The state of ed-tech in India

Reopening of schools and the economic uncertainties have trumped the edtech landscape in India. There’s a drop in private sector funding, resulting in multiple layoffs, and an eventual dip in customer acquisition.

It is simply not enough for edtech businesses to offer a diverse range of courses to make the industry thrive again. The truth is that the market has changed a lot since 2020, and the conditions that once helped these businesses boom are now act against them.

It is worth analyzing how conditions such as barriers to entry, market demand, oversaturation, and misguided adoption of digital technologies are turning the tides away from the once booming edtech landscape and measuring it against the scope for respite.

Oversaturation of the market

In 2024, the funds required to run a successful edtech company must be substantial. Required capital can vary based on the complexity of the services and the location. In terms of location, India has a leg up. It has all the ideal conditions to develop and run a successful edtech business on paper, reducing the barriers to entry such as financial costs of software, design, and hiring resources. It is the reason why in the first half of 2020 alone, India clocked in a total of 4,500 edtech startups.

But there’s a clear oversaturation of the market. Something as fundamental as education is always viewed with the lens of quality versus quantity. People have less reason to opt for more than a few edtech services unless they stand to gain insights into something truly innovative and valuable.

While there are different segments of edtech such as K-12 complementaries, distance higher education providers and upskilling platforms, the options are still linear. There is less room to maneuver within the given scope unless the curriculum, teaching methods and technological integrations are truly unique.

Misguided digital innovations

India had a strong digital divide that seemed hard to bridge until the Covid-19 pandemic. The National Education Policy, 2020, emphasized the role of technology and prioritized educational services in regional languages.

This, combined with the Digital India Act, has largely narrowed the digital divide. However, having access to smartphones does not immediately guarantee education. Many are unaware of the potential of these devices, bringing in a new challenge-bridging the gap between accessibility and knowledge.

There needs to be more government-led initiatives that educate people on how they can leverage educational services. Those with little to no educational and technological background may also find it hard to self-learn and navigate their way through well-built, yet complex online educational platforms

. For example, people in the remote parts of India may not know their way through advanced technologies such as augmented reality and virtual reality. Having too many things to figure out before they even get to learning what they signed up for, may even put some people off.

Understanding the capabilities of the target audience is extremely important, and simply integrating high-tech solutions into the platforms without understanding the capabilities of the customers may not be the way to go.

In fact, over 80% of participants in a recent study claimed to prefer in-person learning for its collaborative, interactive and simplistic nature. This holds especially true when it comes to K-12 and higher education.

While the onus is, to an extent, on edtech service providers to make their interface easy to understand, currently, they are unable to consistently invest into their solutions

. Since private investments are slim, the government could look into incentivizing innovations in the edtech sector, promoting R&D and third-party tie-ups with digital transformation vendors.

Opportunities ahead

The way a company functions and charts out its trajectory also highly influences its scope for growth. Ongoing shifts in the economy and customer preferences, edtech companies are now finding it difficult to reposition their services.

The solution lies in diversifying their key offerings. A recent report found that resource seekers are starting to value experience above educational qualifications

. Many students claim that they get rejected for entry level job positions despite having relevant degrees and high scores.

Over 80% of engineering students are not fit for any job in the knowledge economy and only 2.5% possess tech skills in artificial intelligence, which has quickly become an in-demand skill.

A huge part of education is the job hunt that follows, and edtech companies could bridge the gap between education and experience.

Leveraging technologies such as data analytics to shortlist internship or job positions for students while they use their services to upskill or learn in tandem with their university courses can be a valuable addition to online education platforms. They can also look into tying up with businesses to provide placement opportunities to students who secure high scores in some of the in-demand courses.

While it is not easy for an edtech firm to navigate the current market conditions, there will always be opportunities for companies that are focused on innovation and creativity, adapting to address unfulfilled needs in the marketplace.

The author is founder and CEO of Creative Synergies Group. Views are personal.