Written by Rajesh Mehta, Founder / Director / CEO at Entry-India.
India’s EdTech growth, a boon for the Nordics
“Education is the most powerful weapon which you can use to change the World”.
These wise words of Nelson Mandela aptly describe the gravity of which knowledge holds in society. Still, the barriers in delivering this energy has been a major challenge since the birth of civilisation. Since the advent of the devastating Covid-19 pandemic, these deterrents have been compounded by the loss of human touch, under-penetration of smart devices and non-availability of high-speed connections especially in developing regions like India.
However, times of crisis accelerate innovation. Similarly, the Indian economic system paved way for the Ed-tech industry to reinforce the struggling future of our next generations. While the COVID-19 pandemic came as a boon for many online businesses, none has seen the kind of growth and demand as the EdTech sector did in India. In the calendar year 2020 alone, start-ups in the EdTech space received an astounding investment of $2.2 billion.
EdTech Industry in India is expected to grow to $30 billion over the next ten years driven by increased consumer adoption supported by the pandemic-induced macroeconomic changes, improvements in product offerings, and changes in business models. As a result, the paid user base is expected to increase from ~1.6 million users in 2016 to ~9.6 million in 2021.
Direct–to-Customer (D2C) online platform’s growth is driven by a large offline student base which is now shifting to them and increased internet penetration in tier 2 cities and beyond. Primary and secondary education and Test preparation sub-segments seem most promising, which are expected to grow at a 60% CAGR in 2021-22 alone. In 2021, the highest valued D2C EdTech company in India was BYJU’S with a value of 16.5 billion US dollars. Apart from BYJU’S, it was Unacademy, which crossed the value of more than a billion US dollars.
At the time when D2C EdTech start-ups were adding new users at a breakneck speed, business-to-business (B2B) focused companies that never made it to the big league till now also saw an uptick in new signups from schools and tuition centres. Last year, when the COVID-19 pandemic forced educational institutes to temporarily shut down they had to make do with online classes over Zoom and other video call platforms. However, they needed a better and long-term solution, something that can emulate teaching students in a classroom. This is where the offerings of B2B EdTech start-ups such as Classplus, Winuall, and Teachmint saw unprecedented growth and came in handy for schools and tuition centres. Together they raised close to $15 million, that to in their first year of operations.
Complementing the growth of EdTech sector is the National Education Policy 2020, which finally discontinued rote learning and aims to create a modular, multimodal outcome-driven education system. NEP’20 is set to provide a significant impetus to the role of technology in all aspects of education: teaching, learning, assessments, credentialing, governance, analysis, and personalization. It provides a fillip and legitimacy to the EdTech industry – without putting it on fire.
The exciting part is that NEP has opened a whole new set of possibilities for the niche players dealing in language-based learning, cognitive and analytical skill development, game-based learning, and VR and AR-assisted skilling. India being the second-largest consumer of mobile phones (nearly 800 million) AR/VR offers students the flexibility to access educational content seamlessly across devices. It could also open an opportunity for social collaboration and spatial communication in a room-scale environment, where teachers can teach students remotely, and students can collaborate on various interactive and immersive experiences.
The NEP will also give a thrust to EdTech companies that work toward building comprehensive “Platforms as a Service” like Learning Management Systems, ERP Softwares, Assessment Platforms, online labs etc. for the industry.
The entire world is aware of the Nordic excellence in the telecom sector, AI, EdTech, gaming, vocational education, and clean tech. As India’s education ecosystem is revamping, modernized vocational education schools and usage AI based technology can help upscale skilling as per global standards. As Indian youth signup for online courses and platforms to prepare for academic tests and obtain job-related skills, EdTech companies in the Nordic region can localize in partnership with Indian players to find a lucrative market.
Current volumes of India’s trade and investment with the Nordic region is well below potential. Although in recent years there is enhanced awareness of each other’s strengths and capabilities, there is considerable merit in expanding interaction beyond conventional goods and services. Nordic companies with cutting edge technologies can solve specific business issues of Indian companies, which can have the reach and access to global clients. With these synergies, companies from both sides can market and evangelize adoption across verticals. Mutually beneficial tie-ups could range from strategic investments, acquisitions, co-creation, co-R&D, and capacity augmentation.
The next decade will be an inflection point in the education realm of India characterised by increasing smartphone and internet penetration, increasing demand for quality education and growing target youth population. The Indian Growth story is yet to fire and any early rider is bound to get the best out of it. Because “India will be a global player in the digital economy” ~ Sunder Pichai, Google.
Rajesh Mehta is a leading consultant & columnist working on Market Entry, Innovation & Public Policy. Entry-India
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