During the pandemic, the edtech sector of India was one of the biggest flourishing sectors. Platforms like BYJUs, Unacademy and older platforms like Khan Academy came with new ways of engaging the students, including animated videos to make the lessons appealing. When the schools and other educational institutions were shut down during the pandemic, online education saw huge growth. As a result, many edtech startups picked quite a large sum of investment.
Edtech startups at its peak raised $2.2 billion in investment and BYJU’s alone raised a funding of $1 billion. These edtech startups not only educate the students of their schools but also prepare them for different exams to land Government Jobs by clearing the Sarkari Result. The edtech startup showed a pretty bright picture of the startup ecosystem. The huge trend of edtech startups made it seem like online education is here to stay in India, but the scenario of 2022 is proving otherwise.
Why is the popularity of EdTech decreasing?
Even though 2020 and 2021 proved to be the golden years for the Indian edtech sector, the popularity of the edtech companies is decreasing in 2022. One can directly relate this to the fact that schools and colleges have opened up and therefore, the students are back to offline education. In addition, screen fatigue was a real thing for the students engaged in online education. Even though remote learning provides the students with flexibility, it proves to be burdensome for them. The burdensome emotion emerged out of the feeling that they had limited social interaction with their friends and students.
During the pandemic, the students were so bored with remote learning that now they are looking forward to offline learning. The best part of offline learning is that the students get to interact with other students. Hence, there is a change in attitude. Behaviour change has a direct impact in customer acquisition. On top of it, there is also a high risk for the existing online students to shift to offline mode.
Even though the edtech sector was blessed with a good investment, most of the investment is now going towards acquiring new customers. Instead of building on resources, the money is being spent on acquiring new customers. This is creating a not so promising future for the Indian edtech companies.
How Are Indian EdTech Companies Dealing With The New Challenge?
The realization that students are now moving towards offline education has hit edtech startups hard. Perhaps, this is the reason why the big edtech companies of India are now drawing their attention toward offline learning. Byju’s has acquired the popular Akash Institutes and on the other hand, Unacademy has opened up its offline centres. In short, in order to survive, it is crucial for edtech companies to shift to a hybrid model which encompasses both online and offline learning.
However, it is a known fact that moving to the offline setup is expensive and the fund for expanding is limited. Perhaps, this is the reason why so many edtech companies are laying off their stags. In the past few months, more than 1,200 employees of prominent edtech startups have been fired. If the trend continues, the edutech companies will be the biggest contributor to employee layoffs this year.
The phenomenon is global
The edtech phenomenon that the Indian edtech startups are facing is not specific to India. The same trend currently exists across the globe. With the decrease in the global download in economic activity, many startups are feeling the burden of it. According to reports, many companies are now preparing themselves for recession. This is threatening startups across the globe.
Currently, all the startups are focusing on reducing their expenses to run long. The storm is yet to come but it will surely come. Interestingly, the impact of the looming danger is not only on the edtech sectors but also on the other sectors, and this includes health sectors and even big names like Netflix are on the list.
It is now important for the edtech startups to bring good results in the form of the good results of the students who are enrolled in their online programs. Without it, surviving will be tough in the future.