Test prep moves online

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Fast-forward to 2019 and multiple companies have raised large rounds. Online tutoring platform Vedantu raised $42 million in a Series C round led by marquee investors Tiger Global and Westbridge Capital. Rival platform Unacademy, meanwhile, raised $50 million in a Series D round that included VC firm Sequoia, which also has a significant stake in Byju’s.

Similar to how Byju’s has expanded to cover every stage of learning, today’s Indian edtech companies also exist across every level of education. While the K-12 space served as a launchpad for Byju’s digital explosion, others have zeroed in on different market segments.

Take the aforementioned Vedantu and Unacademy, for example. The two companies want to take India’s test prep market online. This won’t be easy, though. The companies they seek to displace—India’s offline coaching centres—have built their reputations over decades. We wrote about this in a piece earlier this year:

“Offline coaching institutes work on the principle of exclusion—high course fees, entrance exams, the need for physical proximity and 9-12 month lock-in periods. Online platforms, though, are turning this on its head.

Without any physical trappings, online coaching platforms can widely expand on the 1:35 offline ratio between students and tutors, and extend access to many more students in search of quality coaching. There are no benchmarking entrance exams to act as barriers, and there’s even the flexibility of bite-sized courses with lower pricing.

The convenience—of price, variety and logistics—has immense potential to disrupt the old guard.”

No stone unturned

Today, even the offline coaching centres that Vedantu and Unacademy set out to disrupt are waking up to the need to move online. Aakash, for example, the brick-and-mortar coaching behemoth that controls 5% of the $6.6 billion offline coaching market, wants almost 25% of its business to be digital by 2023. We wrote about this shift, too.

The beauty of the Indian edtech space—and why it is so critical for offline players as well—is that it increases the funnel size for user acquisition drastically. Class sizes are no longer governed by physical limitations, and learners can now plug in from rural areas of the country. The potential to scale is tremendous.

Importantly, with advances in machine learning and artificial intelligence, platforms such as Vedantu are also able to narrow the gap between physical classes and digital ones. Through their AI/ML technology WAVE, Vedantu is able to make learning sessions interactive and allow for real-time interaction between students and teachers. As we wrote in our piece on the company:

“The technology helps break up classes into “hotspots”—the tutor can click any part of the concept on the screen and create a multiple-choice quiz on it. The WAVE user interface also features a sidebar chat window, allowing for real-time questions and feedback.”

While test prep and K12 may seem like the most obvious segments, there are many companies identifying far more niche areas to operate in. The likes of upGrad, Great Learning, and Eruditus, for example, have hitched their wagons to the upskilling opportunity. Targeted at professionals looking for a leg up in their careers, these companies offer a variety of short-term and longer-term courses as well as executive education courses.

As we wrote in our piece on the various companies battling for the upskilling pie:

“All of these players are counting on one thing—going forward, learning will be a priority that lasts well into one’s professional life. There’s proof for this as well. Degrees alone simply do not cut it anymore.

Improvement In Stats

Several reports have talked about India’s IT skills deficit. According to a report by industry bodies FICCI and NASSCOM and professional services firm EY, 40% of India’s IT professionals need to reskill to stay relevant. In addition, the report states, 37% of the Indian workforce will be deployed in jobs that call for advanced skill sets. As such, the upskilling and certification market—already worth $93 million as of 2016—is expected to be worth $463 million by 2021, according to a report by professional services firm KPMG. A sizeable pie to play for.”

Other companies, meanwhile, have not gone after segments but rather aspects of education. Like Doubtnut and Brainly. Both companies, the former Indian and the latter Polish but with a sizeable Indian footprint, realised that solving doubts is at the core of any learning process and have turned that need into thriving businesses:

“Doubtnut says it receives 200,000 mathematics doubts every day. It has 7 million monthly active users, with over a quarter of these using the platform daily. Till date, Doubtnut has raised around $3.3 million from marquee investors.