The Indian EdTech Landscape

April 2020
Contents
1. Introduction: Market Size and Users
2. Growth Drivers
3. Challenges faced
a. Challenges faced in Tier 2 and Tier 3
4. Subsectors of Edtech Space
a. Primary and secondary supplemental education
b. Test preparation
c. Reskilling & online certifications
d. Higher education
e. Language and casual learning
5. Investments and Exits in the space
6. Trends in the space
7. COVID-19 impact on the Sector
Introduction

Market Size:
$247mn - 2017 $1.96bn - 2021

Active Users: 1.6mn - 2017 9.6bn - 2021

Education Technology (Edtech) is a education company that delivers its curriculum primarily using
technology.

Key Players in the Market:

Growth Drivers
The growth of online demand has been driven by a combination of demand, supply and
macroeconomic factors:

o Cost of online education – Online education provides a low cost alternative: Lower
infrastructure cost and a larger student base helps leverage on the economies of scale. The
average transaction value range – INR 15K - $20K. 175% increased in cost of education from
2008 - 2014
 o Online channel provides quality education: open courses and distance learning
enrolments in India to rise to around 10mn in 2021. Areas where quality of offline education is
low, higher adoptability of non traditional educational methods
o Growing job seeking population demands relevant industry training: 280mn workers are
expected to enter the job market by 2050; Unemployment rate highest in Indi and growth rate
of job availability is <2% pa
o Government Initiatives: SWAYAM, Skill India, Digital India and RMSA enable digital
education
o Internet Penetration witnessing exponential growth: Nearly 31% internet penetration with
409mn internet users; increasing penetration in semi urban and rural areas expected to be
735mn by 2021. This will increase reach and traffic
o Significant increase in disposable personal income: Disposable income is expected to
nd
grow and India is expected keep its rank as the 2 largest middle class till 2030
o Large faction is young demographic: 46% of the population is between 15-40. And there is
higher acceptability of online channels in younger generation

Challenges Faced:

o Digital education is not regulated by government to a very large extent.

o Online education is offering courses which are autonomous. The acceptability or
scaling to the mass market due to non regulated segment
o Limitations of current assessment or evaluation of students is flawed as it doesn’t take into
consideration practical aspects of knowledge and is not standardized for all students
o Knowledge is dynamic and changing quickly due to the era, and therefore constant need of
updating syllabus.
o Optimizing monetization – Edetch companies try gaining scale through free content and wide
spread access While this strategy gives them downloads but real solution lies in outcome of
certifications, leading to reskilling/upskilling leading to employability. Freemium model to give
confidence in the solution at first and then subsequently move to subscription model loses
sticky-ness of the client
o High cost of acquisition – Edureka acquires 60% users organically but is known to spend 1Cr
every month on digital marketing.
o Parents skeptical of increased screen time: Children require a balance between screen time
and real world activities. Lack of human interaction is a great cause of concern for parents
o Slow device penetration rate as digital device are beyond the means of many parents.
Challenges faced in Tier II and Tier III in the Indian Market
o Brand Discovery Challenge – Education industry runs on trust, brand image is integral in
creating marketing campaigns and increasing reach. The gap can be filled by technical
progression but majority consumers rely on brick and mortar.
o Technological Gaps in knowledge of end users – There has been tremendous growth of
internet usage in Tier II and Tier III but its limited to social media. The problem is to produce
content that is accepted and understood
o Digital Payments Methods not yet preferred – Shortage of trust in digital payments modes;
the penetration till date is 20% and the remaining still prefers cash mode in the rural reaches
of India. The best option is offline tie-ups to facilitate payments.
o Disrupted content streaming – Internet penetration has been rapid but the speed and
disruptions are still far from trustworthy. The reduced bandwidth and connectivity deter
students from online course.
o Language barriers in using online platforms – Vernacular is still the language of choice in the
hinterland of India. The policy of public education is to focus on regional language. There are
+50 languages with 1000 dialects and makes communication difficult. Retention and
stickiness are affected if the language is not in the comfort zone as comprehension levels
remain low even if student might be able to read. The only seeming solution is translating the
courses in the major regional languages to improve student loyalty and result
Subsector of the Edtech Space

Market Sizing – of each sub sector

Reskilling & Test Reskilling & Test

Online Preparation, Online Preparation,
Learning , 17% Learning , 17%
38% 38%
Higher Higher
2016 Education, Education,
13% 2021 13%
Primary &
Secondary Primary &
supplement Secondary
Language & Language &
education, supplement
casual learning casual learning
30% education, 30%
, 2% , 2%
A. Primary & Secondary supplemental education

§ The market has select large players and new smaller entrants with innovative business
model.
§ The players have largely adopted model a B2C model and C2C model is gradually becoming
prevalent through smaller practices
§ Courses are offered on subscription basis with options to customize the type of content to be
subscribed
§ C2C platforms operate on revenue sharing model, where the platform receives 15%-35%
fees paid by students and remaining goes to content generator
§ The online content is consumed through : Laptop (88%) and Mobile (72%)
§ Academic background of higher secondary level: Science-86%, Commerce-13%, Arts-2%
§ Future outlook:
o Players are receiving demand from overseas
o New age learning techniques are sought after
o Value added services such as career counselling and progress tracking could further
increase adoption

B. Test preparation

§ Highly fragmented market with multiple smaller players for specific exams
§ The players have largely adopted model a B2C model and C2C model are limited to
community problem solving and query resolution
§ Test prep modules contain webinars, video and textual content; a popular course is the mock
test series
§ Courses are offered on a subscription basis per course
§ Engineering, medical and government services are the top most course preference
§ Students prefer laptop’s whereas working professional prefer mobile as a form to consume
the online content
§ Future outlook:
o Growth is expected from Tier 2/ Tier 3 due to limited options available in these areas
o Online centers will open offline touch point to students moving to the trend of hybrid
model
o Players in this segment are looking for online options for overseas market

C. Reskilling and online certification

§ Market is oligopolistic in nature with few large players accounting for majority of the share
§ Significant presence of international players in India and Indian players in other markets
§ Largely is B2C dominated, but with companies emphasizing on training will likely shift to a
larger B2B play
§ Courses are 3-6 months duration which are delivered through instructor led sessions, live
projects and case study modules
§ Subscription based model with value added services such as recruitment assistance gaining
popularity
§ Consumption of technology related courses are highly adopted across all tiers, certifications
related to business management is highly prevalent in tier 1 cities.
§ Laptops are the preferred mode of content consumption with working professionals have easy
access to laptops / PC
§ Future Outlook:
o With rise in disposable income and need for employees to distinguish themselves will
fuel adoption of this category
o Highly customized product offering for specific industries
o Players in online education space can expand intp this category as a value addition

D. Higher Education

§ Early stage in India currently and private universities have started offering online degrees
§ Presence of B2C players and aggregators, serving as platforms for prospective students to
interact with online universities
 § Post graduation courses have higher adoption as compared to diploma courses
§ Tier 1 cities have higher adoption of innovative courses whereas tier 2 courses are for
enhancing employability
§ Future Outlook:
o Limited to theoretical content currently, move to virtual classrooms concept could
enhance the practical component
o Any regulatory framework changes could potentially enhance the growth of this
category

E. Language and casual learning

§ Highly fragmented with high potential for newer niche players

§ Dominated by B2C with some cases of C2C where platforms act as enablers for students and
trainers
§ Language learning courses have seen higher adoption as compared to hobby related courses
§ Course fee model: users charged upfront subscription fee; freemium model is applied for
basic courses to gain users and then moved to subscription fee model for advanced courses
§ Pay as you go model is also gaining traction as users pay for the duration of content
consumed
§ Advertising revenue is a major revenue source as well
§ English Language learning modules are preferred in Tier 2 cities with laptop being the
preferred device
§ Future Outlook:
o Propensity to pay may remain low
o Advertising could continue to be key revenue drive

Investments and Exits in the space:

Further details about investments exits and active investors in the space in :
../Downloads/EdTech-India-TracxnFeedGeoReport-21Apr2020_1587560479741.pdf
Trending in the Edtech space

1. In current scenario, professionals are required to re-skill themselves every 3-4 months to
remain relevant in their evolving job roles. E-learning penetration in corporations is
increasing.
2. The government is adopting a series of measures to bring a technological revolution to
accentuate e-learnings
3. Majority of edtech startups today offer products in a rich multimedia package apart from
pictures or text. Given the fact that the share of video consumption to the total internet traffic
is slated to rise
4. Technology is used for valuable data driven insights for enhancing the learning. Technology
including big data, machine learning and AI will allow for more in depth personalization of
content. Students interact with the online technology leaving a digital footprint informing the
learning analytics
5. Immersive education encompassing virtual, augmented and mixed reality brings immersive
experience
6. Automated and flexible school system as more smart tools are incorporated such as face
recognition attendance, automated heating/cooling systems and security systems.
7. Emerging hybrid channel business model that may emerge in the future:

COVID-19 impact on the sector

Following the spread of the Covid-19 virus, edtech companies are taking online education.
- Inflection point for the industry
- Sharp rise in new users for edtech players
- Professionals are utilizing this time saved from WFH are using to upskill
- 15% jump in online users who have enrolled for cyber security, cloud, devops, AI and data
sciences
 - The sector has received new impetus as students from all walks of life have to adopt online
learning as new way of life.
o Vedantu has seen 10x growth in user sign ups since the outbreak
o Toppr has seen 100% m-o-m increase in the number of students
- Edtech firms are leveraging the occasion by offering free online classes or attractive
discounts
- Going forward, education will be likely integrated into mainstream education
- Fast - track customized learning solutions for interactive and immersive learning
- Market predicted to grow manifold at the back various policy initiatives that will potentially
might be implemented soon

Sources:
1. https://assets.kpmg/content/dam/kpmg/in/pdf/2017/05/Online-Education-in-India-
2021.pdf
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dividend-as-schools-univs-go-online/articleshow/74782879.cms?from=mdr
3. https://www.forbes.com/sites/bernardmarr/2020/01/20/the-top-5-tech-trends-that-will-
disrupt-education-in-2020the-edtech-innovations-everyone-should-
watch/#2fe63ac02c5b
4. https://www.entrepreneur.com/article/341676
5. https://smartceo.co/glimpse-indian-ed-tech-landscape/
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learning-space/
7. https://www.entrepreneur.com/article/335744
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platforms-slowly-changing-indian-education-landscape/articleshow/68850167.cms
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2019/#Here_are_top_7_trends_for_Education_Technology
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2019/#Here_are_top_7_trends_for_Education_Technology
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12. https://medium.com/the-edtech-world/edtech-landscape-743716608675
13. https://www.indiatoday.in/education-today/featurephilia/story/covid-19-impact-digital-
education-conventional-education-divd-1661185-2020-03-30