COVID Establishes Edtech As the Sunshine Sector
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Education is a fundamental right of every human being. UNESCO is leading this initiative with its Education 2030 Agenda. It has predicted that only six in ten young people will be finishing secondary school in 2030. We have a humongous challenge. The mass education format of a classroom assumes every child being average in picking up concepts and it doesn’t cater to the requirements of either the brighter or the slow to catch-up students. Online education (edtech) helps overcome such a challenge by allowing students to learn at their own pace and encourages them to complete their secondary education.
Edtech has become crucial in the daily lives of millions of students worldwide ever since the COVID-19 pandemic brought the world to an abrupt halt. Online learning has finally come to the forefront and is helping parents, teachers and especially students understand and experience its full value. The traditional classroom teaching model was forced to move online, demonstrating the advantages of digital learning platforms. While 2020 was extremely volatile across segments leading to pay cuts and unemployment, the edtech industry emerged as a sunshine sector and consolidated its market hold.
Leveraging the high potential growth of the sector, a plethora of startups started developing innovative tools and solutions to change the way thousands of students learn. The sector also attracted massive attention and VC funding during the pandemic. According to reports of the Indian Private Equity and Venture Capital Association and PGA Labs, the edtech segment raised nearly $2.22 billion funding in 2020, up from just $553 million in 2019. The Indian government, too, increased budgetary allocation for education from $11.3 billion in 2018-19 to $13.2 billion in 2020-21 and introduced the pathbreaking National Education Policy, 2020. This led to huge marketing and branding efforts from edtech players to garner customers and cash in on the demand during the pandemic.
In the last few weeks, there is also a trend indicating consolidation: with bigger players buying out the smaller niche ones. The sector is also abuzz with fundraise activity by early-stage startups amid this consolidation. Even as there are talks of a few players leading the race, there is clear indication that this sector will continue to grow in the next five years as others come to the fore with a focus on different audience segments, business models and applications. The Indian education market is worth $117 billion in India with around 360 million learners in primary education comprising 66 per cent of the spend, followed by 27 per cent coming from secondary education, as per the PGA report. Given that the Indian education ecosystem is poised to grow tremendously, and with the adoption of new-age technology applications, edtech is the perfect synergy bringing both of these together to witness a revolution in the sector.
Differentiated e-learning platforms such as Practically engage students in the K-12 segment as well as those appearing for competitive examinations and have used the power of AI to personalize experiences and deliver appropriate content and test-prep while learning for every subject. Practically has clearly established that experiential sessions make us learn better and content and simulations that are immersive and engaging for kids will continue to find acceptance. Even as economies open up with the introduction of vaccines and inoculation underway, there is no doubt that education delivery has been transformed. At YourNest, our investment in Practically and their growth in the last 18 months, since we have been part of their journey, is a strong testament to this fact.
The edtech sector is ultimately developing skills and up-skilling to train the future workforce and to meet global demand, respectively. India has become a booming private education market in the world and, in addition to D2C companies, it has also led to the expansion of B2B opportunities offering tech solutions to schools. Practically also offers Practically School Solution to cater to the demand from schools.
According to experts, the adoption of technology will drive the future growth of education, encouraging students to embrace active learning with a combination of online and offline offerings. Deep penetration of the internet and further increase in the use of smartphones and other electronic devices have spearheaded online content consumption in India. There are, however, some challenges that can be overcome: getting internet access with affordable pricing on devices for both teachers and students remains a barrier. State governments need to implement policies to ensure holistic learning with a focus on accessibility. Tier 2 and 3 cities deserve greater focus to tap the huge base of aspirants who are lagging due to unavailability of facilities and poor infrastructure.
If 2020 was a ‘reset year’ for the world, it was more so for edtech which has benefited from the accelerated digital transformation. I have no doubt, whatsoever, that we cannot turn the clock back; we will not revert to the pure offline/classroom methodology and the future is one where learning will happen with the aid of innovative products like Practically.