HOCKEY STICK GROWTH: GROWTH OF EDTECH START-UPS DURING PANDEMIC
According to the report given by BARC India (Broadcast Audience Research Council) and Nielsen (this firm measures the information, data, and market), it has been disclosed that since the lockdown due to the pandemic there has been a 30% rise in the time spent by the students on the education apps.
It is the education sector that has been rising continuously and it is still growing despite the unfortunate circumstances caused by the pandemic. You must have seen that before the outbreak, caused by the Covid, children used to go to school, colleges, and coaching centers and because of the calamity it was being impossible to manage the health of the children and provide uninterrupted education but due to the certain application and online educations platforms, the condition is now improving, people are learning a new way of getting an education. In the present time, India’s Edtech Industry is the world’s second-biggest industry and the speculation is that the industry, in the year 2022, is set to touch $3.2 billion.
By the end of March 2020, orders were given for the lockdown of cities and closing of schools, and an enormous number of students that is 1.5 billion were grounded almost overnight and this situation lead to astonishing adoption and exponential growth of online education and e-learning platforms
What are Edtech Start-ups?
Before we move forward with what factors are affecting the growth of Edtech start-ups, it is necessary to understand what we perceive from the term Edtech. As we can see the term or acronym Edtech is made up of two words, Education and technology and it means providing education with the help of technology, technology here refers to hardware or software. What we can perceive here is that efforts are made with technology to amplify the educational outcome.
Today, we see that to make education easier, approachable, and engaging, various start-ups are using software like virtual reality (a three-dimensional image or environment, with the help of some equipment like a helmet with the screen over the eyes), videos, automation, etc. Online classes, MOOCs (Massive Open Online Course), interactive screens are some instances of Edtech start-ups.
Growth of Edtech Start-up during Pandemic
- Size of the Market: Because of the unexpected surge towards online education, as schools were closed and face-to-face conventional mode of studying was not possible, the prognostication of the market size of the Edtech industry in India by 2022 has seen a considerable increase. A recent report on the Edtech in India has predicted that its market will rise to $3.5 billion by 2022 and the same report earlier predicted the market to rise in the range of $2.8-$3.2 billion. Before the pandemic that is in 2019, the Edtech market size had reached $735 million. With both the data you can see there is a large sum of difference and that pandemic has largely affected the market size of the Edtech industry.
- Change in Funding Level: To determine the growth of Edtech it is necessary to calculate the funding before the pandemic and after the pandemic, to see how Covid brought a change in the education sector of India. It has been ascertained that funding in the first half of 2020 has been increased five times from what has been observed in the first half of 2019. You would be astonished to see the numbers, it is calculated that till August 2020, the total funding was $847 million and it was already two times the total funding collected in the year 2019 and a major portion of the 2020’s funding was raised by Byju’s and Unacademy which collective stood at $300 million. Any many new start-ups naming, Lido, Masai, iNurture, Campk12, Pedagogy, and many more Edtech start-ups have also raised funding during the pandemic period.
- Shifting of Students: Another factor to study is the shifting of students in the pandemic period towards MOOC (Massive Open Online Courses), it was like opening a door to something big, there has been seen a large number of students joining online courses with some famous and developed start-ups like Unacademy, Byju’s, Doubtnut, Coursera and the number of students joining the courses on data science and digital marketing, is continuously increasing every month. The MOOC has been a substantial augmentation post lockdown.
- Fascination of Students: It has been seen that students both from the K12 segment and post K12 are spending more time on the e-learning platforms during the Covid lockdown, and it has observed a 50% in the time spent on these applications. A survey or data has been collected from LinkedIn, which shows that a 63% of the professionals are spending more time on e-learning platforms for enhancing their skills and knowledge.
According to the report given by BARC India (Broadcast Audience Research Council) and Nielsen (this firm measures the information, data, and market), it has been disclosed that since the lockdown due to the pandemic there has been a 30% rise in the time spent by the students on the education apps and this resulted in 120% growth in digital ads given by the Edtech applications. It is also been recorded that there has been an 88% increase in the number of people, who have downloaded the Edtech applications.
- Becoming a Member (Subscription): There is another factor to determine the growth in the Edtech is subscriber base, it means paying some amount of money for availing the services or we can say for using the online courses provided or made available on the Edtech application of a start-up or company. It has been noticed that there has been a notable rise in the subscriber base of the Edtech firms; the users for the K12 division have significantly increased from 45 million to 90 million. Let us study the data of some grown and developed start-ups like Byju’s and Toppr, Byju’s has added 7.5 million new users during the pandemic and Toppr has enjoyed 100% growth in the paid subscribers.
Hockey stick Growth
As shown in the image, there has been a linear growth for a long period and there is sudden and extremely rapid growth, it is called Hockey stick growth. The term is usually used in those conditions when a start-up has been growing but its growth was too slow, then suddenly conditions changes and start-up finds its much-needed market.
The growth of Edtech start-ups in the pandemic shows the same conditions as this curve. Before the pandemic Edtech start-ups were there, they were growing but too slow, but during Covid, there has been an exponential growth in the Edtech start-ups which is unimaginable.
Start-ups that managed the Hockey-stick Growth
Research shows that after the 12 months of a pandemic it has been seen that e-learning platforms or Edtech firms have not only surpassed the market, funding, subscriber base, and time spent by the students on the Edtech applications but also topped Twitter trends and Google searches.
It has also been realized that the number of Edtech searches on Google has also increased by 60% the reason could be that students are desperate, they need some type of education to fill the gap which has been created due to the lockdown, and another reason being the creativity and different modern trends that are being used by the e-learning platforms, which attract the students. For some companies like Byju’s, Vedantu, Toppr, and others, the number of searches of these companies has increased even further.
There are more than 3,500 edtech start-ups today and it has been projected by the HRD Ministry that, expenditure for India’s edtech industry would reach $10 trillion by 2030.
Despite the Growth, Challenges faced by the Edtech start-ups today
- Unwillingness towards Change: Traditional mode of providing education, that is face to face, is ancient, in an early period some Gurus provided Shiksha of Indian religions, Indian mathematics, in the Lord Rama’s and Krishna’s time and at the ancient Takshshila, from that time to this day, we preferred the conventional mode of teaching. Where on one hand our teaching method required innovation and up-gradation so that learning can become comfortable for both teachers and students, but on the other hand, both the administration and teachers are reluctant to adopt e-learning, for them using e-learning methods is a means to an end in the corona period, they are still waiting to start their old preferred method of teaching after the pandemic.
- Poor accessibility and inadequate digital infrastructure: Though we are growing and developing, here the keyword is developing, not developed, there still is a gap between the growth and users who can avail the benefit of this growth. Yes, it is true that in the pandemic period, there has been an unseen growth in the Edtech industry and many Edtech start-ups are surfacing but there are still many students residing in villages and those who are below the poverty line and the economically weaker section of India, still facing the problems of low network, unavailability of smartphones and high internet charges, which hinders the growth of students because of coronavirus, as they can go to school and colleges.
- High Customer acquisition cost: The early-stage Edtech start-ups face the challenge of providing their content at low cost because in the market there are many developed Edtech start-ups, like Byjus, Unacademy, who are 7-10 years old, and to stand in that market is difficult for the early-stage start-ups and they have to spend excessively on the marketing or advertising and this results in making customer acquisition costlier.
There is no denying that there has been a boom in the growth of Edtech start-ups as due to the pandemic and the rising number of ideas for Edtech start-ups, it has managed to attract the interest of the investors. Even in the beginning of 2020, Edtech surfaced as the hot sector evidence being that in a round led by Facebook, Byju and Unacademy had managed to raise $400 million and $ 100 million respectively. For Edtech start-ups, the coronavirus has been proved a blessing reason being is that out of the 14 start-ups, at least 9 have managed to raise seed funding as investors believe that these early-stage ventures can prove their worth in the pandemic.
Yes, it is true that due to the pandemic there has been a spurt in the growth of Edtech start-ups, but due to poor accessibility and inadequate digital infrastructure, the money needed for subscription, different mentalities of online students, acceptance issues, and lack of trust because of some false and misleading Edtech company, Edtech start-ups and sector face many problems and it is necessary that for the better development of the Edtech, the gap caused because of lack of infrastructure need to be filled.
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