4 Lessons India's Edtech Startups Can Learn From Global Peers For a Brighter Future Most edtech startups have not been able to show any meaningful progress toward profitability so far

Edtech as a segment has seen the maximum highs and lows in India. While 2021 was a year of triumph for startups in the space, 2022 was a year of layoffs, falling funding levels and losses for the majority of them. Experts expected things to get better in 2023, but so far many leading players have only been able to take baby steps to stay afloat.

They have not been able to show any meaningful progress toward profitability. But, while valuations became a bigger priority than customer satisfaction for many of these companies during the pandemic, today the models are evolving and the focus is shifting away from irrational funding and unrealistic valuations.

"Edtech's big limelight came with the pandemic when digital was the only way possible. As the economy went back to normal in the post-pandemic era, edtechs found it difficult to survive with their power online business models. This was further worsened by India's biggest edtech's dipped valuation and many layoffs," said Milan Sharma, founder and MD, 35North Ventures.

Here are some lessons that they can learn, especially from edtech segments in developed startup ecosystems such as the US, Europe and China, to ensure the segment witnesses significant growth again.

Hybrid or phygital is the only way forward

Unlike food or grocery ordering or even watching movies at home, offline play is still crucial for edtech startups. Even developed economies continue to equally focus on offline education. "Startups need to go back to basics, replacing classroom learnings with pure online models won't be an easy nut to crack. In my personal opinion, Hybrid Education is the way going forward. The valuation should be reasonable leaving upside of venture investors," said Sharma.

Creating impact should be the first goal

India's edtech sector was valued at $750 million in 2020 and is supposed to reach $4 billion by 2025 at a CAGR of 39.77 percent, making it one of the fastest growing sectors in the country. However, things didn't go the way it was expected post the pandemic. "In scaling an edtech business, it's vital to remember that success isn't just about growth metrics, but the lasting impact you create in students' lives. Providing quality education to the user should always be at the heart of what you do. This must define all activities of the business, whether it be a new product, feature or program - whether it is simple and will truly improve student's learning or not," said Jairaj Bhattacharya, MD and co-founder, ConveGenius Group.

Partnerships and synergies are key

Just like the finance sector, synergies between startups and legacy players can go a long way in creating a win-win situation in the education sector as well. "Global edtech players who already have a brand in other industries like Amazon closed down their Amazon Academy but did not burn much money to start. So this synergy is the solution where a brand is already built in some other industry. If they start or partner or do a strategic investment in edtech, they can do great," said Ravi Teja Gupta, founder, Guptaji Invests.

"Also, edtech aggregators like Udemy, Course Era, Khan Academy, Edx, LinkedIn learning, etc. can start training as they know what works and what does not," he added.

Make it affordable

One thing that is unique to Indian market, something that we cannot emulate from other economies is the cost factor. In India, education cannot be an expensive affair if it has to reach many people. So, it is important for edtech companies to design products that are affordable.

According to Schoolnet survey last year, families in Tier I cities spend an average of INR 43,000 on their child's schooling. And, parents in India spend INR 16,000 annually on after-school education. This proves the existing burden on parents and experts believe edtech players should try to solve this instead of further increasing the burden, in order to have a better reach.