This message is an invitation to urge aspiring entrepreneurs to explore opportunities in the education and training sector – not just for altruistic reasons, because it is good for the country, but because it is also a very large market opportunity – a $100 Bn+ opportunity,
to be precise!
In his incisive and insightful book ‘Rebooting India – Realizing a billion aspirations’, Nandan Nilekani has devoted an entire chapter on why rebooting the education sector is critical. In his previous book, ‘Imagining India’ his thoughts on the subject are summarized in the words,
Few things are as wide-ranging in their impact on the economy as education. The collapse of our schools is a deep crack in India’s foundation, and it impacts everything from our health achievements and fertility rates to our economic mobility and political choices.
Understanding The Education Sector In India
India has one of the largest education systems in the world – nearly 1.5 Mn schools, 700+ universities and over 35,000 higher education institutes. Yet, there is no doubt in anyone’s mind that the real issues of concern are in the quality of education being provided by these institutes, magnified by the lack of quality teachers. Nandan cites a case of Maharashtra where, after an annual evaluation of teachers, 99% of Maharashtra’s primary teachers and 95% of its upper primary school teachers were found to be unfit to teach.
How well we educate our young will determine what role they are able to play in the global talent pool. If we mess this up, it won’t take long for our children, that we call our ‘demographic dividend’, to become our demographic challenge, and for no fault of these children that are passing through the corridors of our weak education system.
Given the vast scale of the country, and the adverse supply-demand ratio of teachers per se, and that good teachers are unlikely to go to far-flung areas, the idea that merely building more schools and enrolling more teachers will solve this deficit is wishful thinking. At any rate this is not a solution that can be implemented in one generation and robbing a generation of an opportunity at a better quality of life because the country could not fix its education system is criminal. Which is why, just like in healthcare, the education sector too has to be rebooted using technology.
There is an urgent need to urge aspiring entrepreneurs to explore opportunities in the education and training sector: Not just for altruistic reasons, not just because it is good for the country, but because it is also a very large market opportunity. The size of the education market in India is estimated to over $65 Bn. It you take into consideration ancillary activities like content and training, and test prep etc, the education market in India is estimated to be $80 to 100 Bn.
The opportunity is everywhere! Whether it is in core education or vocational training, skilling or test preparation, distance learning or online tuitions or even assessments, the opportunities are large. Concepts like flipped classrooms are innovations that need to be applied on the ground with high-quality execution of the concept in the local environment. No matter which aspects of the education sector you choose, you will immediately be able to identify several problems that are begging to be solved. And they need to be solved at scale to make a real difference to the nation.
This is also a sector that has strong support from institutional investors. VC firms like Fidelity, SAIF, Helion, Accel, Tiger Global, Mayfield, Kalaari, Matrix and Lightbox Ventures are just some of the funds that have made investments in education sector startups. A report by Edukwest indicates that over $56 Mn was invested in education startups the first half of 2015, with over 60 investors indicating interest in this sector. As a result of strong exit options via follow-on rounds by institutional investors, angel investors and angel groups too are keen to invest in startups. But it is good to understand the scope of challenges that the sector poses for startups and how to overcome these.
One of the biggest challenges that many past startups in the education sector have faced is of scaling up; particularly startups that were selling solutions to schools and colleges quickly realized the enormous challenges of convincing a school system to buy into new solutions, and even the most basic challenge of getting past the school gatekeeper to meet the decision maker. Only a very few startups were able to find innovative ways to scale up, with a number of high-quality innovations lingering on the sidelines as small-scale, local businesses. It is almost always hard to find investors for startups that have not been able to feel initial traction.
How Established Players Can Help Startups
Established players in the sector can be the best mentors and help incubate new startups. It is critical to harness the brainpower of entrepreneurs using technology to help solve the most pressing problems facing education in India. Many more such initiatives are required that bring together relevant enablers (investors, mentors, service providers, stakeholders, etc.) in the education sector with a view towards pooling and coordinating their assistance to identify and enable high-potential companies to increase their chances of success.
India’s tryst with universal education must not remain a vaunted ambition. It must be realized post haste. Equally, caliber of teaching and education must be realigned to global realities and market needs. India desperately needs more innovation and a more enterprising spirit in the education sector to address the challenges in the sector. India needs more entrepreneurs to enter the education sector and as established players, it becomes our responsibility to ensure that many more startups succeed in their enterprise.
Educomp has recently partnered with Applyifi to create an EdTech Funding Forum as a means to help, assist, groom or mentor startups in the education space. The Applyifi-Educomp EdTech Funding Forum is designed to assist and enable high-potential education sector startups to build a stronger foundation and help accelerate the pace of growth.