Rise and Fall of the Indian EdTech Industry

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The downturn always follows the upswing. Even though this is not the end of EdTech, we are now at a turning point. Big goals and a lot of fuel were the norms for EdTech platforms in the previous two years. But the celebration is gradually declining as even the largest companies in the industry seek stability.

The online education industry gave birth to six unicorn companies between September 2020 and June 2022. These companies include Unacademy, Eruditus, UpGrad, Vedantu, Lead School, and PhysicsWallah. Before these two years, India has only ever seen one unicorn, BYJU'S.

Every sector of the online education industry, from K-12 to skilling to test preparation to non-curriculum EdTech, survived despite the pandemic. For a time there, it appeared like this harbinger event may speed India's movement toward a permanent EdTech future.

The rise in India's EdTech Sector

The COVID-19 pandemic provided the impetus for this shift toward more digitization.

Because of the pandemic, traditional classroom instruction would continue even while new methods of instruction, including online learning, were implemented.

EdTech refers to the collection of educational technology that enables this change. The growing availability of mobile devices is a key driver in India's educational technology (EdTech) and "smart classroom" markets. Furthermore, the widespread accessibility of the Internet and its users has boosted the need for EdTech services.

What would have taken years to develop into its current form, if the EdTech industry matured in a couple of months? The rapid COVID-19 pandemic breakout caused havoc in the classroom.

It shook up the educational system worldwide, so schools must make adjustments. They chose online classes so their kids wouldn't have to miss out on any schooling.

The rapid transition to online education has accelerated the pace of technological development. However, scaling issues, slow performance, and security concerns all arose due to widespread technological use. This presented a massive obstacle in a country like India, where millions of schools exist.

Indian Edtech

India has one of the largest educational systems in the world, with a population of over 250 million students in over 1.5 million classrooms with 8.5 million instructors. Their socioeconomic origins are quite different. The gap between those who had access to technological solutions before the pandemic and those who did not simply widen throughout it.

However, the pandemic accelerated several significant changes occurring in the global economy. To survive, businesses needed to join the digital revolution. By making their courses available online, several schools have effectively eliminated geographical barriers to education.

Trusted Outsourcing partner

Those who fund Edtech, those who research it, and those who put it into practice should all keep student learning front and centre as they implement various Edtech solutions. When introducing new EdTech, it shouldn't take into account a student's family's financial situation.

Due to the unexpected development of the pandemic, schools that had the means to do so opted for online education to prevent students from falling behind in their studies.

The pandemic benefited this industry since a significant portion of the nation's $180 billion education sector moved online. Companies surfed the wave of success in online education over the past two years as investors placed large bets on the phenomenon linked to the pandemic.

Increased funding of $4.7 billion in 2021 by Indian ed-tech firms from $2.2 billion in 2020.

After e-commerce ($10.7 billion) and financial technology ($8 billion), the Ed-tech area became India's third most financed sector.

The Downfall of the Indian EdTech Sector

Startups in the EdTech industry have been affected by more than just the financing winter and the return of students to the classroom. Uncertainties, including lack of profitability and significant acquisition expenses, were pushed to the background during the boom of the last two years.

Edtech platforms are experiencing a temporary crisis as raising capital and contacting students becomes more challenging. Compared to 2021's total, funding in 2022 is only at a third-year level, although over half the year has passed.

Others are undergoing layoffs owing to the misguided growth strategy of recruiting consumers at any cost without caring about long-term viability, while the few major EdTech businesses that can afford a wait-and-watch approach are now cutting back from capital-intensive models.

Numerous EdTech unicorns, including Unacademy, WhiteHat Jr., Lido Learning, and others, have been laying off staff in recent months. Many EdTech startups have reduced staffing levels due to the worldwide financing shortage. There were 600 layoffs at Unacademy, 624 at Vedantu, 145 at Frontrow, 20 at Intact Metaversity due to a disagreement between the company's founders, and 30 at Eruditus.

The Hybridization of Education Could Boost Sales

Even though the Indian EdTech industry appears to be struggling with a financing freeze, falling demand, widespread layoffs, and closures, some businesses have managed to remain ahead of the curve by diversifying their product lines and experimenting with hybrid business models.

For instance, in a bid to expand into offline tuition centres by 2022, EdTech giant BYJU'S paid $1 Bn for Aakash Educational Services (AESL) in 2018. However, this is nothing new for the namesake firm, which initially operated as a traditional coaching centre before expanding into the online education market.

After establishing a solid online presence, businesses across industries, not just EdTech, are increasingly adopting hybrid strategies. The firm will gain greater credibility with customers if they put in the effort to develop a physical presence, even though internet branding is less expensive and faster.

However, scaling the hybrid approach can be challenging, especially for fledgling businesses.

BYJU'S, which has deep pockets and counts the well-known Aakash brand among its own, could be able to make this strategy work. But for other EdTech businesses, the costs of establishing a physical presence will be far higher.


Whether through price or results, generating value for consumers will be essential to achieving success, as well as developing a sustainable business model that includes a route to profitability. And the only EdTech firms that will be successful over the long run are the ones that achieve this goal through innovation or strategic planning.

In terms of LMS development, our team at LN Webworks provides excellent services You can give us a call because who knows you will be the next Edtech unicorn.

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