He economic consequences of the lockdown, enforced to combat a runaway Covid-19 pandemic, are now well known: that the headline statistic turned into a 23.9 per cent contraction in India’s GDP growth for the first quarter of the current fiscal, which underlines the way the broad market has been crippled. India’s education sector, estimated at $91.7 billion (Rs 6.67 lakh crore) in FY18, based on India Brand Equity Foundation, was not spared either. The closing of schools and schools hit the finances of thousands of educational institutions.
However, the limitations of the physical universe introduced a fortuitous opportunity for educational technology start-ups, which witnessed a major spike in demand for their offerings.
India’s leading ed-tech app Byju’s Courses ranked one of the world’s top 10 most-downloaded education apps during the lockdown. Recent trends indicate that digital instruction will be an essential component of educational associations in the postCovid world also, simply take note of this, investors are making a beeline for this particular sector.
Recent news reports, citing research firm Venture Intelligence, state that among the eight financing rounds of $100 million (Rs 730 crore) and over in Indian startups in the April-September period, five were for ed-tech businesses like Byju’s, Vedantu, Unacademy and Eruditus, and a third of the $1.5 billion (Rs 10,950 crore) raised in these eight investment rounds was by Byju’s alone. You will find a host of investors gambling on Indian startups in the ed-tech space–Tiger Global, General Atlantic, Silver Lake, DST Global,SoftBank, Sequoia Capital and Nexus Venture Partners, among others.
The investors’ interest is driven by the students’ requirement to carry on with their courses as confusion about reopening of schools and colleges, shut since March, persists. Combine
This together with the increasing number of internet users with access to smartphones from the nation, and the business is poised for big growth. India’s smartphone foundation is estimated to achieve 820 million in the following two decades, according to a report jointly published by Indian Mobile and Electronics Association and consulting firm KPMG in July. India is currently the second largest market for e-learning after the US and, based on IBEF, the industry is expected to reach $1.96 billion (Rs 14,308 crore) from 2021, with around 9.5 million consumers. Meanwhile, India has 504 million active internet users, said a May 2020 report by the Internet and Mobile Association of India. According to a report by consulting and insights firm Kantar, also published in May, India’s monthly active internet user base is estimated to reach 639 million by December end. “The pandemic has just ramped up the adoption of these platforms and there is no going back.” Investors are on the watch for, as Mirchandani sets it, a”fantastic group, a great business model and the invention around it” A lot has to do with the timing too. “In our industry, we will need to grab the signals early,” he adds.
According to reports, a huge part of the funds raised by ed-tech firms were spent on marketing and acquisitions. Last year, Byju’s acquired US-based learning platform Osmo for $120 million (Rs 876 crore) and, in August this year, it bought online coding plat form White Hat Jr in a $300 million Unacademy, meanwhile, has gained smaller start-ups like CodeChef, Mastree, PrepLadder and Kreatryx, and is the official partner for the ongoing Indian Premier League’s (IPL) 2020, being held in the UAE. Reports estimate the deal between the BCCI (Board of Control for Cricket in India) along with the e-learning company to be in the range of Rs 120-130 crore. The two were also reportedly contenders for IPL’s name exemptions.