The Future of Ed Tech Startups In The Wake of The New Offline Normal

The ed startups in India saw an unprecedented rise in their demand and popularity as the country went on a nationwide lockdown on March 25, 2020. When the pandemic was supposed to be a tough year for all the entrepreneurs out there, the edtech industry in India alone raised a whopping $2.2 billion with Byjus singlehandedly raising over $1 million out of it.

2020 for that matter can be considered the year of ed-tech in India with a plethora of startups mushrooming in the market. However, two years after the pandemic, things have started to get back to the new normal where students and aspirants of the various competitive exams have been embracing the offline journey.  

It is time for the ed-tech startups to come a full circle by tapping into the offline market which a lot of them have left unattended within the comfort of online classes and management.

The startups in the education technology field that reeked $11.7 billion in the first quarter of 2022 in funding only saw $3.4 billion flowing in the month of April without any Unicorns being produced. While in May, although the country saw the entry of its 100th unicorn, the ed-tech industry only saw $1.6 billion coming in with a drop of 53% on a monthly basis.

Venture Capital firms including Sequoia and Y Combinator have already announced alarm bells warning startups to cut costs and increase runaways. The market situation is pushing these startups to go hybrid now more than ever before.

This article will look at some of the ed-tech startups and their plans to soft-land into offline classes again while making sense of the current market scenario of the industry.

List of Edtech Startups Planning to Enter the Offline Market
The Other Side of the Emerging Market Situation

List of Edtech Startups Planning to Enter the Offline Market

Byjus

The growth of Byjus over the years in general and during the pandemic, in particular, have been phenomenal. In 2020, it became the highest valued startup in India at over $22 billion.

Byjus has relaunched its offline classes in and around the capital already. With the offline classes and the pre-recorded online tablet classes costing the same, the startup looks forward to establishing more and more offline classes in the country.

Himanshu Bajaj, Head of BYJU’S Tuition Centre has made it clear that the firm is planning to launch 500 more tuition centres in over 200 cities across the country.

Unacademy

From beginning as a humble Youtube channel to revolutionising the very idea of online education, Unacademy has been a significant part of online pedagogy during the pandemic.

Within a span of two months, the startup grew from being valued at $2 billion in November 2020 to reaching $3.4 billion in August 2021. Unacademy has also made announcements of the launch of its various offline classes across the country.

On 8th June 2022, they launched their offline classes for NEET, IIT - JEE and other foundation courses for students from classes 9-12 at their Unacademy centre in Delhi.

During its launch, Co-founder and CEO Gaurav Munjal said, “We are confident our foray into physical learning centres with the best curriculum at a competitive pricing will help learners in cracking their goals and look forward to scaling them up across India”. The startup aims to enrol 15000 learners across its various centres in Kota, Bengaluru, Jaipur, Chandigarh, Ahmedabad, Delhi and Patna

Physics Wallah

It is the latest entrant into the unicorn club by receiving $100 million in its maiden funding led by WestBridge Capital and GSV Ventures in May 2022. This ed-tech platform that helps students prepare for various competitive exams was founded by Pandey and Prateek Maheswari in 2016.

Currently, they employ 1900 people including 500 teachers and 100 tech experts. This is apart from a versatile group of associate professors who would be answering the queries of the students online.

Physics Wallah plans to open 20 offline centres in 18 cities. They plan to enrol at least 10,000 students for the 2022-23 academic year.

Imarticus Learning

Imarticus Learning was launched in 2012 with the goal of training individuals to transfer careers in the fields of financial services, analytics and AI, business analysis and core technology.

By closely working with the demands of the industry, this ed-tech startup has been able to attract a lot of students as they collaborate well with relevant players in the market like IBM, KPMG, Genpact, Rise Mumbai by Barclays, Moody’s Analytics, Motilal Oswal etc.

They use dynamic technologies and learning methods to train their students. However, the post-pandemic wind has laid this startup a little low as well. So as to maintain its hold even in the offline educational situation, the firm is planning to launch more offline centres in tier 2 and tier 3 cities.

The CEO Barshikar opinionated that “There are numerous advantages of the hybrid model. You can cater to a larger audience and often give learners an option to pick what suits them best”.

The Other Side of the Emerging Market Situation

The market scenario does not look great for ed-tech startups as classes worldwide are retreating back to complete offline classes. Switching to offline mode also means that the capital and competition involved are going to skyrocket.

Investors have started to demand proof of profitability over revenue generation possibilities. At a time when investments from VCs and other investors are crunching, the demands of the situation will only make things difficult for the ed-tech industry.

The anxiety inherent in the situation is seen clearly with the rampant layoffs that these startups have embarked on. Indian ed-tech startups have already laid off 6000 employees.

It is expected that the industry might see another 60,000 layoffs this year. Vedantu alone has laid off 1200 employees already. Unacademy had announced that they laid off 600 employees in April as a part of their cost-cutting initiatives.

This is apart from the 325 part-time workers that they had laid off earlier. Another leading ed-tech startup named Lido Learning laid off more than 150 employees in February 2022 as the financial crunch was too much.

Many startups are on the verge of closing down despite funding as their venture in itself loses its meaning in the offline world.

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Conclusion

There is no doubt in the fact that ed-tech startups have made a difference in the learning process that Indians were used to. They have played a significant role in reducing the digital divide during the pandemic. As schools and colleges are rolling out their offline classes, it is time for the hitherto online platforms to embark on the hybrid modes of classes. As investments dry up and offline classes reign, the future looks grim for ed-tech startups.

FAQs

Why do ed-tech startups fail

Many ed-tech startups fail to figure out the right business and revenue model which is one of the reasons that most edtech startups fail in India.

Why is the ed-tech industry booing

As all the schools were closed many edtech startups started providing quality education online which was the reason edtech startups started booming in India.

Is ed-tech profitable?

Yes, ed-tech is one of the most lucrative and profitable industries in India.