BENGALURU: The edtech landscape has been witnessing a rollercoaster ride since the pandemic, which led to a surge in online edtech start-ups and funding. Covid lockdowns shifted the focus to online from offline coaching centres. However, the trend reversed as the effects of Covid started fading. The online coaching and tuition companies stopped getting the generous funding they got used to during the pandemic, and many online start-ups that started during Covid had to shut down. Unacademy, Byju’s, Teachmint, Skill-Lync and Vedantu had fired many employees.
Now, these online companies have started focusing on offline centres. The fall of Byju’s, valued at $22 billion in 2022, has raised many questions including scope of online edtech and its future. Currently, Byju’s has over 250 offline centres. Other edtech firms like Unacademy, Cuemath and Physics Wallah are also expanding their presence offline.
Physics Wallah operates over 120 offline centres. The edtech company, which has a presence in online, offline and hybrid modes, became a unicorn in 2022, and its revenue in FY23 stood at Rs 772 crore. Over 2 lakh students are studying in offline centres.
Online to offline centres
Ganesh Mahadevan, Partner, thinksynq consulting, says it is disheartening that edtech firms wasted the tailwind provided by Covid, which did all the selling for this industry by getting a large mass of relevant target segment to buy into the service and try them for a sufficiently long time.
Mahadevan, who is also a mentor to several start-ups, says if there are major drop-offs from customers after trials, it only points to the product not delivering. “The question to ask then is whether the product is good enough for the students to move from classroom to online,” he adds.
As per market intelligence firm Tracxn data, there are 7,431 offline and 16,333 online edtech companies. Till August 2024, online edtech companies raised $223 million and offline firms raised $21.1 million.
Since many edtech start-ups are opening offline centres, has the online model lost its relevance? Mahadevan says moving offline doesn’t seem to be a strategic decision, the business edtech firms were trying to disrupt is being given a thumbs up by moving offline.
Rather than addressing the core product-market fit problem with online education, the industry is jumping ship. For a developing country like India, online education is truly relevant with its ease of access and low-cost delivery. Abandoning this ship is doing injustice to a large mass of not so rich student community who can’t afford high-cost offline education, he explains.
Hybrid learning model
Somdutta Singh, founder & CEO Assiduus, and Angel Investor, says a survey by FICCI says 70% of students prefer a hybrid learning model that combines online and offline classes. This preference is echoed by broader trends. A report indicates 82% of students choose hybrid learning environments over traditional models, highlighting effectiveness of integrating both formats. Benefits of hybrid learning are manifold. Research shows 73% of teachers believe hybrid learning increases student engagement, while 59% of students report feeling more motivated when using hybrid models. “Hybrid education allows students to learn at their own pace,” she says.
She points out that over 4,450 new firms entered edtech market between 2014 and 2019, and that prior to Covid, edtech start-ups raised $1.32 billion from 2014 to 2020. The post-pandemic environment has seen a major fall in funding, leading to a more cautious investment landscape. The sector must navigate these challenges while capitalising on the momentum gained during the pandemic.
Suresh Kalpathi, executive director and Chairman, Veranda Learning Solutions, says, the sector’s evolution post-Covid reflects broader dynamics of the industry. Kalpathi stresses on the importance of sustainable models that prioritise quality and adaptability. Education is not confined to a single medium, and even when online models were at their peak during Covid, we recognised that offline education would remain a vital part of the learning, he said.
As per him, offline centres doesn’t diminish value of online education, instead it complements. The hybrid model, which combines flexibility of online learning with the personal engagement of offline interactions, provides a well-rounded educational experience that caters to the diverse needs of our students, he said, adding that he sees a bright future for this sector. Experts says in addition to K-12 and entrance exam preparation, edtech platforms are diversifying their offerings to upskilling and professional development, with the market in India expected to grow from $93 million in 2019 to $463 million by 2024.
