Can Edtechs Make Their Mark In Formal Education? The education market in India is set to grow with over 580 million people in the age group of 5 to 24 years. Many Edtech companies are tapping into this opportunity. But will they be successful?

In 2018, there were 3.25 lakh schools in India which stood at 3.36 lakh in 2021-22, which is an increase of over 10,000 new schools. With over 580 million people in the age group of 5 to 24 years, and 25 million children born every year, the education market in India is set to grow in the next few years. India's Pre-school market is expected to grow by USD 7.35 Bn by 2028, at a CAGR of 11.2 per cent during 2023-2028. Overall, India's education and skills market will double to USD 313 bn till 2030, according to Invest India. This is a massive opportunity for many edtech companies, who have already ventured into it or are considering doing so. "It is good for the industry. With edtech new approaches, pedagogy and innovation will also come. The industry needs a lot of investment to cater to the needs of Indian students, only government and existing private players are not able to accommodate its need," says Dr. Ramanand Nand, Co-founder, Center of Policy Research and Governance (CPRG)

While Career Point, Resonance Eduventures Pvt., Bansal Classes Pvt. Ltd, Triumphant Institute of Management Education Pvt. Ltd (TIME), and Allen Career Institute have already ventured into it, the latest in line to do so is Physics Wallah with its first PW Gurukulam School in Gurugram. Affiliated with the Central Board of Secondary Education (CBSE), PW Gurukulam will cater to students from Play School to Class VIII, adhering to the curriculum framework outlined in the National Education Policy (NEP) 2020.

"The school will be a canvas for students to paint their futures with immersive and transformative learning. At PW Gurukulam, we aim to offer education that covers a wide spectrum and will enable them to choose from limitless possibilities rather than conventional career paths," Alakh Pandey, CEO & Founder, Physics Wallah said.

How do they fare?

While there is a vast opportunity in formal education, how do these edtechs and coaching institutes fare when they throw their hat in this ring is a big question. Career Point, which forayed into schools with CP Gurukul (Since 2012 in Mohali and Kota and later in 2015, with Global Kids, a pre-school chain), is doing it successfully. It recorded income from operations at INR 54.2 crores on consolidated basis and 10.2 per cent revenue from operations growth in the financial year 2021-22. Whereas, in the financial year 2022-23 it recorded INR 85.4 crore on consolidated basis with 57.4 per cent growth in revenue from operations as compared to 10 per cent during the same period of 2022. The growth in operating income is a result of increased enrolments across franchisee centres, residential campus and formal education division.

Triumphant Institute Of Management Education Private Ltd (TIME) which has been running pre-schools since 2008 across various cities including, Andhra Pradesh, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Punjab, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal recorded revenue of USD 16.5 million on March 31, 2022.

Similarly, Kota-fame Allen Institute which has been running classroom campuses and residential campuses from 1988, has recorded INR 2,277 crore during the fiscal year ending March 2023, according to its standalone annual financial statements filed with the Registrar of Companies.

However, not all have tasted success in this field. CL Educate Ltd (Formerly Career Launcher) that invested around INR 250 crores in the school business and opened schools along with collaboration with Indus World School and others (the company was willing to infuse around INR 1000 crore but the operations were stopped in 2017), had to shut down its business of operating pre-schools & management services for K-12 schools.

Imran Rashid, Chief Business Officer, Physics Wallah (PW) is, however, optimistic regarding venturing into formal education. He said that Gurukulam will prioritize comprehensive education, nurturing students to become well-rounded individuals through a curriculum that promotes not just intellectual but also emotional and physical growth, ensuring a well-balanced preparation for life's challenges., "Our model emphasizes end-to-end delivery to meet the comprehensive needs of students and is well-positioned to succeed financially due to several key factors including the size of India's population."

"The sheer size of India's population and the increasing emphasis on quality education present a vast market opportunity. With a large number of students entering the education system annually, the demand for innovative and effective educational solutions is on the rise. Our model's focus on providing a holistic education, from foundational learning to skill development, aligns with the evolving expectations of parents and students alike," he added.

Imran believes that trust is foundational to the model's success as parents seek reliable, long-term educational partners that can support their children's growth from early years through to career readiness.

"Financially, leveraging the large ecosystem PW has built and the foundation of trust and comprehensive educational offerings, we anticipate vibrant business growth. In full-fledged operation, our revenue potential is significant, driven by our ability to attract and retain students through a model that delivers tangible outcomes in terms of academic achievement, skill acquisition, and overall development," he further said.

Challenges

The road to venture into formal education is not easy. Speaking on the challenges in the market for edtech companies, Shivangi Bubna, Executive Vice President, Mumbai Angel said that these companies should collaborate with traditional schools rather than compete. "We are a devising country in terms of education. The seamless integration with Edtech, moving into the curriculum and navigating through regulations ensuring teachers training can be very challenging," Bubna said.

She said that seamless integration of EdTech solutions into existing curriculums, learning management systems, and assessment methods are mostly difficult due to resistance among educators and administrators to adopt new technologies, requiring training and support, compatibility with the existing systems and learning platforms in different schools, tech limitations and lack of expertise in schools.

She also drew attention to the fact that effective edtech implementation needs well-trained teachers who can adapt their training methods and integrate tech effectively into their lessons.

Regulation is another area of concern, according to experts, "Concerns around student data privacy and security are paramount. In this regard, the industry must ensure compliance with strict regulations, data protection laws like India's General Data Protection Regulation (GDPR) need to be strictly followed. Protecting sensitive student data from breaches and unauthorized access is crucial as well," Bubna added.

According to Nand, without regulation, the sector will be chaotic with no control over quality or the proportion of technology and classroom technology. "Regulation will ensure the interest of students and parents. In absence of regulation, edtech companies can put pressure on parents to purchase certain products of their companies," Nand added.