us to evolve over thousands of years and help us better understand our place in this universe.

We as a country need to evolve our mindset and empower our children by making them question everything and focus on the process, not on the outcomes.

Our education system needs to grow out of the traditional ranks and focus on the learning capabilities, understanding of concepts and developing new skills. 

At present, our education infrastructure is not enabling our children to evolve and shape their personalities. 

Will the edtech companies be the answer to filling this gap? Well it doesn’t seem that way

As the schools will start to reopen, will these edtech companies still witness the same amount of traction?    Or 

When kids are more free to go outside and play with their friends which is one of the most important aspects of growing up, will they still have the time to go for these classes online and learn anything of value? 

If edtech companies really want to have a deeper impact on the future of our next generations then they might reevaluate their priorities in terms of their learning models and the quality of teachers.

In addition, there needs to be some kind of enablement at a policy level from the government to make systemic changes and ensure that alternative learning is more impactful.

This can also lead to the inclusion of the various socio-economic sections resulting in widening of the market size and creating new avenues for these companies. 

Read More: One Key Reason That Made Zoom Very Successful

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