Edtech Market Overview:

 capital inflows into the test preparation and online certification segments are comparatively higher.
Together, these two make up for 88% of the total funding in edtech startups.

India has more than 1.5 Mn schools with over 260 Mn students enrolled and about 751 universities and
over 35K colleges. Every year millions of students take competitive exams at various levels, with millions
of rupees spent in the background on schooling, coaching, training and more. Yet, no player in the edtech
sector can claim to be profitable so far.

Except for BYJU’s that earned INR1306 CR in FY 19-20 at a loss of INR 8.80 CR, most ed-tech startups
are grappling with massive losses and burning cash at a fast pace. Ed-tech startups fail in India due to lack
of funding to take on target this larger market.

India’s Online education market is set to grow to $1.96B by 2021, with 9.6MM users as from $247MM
and 1.6MM users in 2016.

Industry Overview:
- Primary and secondary supplemental education will be the largest category in 2021 at USD 773
MM, growing at CAGR of 60%
- Test preparation will be the fastest growing category in 2021 with CAGR 64%
- Reskilling and online certification was the largest category with $93MM in 2016
- The Indian edtech startups recorded an investment of $433 Mn in 2019, taking the total funds
raised by the startups to $1.8 Bn,
- Due to the end result and nature of preparations, these courses have low repeat customers.

Category wise split of Online Education market in India

Test Preparation Market Overview:

Expected to be USD 11B market in 2021
Flexibility, convenience and low cost are the factors gradually making the prospect of higher education
online more appealing for students and professionals alike

Key trends
- Mobile led learning is going to dominate the future
- Demand driven from tier 2 & tier 3 regions, due to lack of faculty availability in these regions
- Demand for regional language content, as aspirants of banking exams use regional language

Challenges
- Widespread presence of offline players with considerable regional presence
- Availability of free content impacts the transaction volume of online players
- Evolving structure of competitive exams, rapidly changing exam patterns, syllabus and level of
difficulty, impacts the creation of quality content.
- Low Awareness of Online platforms offering test preparation courses amongst students

User base
- There are two kinds of user base for this category based on exam type
-Students opting for competitive, engineering, medical and CAT exam
- Working professionals opting for exams such as Bank PO, CAT, UPSC & GMAT
- Who Is the current user?
- Tier wise course preferences

The online adoption also has varied trends across tier categorization of the towns and cities.

Metros and tier 1 cities have higher adoption in the test preparation courses resulting directly in a job such
as Bank PO exams and government services, GMAT/MBA – On account of high propensity to pay for
these courses

Tier 2 cities and other towns have a higher uptake for online test preparation related to undergraduate
courses. This is on account of limited options available for quality test preparation content in these
regions.

Online test preparation is poised to witness rapid growth, based on increased acceptance in tier 2/tier 3
cities

Growth of online test preparation in the next 5 years is likely to emerge from tier 2/tier 3 towns. This is on
account of limited options available for test preparation at these places. Rapid rise in internet
infrastructure and wide acceptance of digital payments options, can contribute to the growth of online
test preparations in tier 2/tier 3 cities. An emerging trend is the hybrid model, where online players have
opened centres to provide an offline touch point to students and also a classroom experience at regular
intervals. Hybrid model is expected to gain traction in the future.

Players in this segment are also looking at online options to address the overseas market looking to take
competitive exams in India.
About Unacademy

Unacademy has over 10K registered educators and 13 Mn learners. The company claims to have 100 Mn
monthly views across its various platforms such as Unacademy, Unacademy Plus, Wifistudy, Chamomile
Tea with Toppers, Unacademy Studios and The Solutionists

the company has more than 90K active subscribers. 70% of our users are from tier 2 and tier 3 cities.
More than 700 educators take classes on Unacademy every day.

Unacademy Plus subscription has recorded $30MM ARR

Unacademy plans to launch more test prep categories, onboard more great educators and work on making
its content the best in the industry

Unacademy’s revenue ha grown 3.19X in FY19 reaching INR 21.89 CR, as against FY 5.22 in FY18. But the
company’s losses are 4.12X of its total revenue reaching INR 90.27Cr as against INR 23.58 CRr in FY 18

Unacademy has till date raised a total of $88.6 Mn from investors such as Steadview Capital, Sequoia
India, Nexus Venture Partners and Blume Ventures among others.

Revenue:

( add future prospects, how unacademy is planning to increase revenue)

Unacademy has started generating revenue from its Unacademy Plus portal, which is its subscription
model.

Iterestingly, the company filings showed that it has started generating revenue from its Unacademy Plus
portal, which is its subscription model.

The company in its filings said that it “derives revenue by providing technology/platform for online classes
which is recognised as total consideration received from learners minus the revenue share pertaining to
the educator. The educator share depends on the terms of the contract entered into with the respective
educator.”
 Unacademy Revenue, Expense and Loss trend FY 18-19

For current figures of unacademy

https://yourstory.com/2020/02/unacademy-rise-annual-recurring-revenue

https://economictimes.indiatimes.com/industry/services/education/unacademy-eyes-usd-300-mn-
recurring-revenues-in-coming-years/articleshow/74194940.cms?from=mdr

+ points about unacademy ( reason for growth)

https://cofounderstown.com/7-reasons-behind-success-unacademy-e-e827c

Can cover competitive landscape and how unacademy is different from other players)

Marketing and digital strategy

Sources

https://assets.kpmg/content/dam/kpmg/in/pdf/2017/05/Online-Education-in-India-2021.pdf

https://inc42.com/buzz/facebook-is-the-latest-high-profile-investor-in-edtech-startup-unacademy/