Glimpse into the Indian ed-tech landscape

Glimpse into the Indian ed-tech landscape

Indian ed-tech investment has seen a gradual increase with new players such as Reliance entering the space, signalling untapped potential

The intersection between educational content and interactive technology is the sweet spot that ed-tech companies in India are targeting. As these companies race to grab the time and attention of students and stakeholders (parents), venture capital firms are slowly crafting their investments in this space.

Until recently, investments in the sector had been humble owing to lack of successful exits by investors. “Ed-tech wasn’t seen as the flavour of the season because it’s an unglamorous space to invest in. That being said, there is now a lot of untapped potential,” says Sunitha Viswanathan of Unitus Ventures. Going forward, the fund targets investing one third of its money into education, as a stated goal.

If we look at data from the previous year, according to a NASSCOM Zinnov report, 2017 saw an 18 per cent increase in the share of startups working towards education inclusion. This inclusion or market penetration is still miniscule in India, which has a 250 million plus student population in the K12 segment. But, there is certainly a demand with a rising trend towards online learning in the form of certification courses and reskilling programs.

How are established players growing?

BYJU’S, Unacademy, Cuemath and Toppr are some of the very few growth-stage companies which have gone on to raise Series B funding. The investors in the space are primarily Sequoia India, SAIF partners and CapitalG to name a few.

Mainstream learning through schooling continues to the primary mode for learning so ed-tech companies are looking to add value as a supplementary product to what students already learn at school. “We believe that teachers are important and we are, in a way, replacing teachers,’ says BYJU’S, which became a unicorn in March 2018 (India’s first ed-tech company to become one).

The classic debate: B2B vs B2C

With ed-tech companies looking to supplement school lessons, it seems natural that both the players can work in tandem to enhance students’ learning. However, there is general scepticism with this approach. “Selling to schools is a thankless job, convincing the school management in an arduous task,” says Parag Dhol of Inventus Partners, who is a charter member of TiE Bangalore. As a result, the potential in delivering quality education is not reached. “In B2B ed-tech space, there is the risk of these companies becoming merely vendors to schools,” says Hari Krishnan of Astarc Ventures, which has invested in Unitus Ventures (formerly Unitus Seed Fund).

On the other hand, in the B2C model, the biggest challenge lies in managing the high customer acquisition costs. Reaching out to new customers incurs heavy expenses on marketing and campaigns front. Further, to separate themselves from regular content, ed-tech companies need to design content to supplement what students learn at school.

What has the ed-tech unicorn done differently?

BYJU’S collects data points from its users to customise the learning modules. Based on the user data, ‘educational experts’ from the company call up students regularly to assist them in choosing learning packages. This two-fold approach, using technology to create interactive modules and collecting data to individually customise packages, echoes the growing trend of targeted content by ed-tech companies.

Gamification or application of game mechanics to incentivise learning is becoming popular among children in the K8 segment. The company launched the ‘Math App’ for students in class 4 and 5 to convey mathematical concepts using graphs, animations and games. “What has worked for us is that the content and media team has a solid foundation in the concepts. They are engineers who have subject-matter knowledge and not just design background,” says BYJU’S spokesperson.

The entry of a conglomerate

While the ed-tech space has not shown major returns so far, it is now gaining buzz as a promising place with a certain goliath entering the market- Reliance Industries. In April 2018, RIL invested US $180 million for a 72 percent stake in Embibe, an artificial intelligence-based educational platform. Embibe offers assistance to students in the test preparation market space for entrance exams.

The future trends

Online learning is gaining traction with the increase in market penetration and growing number of smartphones. Online education is expected to grow eight times of what it was in the previous year, as per the ‘Online Education in India: 2021’ report published by Google and KPMG. What is interesting to note is that this manifold increase is not due to patterns in key metros. Rather it is a projection based on the content consumption noted from Tier 2 and Tier 3 cities. This shows a promising sign for the ed-tech space, a market that is currently in the nascent stages in the country.


  • 18% increase in share of start-ups operating in educational inclusion
  • Reliance industries bought a stake in Embibe for $180 million in April 2018
  • Online education to grow 8x by 2021 compared with 2017