The education technology (edtech) sector has faced many challenges this year, ranging from Byju’s financial turmoil to layoffs. The funding in the sector has declined 48 per cent in 2023. Apart from this, 24 Indian edtech companies have laid off 14,616 employees since last year.
The total funding in the Indian edtech sector fell 48 per cent this year compared to the same period in 2022, and 50 per cent compared to the same period in 2021, according to a report released by Tracxn. This year (till August 7), there was only one fundraising round worth more than $100 million. The majority of funding into domestic edtech businesses has been obtained in the second quarter, at $713 million, accounting for 73.4 per cent of total capital raised this year.
Shantanu Rooj, founder and CEO of TeamLease Edtech, said, “What has led to this decline? There was a lot of hype about edtech during the pandemic. Education technology provided continuity to an industry that panicked the most with the closure of campuses. However, the expectations from edtech reached unrealistic levels. This overhype led to a large amount of venture capital flowing into the industry that drove up the valuations.”
He added that many companies measured their progress through non-financial metrics (eyeballs, registered users, courses on the portal etc) which was being accepted by the investors. “However, as the pandemic ebbed and students moved to the classrooms, the hype around the technology reduced and there was a demand for delivering credible outcome. Several schools and colleges, who had been complaining about poor delivery by edtech players, shunned them once the campuses opened and this led to erosion of credibility.”
He also said investors started focusing on financial performance and sustainability. “Several players could not stand up to the challenge. Soon the sentiments turned negative and fund inflows reduced.”
Govt Policies and Announcements
The Indian government’s focus on the education sector has been growing, with the recent announcement of the largest-ever education budget allocation of about $13.67 billion in the Budget 2023 presented by Finance Minister Nirmala Sitharaman in February this year.
The investment aims to support the development of edtech, skill development, and R&D in the country. The Indian government has announced various reskilling and upskilling courses, such as Big Data, Digital Marketing, Data Science, DevOps, Cloud Architecture, Programming, and Web Development.
US universities can conduct workshops and training programmes in collaboration with Indian universities and industry partners. These programmes can be focused on specific skills or technologies and can provide students with hands-on experience and exposure to real-world challenges.
The Indian government plans to establish three artificial intelligence centers of excellence and introduce modern industry 4.0 courses, including coding, AI, IOT, mechatronics, drones, and soft skills, which will help prepare students for the future workforce.
The allocation of about $280 million for the National Research Foundation (NRF) is another positive step towards strengthening the research ecosystem in India. US Universities can collaborate with NRF and tap into India’s knowledge and expertise in areas such as advanced materials, biotechnology, and energy.
Rooj said there has been some credible progress by the government and the regulators. Most of it has been towards the implementation of the NEP 2020 which is a lighthouse document for the industry. “However, there would be a few areas that the government may consider for the coming year, including separation of the role of the regulator, the funding body and the service provider, and allowing more universities and autonomous colleges to offer online degrees.
Edtech Layoffs In 2023
The Indian EdTech sector has generated employment to the tune of over 75,000 jobs for the Indian workforce in just the past five years, according to data collected by the Indian EdTech Consortium (IEC) formed under the aegis of the Internet and Mobile Association of India (IAMAI). Over 50,000 professionals are currently part of the edtech ecosystem.
However, according to Inc42.com, as many as 24 Indian edtech startups, including six of the seven edtech unicorns, have fired 14,616 employees since last year.
TeamLease Edtech’s Shantanu Rooj said, “However, right sizing of their teams by most edtech companies, which had overhired, is over. Now the industry looks quite stable with a new breed of companies who are looking at consistent growth. This is driving up the outlook of hiring in the edtech industry again. Roles like student counselors, career counselors, content creators, student support executives, cloud engineers, security experts and academic counselors are in great demand.”
New-Age Tech Trends in Edtech Sector
The Indian tech sector is witnessing an advanced technology development, which is a silver lining for the sector.
The new technology helping the edtech sector includes personalisation of learning using adaptive technologies, use of artificial intelligence, increased use of AR and VR, use of blockchain for managing educational credentials of students, and hybrid learning.
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