Edtech Outlook 2023: Priority Transition from Valuation to Profitability
The COVID-19 pandemic has had a profound impact on the EdTech sector and has accelerated its growth and adoption worldwide. India was too impacted by the pandemic, which hit several industries across the country. Eventually, the edtech market in India saw significant growth. With the closure of educational institutions, students and teachers turned to EdTech platforms for uninterrupted learning. This resulted in a significant surge in the usage and popularity of online education, leading to the growth of the EdTech sector.
The edtech market globally and in India has witnessed high projected growth. According to a report by HolonIQ, the global EdTech market has been expanding significantly, with estimates projecting its value to reach over $404 billion by 2025.
A report by IBEF that the Indian edtech market could reach $10 billion economy by 2025. It makes India the third-largest edtech market after the USA and China. The market encompasses a wide range of education-related technologies, including online learning platforms, learning management systems, educational apps, virtual reality (VR) and augmented reality (AR) tools, and more. These projections highlight the immense growth potential and opportunities in the Indian EdTech sector.
The Indian government has recognised the potential of EdTech to transform education and has introduced various initiatives to promote digital learning. Programmes such as DIKSHA (Digital Infrastructure for Knowledge Sharing), SWAYAM (Study Webs of Active Learning for Young Aspiring Minds), and the National Digital Education Architecture (NDEAR) have created a favourable environment for EdTech growth in the country.
What does Edutech’s projection for 2023 look like? We, at ASMA, have done thorough research on the potential market opportunities and valuation growth of edtech in India. The valuation of EdTech companies in India has witnessed a remarkable surge in recent years, reflecting growing investor interest and market potential until 2021.
As per the “Tracxn Geo Annual Report: India Tech 2022’, edtech was one of the worst affected sectors in terms of funding. Funding in the edtech sector fell by 39 percent compared to the same period last year as demand slowed down. About 70 percent of edtech funding in 2022 was made up of five $100+ million rounds raised by BYJU’s, Upgrad, LEAD School, and PhysicsWallah. Byju’s is one of India’s most valuable EdTech startups. Byju’s was valued at around $22 billion. Unacademy, a popular online learning platform, has also experienced significant growth in valuation. According to a report, Unacademy has raised multiple funding rounds, including investments from prominent investors like SoftBank and Facebook, and is valued at $3.2 billion.
In addition, the declining demand and the financial shortage led to the firing of over 9,250 workers in the edtech industry. According to Moneycontrol, companies including Lido Learning, Byju’s, Unacademy, and Vedantu sacked more than 1,000 employees apiece in 2022.
Many edtech founders have spoken about the slowing down of edtech funding. Unacademy co-founder Gaurav Munjal shared a tweet saying that “Winter will get worse. Get to profitability asap. And then grow from there. Stop all unnecessary spending. Focus on building great products and organic traction channels.”
The Way Forward to 2023
Since valuation is the projected financial outcome for the edtech industry, the focus should be more on profitability. Internationalisation, regional content production, skill-based learning, etc. can be considered as possible areas of growth for Indian edtech companies. Either through acquisition or expansion, companies are eyeing international markets.
Recently, edtech firm Simplilearn announced that it had acquired a US-based bootcamp education company, Fullstack Academy. Edtech needs to diversify its technologies and domains, like
Online learning platforms like Coursera, Udemy, Khan Academy, and LinkedIn Learning have gained widespread recognition and user bases.
Adaptive learning technologies have gained traction globally, allowing for personalised learning experiences tailored to individual students’ needs. These systems use data analytics and algorithms to adapt content and learning pathways, enhancing student engagement and outcomes.
Skill Development and Workforce Training EdTech platforms are increasingly addressing the need for skill development and lifelong learning. They provide courses and programmes that cater to professional development, upskilling, and reskilling, meeting the demands of a rapidly evolving job market. Platforms like LinkedIn Learning, Udacity, and Skillshare focus on these areas.
Gamification and interactive learning tools have been integrated into EdTech platforms to enhance student engagement and motivation. Game-based learning, simulations, and virtual labs are being utilised to create immersive and experiential learning environments.
AI and ML-based EdTech that can improve learning outcomes, provide personalised recommendations, automate grading, and generate insights from large datasets could be a potential market. Adaptive learning systems and intelligent tutoring systems are examples of AI-powered EdTech solutions.
Language and regional content-based EdTech platforms addressing the diverse linguistic and regional needs of India by providing content in multiple languages can be a growing market. This enables students from various regions to access quality educational material in their preferred language.
The edtech companies now need to focus on profitability, better customer experience and new age tech learning which will make this section continues to evolve and grow.