The edtech sector has been one of the greatest gainers during the coronavirus pandemic. A report by UNESCO suggests that as of March end, nearly 80 percent of the student population was impacted globally due to school closures. This resulted in students turning to online platforms for uninterrupted classes and lessons.
Earlier in 2017, a report by KPMG and Google titled Online education in India: 2021 projected the market would reach $1.96 billion by 2021. However, the sector has witnessed exponential growth in the last four months, and the numbers have now been revised.
RedSeer and Omidyar Network India recently launched a report mapping the growth of India’s edtech sector. It said that the number of users in the K-12 and post-K-12 segment had doubled from 45 million to 90 million.
Image Credits: Daisy Mahadevan
What’s up with the biggies?
True to these figures, edtech players in the metros recorded massive growth during the coronavirus-led lockdown and the following months.
In an exclusive interview with YourStory, Unacademy’s Co-founder and CEO Gaurav Munjal had revealed that his startup recorded 3x growth in revenue, watch time, and views in April itself. Gaurav went on to make a bold statement:
“The biggest consumer internet company in India will not be an ecommerce company, but an education company.”
In fact, in the midst of the pandemic, where most companies are concerned about the investment thesis of VC firms post-coronavirus, unicorn BYJU’S raised a new round from BOND, taking its valuation to $10.5 billion. The edtech players made content on its learning app free for all students and currently boasts of 58 million registered users.
Unacademy, on the other hand, went on an acquisition spree, acquiring postgraduate PrepLadder, and earlier, programming platform Codechef.
Besides these, Great Learning revealed that its annual revenue shot up by 150 percent as demand for learning courses increased since the lockdown. Vedantu added 6.5 lakh learners since the ‘new normal’, and Lido Learning announced that it had raised $3 million.
While it is all bright and sunny for the edtech players in the metro cities, are their non-metro counterparts observing a similar kind of growth since the lockdown? YourStory explores.
Pivoting to persist
The report by RedSeer and Omidyar Network also suggested that 70 percent of edtech users, that is, over 300 million monthly active users of edtech platforms, are from Tier II towns and cities of the country.
Many startups have pivoted their business models to persist during the pandemic. And while the demand for edtech players is at an all-time high, some of them have added new product lines and services to thrive in these unpredictable times.
Kochi-based ConceptOwl has shifted its focus from content creation to building habits. The IAN-backed startup is launching new products to help people remain focused and increase the completion rate of courses of its users.
Image: ShutterStock
Edtech player Entri, which provides content in regional languages for jobs aspirants, has 130 courses listed on its platform. The startup now plans to add more courses to stay relevant.
EduBrisk, which uses neuroscience-based learning, plans to launch upskilling courses for teachers. According to Founder Saiju Aravind, these courses will focus on neuroscience, data analytics, inclusive and integrated teaching, and artificial intelligence and machine learning-based adaptive teaching and learning. “Data analytics and database intervention will see an upswing,” Saiju says.
Similarly, Jaipur-based Forsk Coding School pivoted its offline coding bootcamp model to go completely digital. Earlier offering 45-day long bootcamps, Forsk now offers short seven-day courses to graduates and academia, ensuring higher completion rate.
The numbers game
EduBrisk, which had 28,000 users pre-COVID, has recorded 3.5x growth post the pandemic. The startup currently has a user base of one lakh students. Its pre-COVID run rate was around Rs 4 crore, and post-COVID it stands at Rs 18 crore to Rs 20 crore.
“We are expected to reach one million users at this run rate, before the next academic year, and are hoping to record 10x growth, with expected revenue of Rs 30 crore,” Founder Saiju Aravind says.
The edtech startup is currently in talks with schools in multiple cities across India and the Middle East. It plans to expand to 5,000-plus schools.
Patna-based Cymatic, which provides interactive virtual classroom services and peer learning to students of Class 8 to 12, has been providing its technology to private schools at less than Rs 150, per student, per month. Founder Kaushik Sharaf said in the last three months, Cymatic has expanded its geographical presence and in May launched its services in the US and Canada.
Cymatic, which initially had only 300 users, now boasts 1,000 users from India, the US, and Canada. The edtech startup recorded Rs 20 lakh in revenue last year and is in line to generate Rs 70 lakh this year, hoping to touch the Rs 1 crore revenue mark.
Kochi-based Entri, which had 1.5 million users in January this year, has now increased its reach to three million users. The startup has almost doubled its revenue since the beginning of the lockdown and its ARR stands at $2 million. “Our revenue has been increasing by 30 percent month on month,” says Mohammed Hisamuddin, Co-founder at Entri.
Saiju, of EduBrisk, also says his startup has recorded a consistent demand for all products and services, since March this year. The availability of quality talent has seen an upsurge, empowering it to expand its team. Since the lockdown, the Kochi-based startup has developed courses for ICSE and State Boards, including Andhra Pradesh, Telangana, and Karnataka.
Image Credits: Daisy Mahadevan
Mixed trends
The economic slowdown led by the pandemic is expected to be worse than the Great Recession of 2008. The effects are already obvious with startups laying off employees and imposing salary cuts.
Rajan Singh, Founder of ConceptOwl, said it has laid off its sales team, consisting of about 20 employees.
But, not everyone is cutting jobs.
EduBrisk offered a 20 percent hike to key performers and weekly performance-linked incentives. Similarly, Cymatic, which initially had its team based out of Patna, is now establishing teams in Ranchi and Deoghar. The startup has hired up to 10 new teachers to cater to the increasing demand.
Entri has also announced salary hikes for its employees, and added 25 new employees to its team, since March 2020.
Investor sentiment
Speaking on the investment thesis behind funding edtech startups beyond the metros, Mahesh Pratapneni of Emerge Ventures, Singapore, told YourStory:
“The big difference is in the marketing. Edtech players in Tier II and Tier III cities are primarily acquiring clients through referrals, while edtech players in metros are doing it through blitzkrieg marketing using movie stars and celebrities. The burn rate of these players is exceedingly high.”
He added that it was important to provide the best product irrespective of the location. But it is more important to empower teachers and students to “use these products to their fullest potential”.
“In these uncertain times we should remember that students are children first. Access to high quality online education that does not torment children but helps them succeed is very critical for their long-term achievements,” Mahesh said.
Emerge Venture Singapore has earlier invested in EduBrisk.
Since the beginning of this year, four edtech startups beyond the metros have raised funding. Entri raised seed funding of $1.4 million in a round led by early-stage investment firm Good Capital. Investors from the US and China had also participated in the round. Co-founder Mohammed revealed that the company planned to raise another $5 million in the next six to nine months.
“It is not difficult to get investments for startups that show good traction and growth. Entri was selected for the Facebook accelerator programme, F-Start, and raised multiple round funding from different investors,” says Saji Gopinath, CEO of Kerala Startup Mission.
Bhopal-based CollegeKhabri, which provides end-to-end college and career counselling, raised an undisclosed amount in an angel round that was led by Vishal Dixit, CEO of educational firm Vdiec Global.
Similarly, Ahmedabad-based Pedagogy raised $400,000 in a round led by Inflection Point Ventures. Most recently, Chembur-based Sai Estate Management and Skills Institute (SEMSI) raised an undisclosed amount from entrepreneur and actor Suniel Shetty.
EduBrisk revealed that it was in final stages with an overseas investor for a $5 million fund. The startup plans to raise $15 million this financial year. Cymatic is currently in talks with investors and plans to raise funds by end of October.
What’s not working out?
A report published by NITI Aayog in January this year revealed that the pupil-to-teacher ratio for elementary school stood at 24:1, lower when compared to countries like Brazil and China. A shift in the mindset and increased adoption of technology in the education space will allow upskilling of teachers and create better learning opportunities for students.
However, Debtanaya Banerjee, curriculum designer in a leading edtech startup, says two things are not resonating with students residing beyond metros. The first is lack of resources.
“There is only one laptop or computer at home, and it is not available for children all the time,” the former fellow in a non-profit organisation says. Secondly, “The stronghold of the traditional system of education is a hindrance. Students and parents in the smaller towns and cities will take a while to believe and accept online learning,” she adds. Debtanaya has earlier taught in a low-income private school.
With technological advancements, increased access to internet services, and the right amount of funding, it will not be difficult for edtech players in Tier II and III cities to compete with their counterparts in the metros.
Saiju says, “Rather than competing with the big players, most edtech players in Tier II and III cities are creating their own market and user acquisition strategies.”
(Edited by Teja Lele Desai)
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Link : https://yourstory.com/2020/07/startup-bharat-edtech-covid19-byjus-unacademy-bharat
Author :- Debolina Biswas ( )
July 15, 2020 at 05:35AM
YourStory