A combination of rising smartphone penetration, low data usage cost and internet adoption had initial impact on online entertainment penetration and is now helping learning to be more personalized, convenient and all-encompassing. With a population of about 1.4 billion, of which 40% below the age of 21 years and a 65% still living in rural areas, it is evident that a large number (addressable market) does not have access to resources for quality learning. With more and more people with a smart phone in their hands, EdTech continues to democratize education and Covid-19 lockdown has acted as a catalyst for growth in this adoption and penetration. Let us take note of key trends in the EdTech market and deal activity surrounding such themes.
EdTech continues to roll and Indian consumer adopts it with ease….Jay Kotadia lists out key developments in the sector over last two months
Cyber Universities
The nationwide lockdown forced the universities to shut down and operate virtually, whereby the students log in and watch live/recorded lectures. Thanks to video platforms like Zoom, MS Teams, Google Meet, etc., these virtual classes can be streamed by anyone, anywhere across the world with just an access to internet and smart device. The idea already was in existence where players like Coursera tied up with universities, offered courses & degrees on their platform online and towards the end of program, after clearing the necessary assessments. Such an acceptance helps a student, who at home in Bengaluru in India can complete a Masters course in applied data science from University of Michigan, USA and get certified. Recently, India’s 2020 Union budget took a step forward to promote this idea by allowing India’s top 100 institutions to offer degrees online. Indirectly, this has also helped the video platforms mentioned earlier to grow rapidly. For example, Zoom’s user base increased from just 10 million in December 2019 to 200 million in April 2020. Now this is some serious growth, 20x in 4 months! The concept of cyber universities will help us plug the gap between demand and supply, create new pathways and democratize quality higher education and access to future skills for a diverse country like ours
Online Proctoring
The lockdown hit India in March, right when the exam season was about to begin or had already begun. Exams and assessments are very important, especially for the board exam and final year students where based on the exam performance, they shall look out for higher education admissions and job opportunities, respectively. This is where technology can be a saviour and EdTech start-ups have been developing the technology to help to conduct the exams online. The student can write the exams over smart devices from a location of their choice and are proctored online using AI tools like – taking photos of the candidate through webcam on small intervals, Locking the screen to answer sheet only, analytics, etc. There are a few Indian start-ups in this space namely, Mettl, Merittrac, Wheebox, mUni campus, Eklavvya who have found some traction recently and as mentioned earlier, Covid has acted as a catalyst for their growth. GMAC which conducts
GMAT and IIM Kashipur are a couple of renowned institutions who allowed students to appear for exam online due to physical constraints. Although, the model of web proctoring of exams is currently at a very nascent stage due to lack of infrastructure, bandwidth, education & possibility of cheating. In the coming times, this is bound to get more organised and emerge as a trend where technology has a real part to play in education.
Upskilling & continuous learning
As per industry reports, 90% of Indian engineers lack the key skills companies are looking for. India ranked 51st out of 60 countries in Coursera’s 2019 global skill index which ranks countries based on supply of key demand fields like data science, applied mathematics, etc. India ranks 3rd in the world GDP, but ranks 139th in GDP per capita. Now, this explains the massive skill gap of workforce in India. Upskilling and continuous learning is the need of hour with changing business models and emerging technology. Ergo, there has been surge in the number of people taking courses online, attending exhibitions and updating themselves. Start-ups like Coursera, Udemy, Simplilearn, Greycampus, uFaber, Imarticus have attracted abnormal growth in recent times. The interesting bit of information which we gathered was to witness the growth of Indian traffic on global platforms. For example, Udemy – In 2013, Indian traffic formed ~5% of its total traffic. This number increased to ~14% in 2019. This clearly shows the increasing demand of Indian consumer to upskill, reskill and learn continuously. Also, the Government of India has been trying to boost the skilling requirements by promoting programs like Skill India Mission, SWAYAM & NDL. In the Post Covid market, where the economy looks bleak in the short term, those with relevant skills stand a higher chance of survival.
There might be several other trends which shall prevail as and when the technology and necessities grows. The Indian EdTech market today stands at ~$2 bn with more than 4,000 EdTech start-ups in India. Of which ~200 have received some sort of funding and ~1,200 have already been shut. In 2019, India received ~17% of the total EdTech funding in the world ranking third, after USA and China. In the first 3 months of 2020 itself, Indian edtech start-ups have raised more than $700 mn in 21 funding rounds, of which major being Byju ($500 mn from Tiger global, General Atlantic), Unacademy ($110 mn from Facebook, General Atlantic), Vedantu ($24 mn from GGV capital). Where the start-ups in other sectors have struggled to raise funds, as many as ~14 Indian EdTech start-ups have raised funding since March 2020 amid the Covid pandemic. This clearly indicates the investor confidence in the EdTech space in India. Talking about investors, some common PE funds investing early in the education space are Blume VC, Sequoia capital, Omidyar Network, Nexus VP, SAIF partners, Accel partners, Helion VP whereas Innoven/Trifecta continue to provides venture debt solutions. Also, some big PE players who have a larger ticket size include – General Atlantic, Owl VC, ADIA, Qatar sovereign fund, etc.
For the education market, the problem statement has been clearly defined, scale is visible, capital is ready to back up the vision and execution has got rolling. We at IMAP India have a strong conviction that unit economics in EdTech are far stronger and the diverse nature will lead to series of consolidation activity in years to come. At IMAP India, we have been successful in building a good knowledge base of the ecosystem in the EdTech market complemented well with the help of our partners in US and Europe. We strive to stitch a winning formula for the investors as well as the founders who are working hard to make our lives easier and convenient.
