Even in the earliest records of history, group education has been a significant part of Indian society. In recent years, the education sector has grown tremendously in India with the entry of new systems and private schools, but in the context of primary school education, the biggest change came in 2002.
The significance of school education in modern India can be ascertained from the fact that the right to free education up to the age of 14 is enshrined as a fundamental right in Article 21A of the Indian constitution. The insertion of Right To Education (RTE) through the 86th constitutional amendment in 2002 is one of the most significant events in India’s recent history.
Although the overall state of public education in India is not exactly great, since the inception of RTE, the adult literacy rate in the country has jumped up by 13% from 61% in 2001 to 74% in 2018. At the same time, per capita spending on education in India is around $499 (Rs 32,500), which is approximately 4 times lower than the average of upper-middle-income countries.
On the other hand, the gap in quality of education delivered in private school and the public institutions is increasing every year, as per the Annual Status of Education Report (ASER). The woeful state of the education system is seen in the report’s findings that among fifth-grade students only 23% could solve a simple division problem in government schools, while this number was 40% in more expensive private schools.
A deeper analysis of the state of the Indian education market and its technocentric future is found in DataLabs By Inc42’s latest report — The Future Of India’s $2 Bn Edtech Opportunity Report 2020.
In recent years, increased internet penetration in India has catalysed the adoption of technology in educational institutions at all levels. The technology revolution in Indian education is primarily driven by startups focussed on providing technology solutions in education delivery commonly known as edtech startups.
Over six years (2014 to 2019) more than $1.8 Bn worth of capital has been poured into 194 unique edtech startups in India. The growing expenditure of Indians towards education along with the cost-effective nature of online education are two of the most important factors behind the increased investor confidence in edtech startups in India.ORDER YOUR COPY NOW
India’s Thriving Edtech Startups Get Funding Boost
When it comes to funding for edtech startups, the sector has hit a growth spurt in the past year. Even without the outlier funding rounds, the total capital inflow in edtech startups for 2019 was $283 Mn, 2x higher than the previous year’s $140 Mn.
The growing adoption of K-12 and test prep startups such as BYJU’s, TestBook, Vedantu and others have driven the high-value funding deals in 2019.
In 2019, K-12 and test prep startups such as BYJU’s, Unacademy and Vedantu attracted the most amount of venture capital funding. The combined capital inflow into the three startups for the year 2019 was more than $274 Mn.
Overall the dominance of these sub-sectors in the funding landscape of edtech startups has declined a little. The share of online test preparation startups to the total funding amount in 2019 was 66% ($284 Mn) out of the total $433 Mn plus in total funding amount for the year. Although, the share was relatively higher in 2018 at 90%.
BYJU’s Funding Boosts Bengaluru Ecosystem
Similar to the macro outlook of the overall startup ecosystem of India, the dominance of top three startup hubs — Bengaluru, Delhi NCR and Mumbai — is very much evident in edtech as well.
Between 2014 and 2019, the share of the top three startup hubs in total edtech funding amount and the deal count was 91% ($1.6 Bn out of $1.8 Bn) and 73% (221 out of 331 deals) respectively.
Going by the number of funding deals, Bengaluru emerged as the top destination for edtech startups in India for the year 2019. This was a change compared to the previous year when Delhi NCR recorded the most number of funding deals in edtech.
Overall the indicators of funding activity in edtech startups are showing positive signs for the three leading startup hubs. The chief indicator is that there was a 50% surge in the count of unique edtech startup investors in 2019 compared to the previous year.ORDER YOUR COPY NOW
How Edtech Will Revolutionise Learning in India?
In our latest report on the edtech market in India — The Future Of India’s $2 Bn Edtech Opportunity Report 2020 — DataLabs has detailed the six factors that are driving the edtech revolution in the country and helping transform the education and learning landscape. Of these, the three major factors are the higher penetration of smartphones, PCs and tablets, the rising online content consumption trends and finally India’s sizeable addressable market for edtech products and services in the form the high youth population.
The penetration of smart and connected devices in India is picking up pace. As per Cisco estimates, the number of connected devices is growing at a rate of 7%. On the other hand, the number of smartphone users in India is expected to double to 859 Mn by 2022 from 468 Mn users in 2017 growing at a compound annual growth rate (CAGR) of 12.9%, according to an ASSOCHAM-PwC joint study.
Wider penetration of both high-speed internet along with smartphones will create a sustainable network of digital users who are also consuming more and more digital content, beyond social media, online entertainment and ecommerce, creating wider opportunities for edtech startups.
Majority of edtech startups today offer products in a rich multimedia package apart from pictures or just text. Given the fact that the share of video consumption to the total internet traffic is slated to rise from 58% (2017) to 77% (2022), the traction of the online educational content in India is poised to grow exponentially in the coming future.
Finally, with a working-age population in India of more than 67% of the total population, the market offers great opportunities for reskilling, skill development and upskilling. The right tech skillsets and certification are the two most important parameters for tech employment and the demand side of edtech is robust in this regard thanks to the rising unemployment in India.
These three factors have exponentially increased the capitalisation opportunity in Indian edtech. This is seen in the business done by edtech startups in the previous fiscal. In FY 2018, the gross merchandise value of edtech startups was above $120 Mn was a surge of 48% compared to the previous year. This indicates that edtech startups are poised for bigger growth as the market conditions and reception for edtech products and services increases.
DataLabs has analysed the future of educational technology and has recorded the growth prospects, the market and consumer-related insights from the booming Indian edtech market in its latest report — The Future Of India’s $2 Bn Edtech Opportunity Report 2020.ORDER YOUR COPY NOW