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Educational technology or Edtech or Edutech is a buzzword that is heard nearly everywhere in the tech sector today. Edtech deals with facilitating learning and improving performance by creating, using and managing appropriate technological processes and resources. (Richey, R.C. (2008). “Reflections on the 2008 AECT Definitions of the Field”).
The fact that education is important is very well known across geographies. From the remotest of villages to bustling cities, education plays a major role in defining how the lives the inhabitants pan out.
Governments and non-governmental organizations alike have been helping people get the education they need no matter where they are. However, specialized education requires infrastructure.
This infrastructure may be lacking in many small towns, causing inhabitants of smaller cities to either have to move to cities with better educational facilities, or to make do with what is available.
With the advent of the internet, the education sector was able to penetrate hard-to-reach areas that were earlier considered out of their scope. The era of tablets, mobile phones and the availability of the internet at the remotest locations of the world has bolstered this effort and has given rise to an entirely new industry – Educational Technology.
Students in remote areas can now attend courses that were previously unavailable to them due to financial, geographical or other limitations.
Schools that earlier had to turn down students due to the lack of qualified teachers or manpower can now leverage the power of the internet and Edtech to provide relevant, quality education to the masses, empowering them like never before.
Read to know about the Business models Impacting Edtech Industry!
Financials
As the Edtech market is poised for growth and is gathering interest from investors and the government alike, this is the time to step into the education sector. According to NASSCOM, with a year-on-year increase in funding and a growth of over 108%, investment has more than doubled from USD $2 billion in 2017 to over USD $4.2 billion this year.
Late stage startups alone saw a 250% growth in 2018, with funding increasing from a mere $847 million to over $3 billion in 2018. This is the time for startups to invest in their ideas and join the Edtech bandwagon.
Key innovators
Several tech start-ups have started to add impetus to this movement by creating products that provide creative and innovative solutions to common problems faced by the education industry. As these companies started creating creative and innovative products, there emerged some with solutions that stood out.
One of these companies is the well-known Edtech start-up, Byju’s. What had started as a company that used technology to help CAT (a management school entrance exam in India) aspirants crack the tough management exam by understanding the core concepts behind the exam has transformed into one of India’s largest Edtech companies providing Education to those who need in a way they can understand it best.
With thousands of active, paying users and a free online app, Byju’s influence in the Edtech sector is only growing. Byju’s is driven by Byju Raveendran and his 2000+ strong team of teachers, developers, and innovators that continue to create innovative learning solutions for students and professionals.
With a market valuation of over $3 billion and a recent funding round of $540 million has spearheaded Byju’s into becoming the top five most valued start-ups in India.
With its current round of funding and the current market valuation, Byju’s is one of the most valued online education technology firm in the world.
Another well-known name in the education domain is Coursera. Founded by two professors from Stanford University, Coursera is an online learning platform that boasts of over 33 million users and over 2,400 courses.
What started with providing specialized courses to individuals over the internet, Coursera now offers many online Master’s degrees from prestigious universities.
With over $146 million USD in funding till date, Coursera has expanded globally to become one of the very sought after Edtech startups.
Udemy is another well-known Edtech startup. Following a completely different business model compared to their Edtech peers, Udemy is a collection of tutors offering courses on the Udemy website to students. With a multi-tier payment model, Udemy initially bootstrapped its offering and finally ended up raising nearly $200 million from investors till date.
Udemy provides a platform for experts of any domain to create free or paid courses which can be offered to the public. Udemy provides tools to educators which enable users to create a course, promote it and earn revenue from tuition charges.
With a market capitalization of over $1 billion and estimated annual revenue of $28 million, Udemy is considered to be a knowledge delivery platform that rivals the traditional university system.
Digiexam is a Swedish startup that was based on the concept of students being able to take exams online or digitally. As modern classrooms were digital, but examinations were handwritten.
To solve this disconnected between delivery and final examination, Digiexam started in 2011 as an experiment recognized by the school the founders were studying at and soon was adopted by over 2700 organizations and 500 schools worldwide.
With over 33% of high school exams being conducted on Digiexam, this startup is poised for success. With $4.8 million in funding and a constant source of income from schools, Digiexam is geared for growth.
UpGrad is a relatively new player in the Edtech sector. Started in January 2015, UpGrad targets working professionals with online courses in entrepreneurship, digital marketing, data analytics and product management.
With bootstrapped investments from the founders, UpGrad is currently eyeing a $40 million external funding round. With estimated revenue of around $3.6 million, UpGrad is poised for incremental growth as they acquire companies and gear up for future growth.
All these giants in Edtech industry are following different business models that need to be looked after, before entering the edtech world.
Investor interest
Investors love the education domain. With a constant supply of consumers that are only growing by the day, Edtech is growing like never before.
With a 50 percent increase in the number of advanced tech startups in India alone, Edtech is poised to take the market by storm and investors are waiting for the next big disruptor in the education scene.
As innovators poise to try and disrupt the market, investors are ready to invest in ideas that will make a difference.
Why now?
A better question would be, why not? Education is a domain that needs innovators. With the advent of the internet, education can now truly cross geographical boundaries.
The market for Edtech is ever-expanding. Although traditional educational institutions have been leveraging the power of the internet in the form of E-Classrooms, that was limited to students joining a class without physically being there.
For the underprivileged and those that lack basic education, Edtech provides immense scope for innovation and there are those who need this innovation to help them succeed in life.
From entrance examinations to basic education, from specialized courses to special requirements, Edtech can solve problems that traditional educational setups cannot.
The possibilities of innovation in Edtech are endless. There are many gaps in traditional education systems that can be filled only with innovation. Get on the bandwagon and be the change you wanted.
How to – becoming the next disruptor in Edtech:
Edtech needs innovation, however, innovation does not mean improving existing products. Real innovation does have its rewards, however, creating an investable and a desirable startup is not easy.
While there were over 7000 startups in India in 2018 alone, not all of them were able to meet their targets or find a potential investor. Many startups fail at the outset as they are unable to define what their MVP will be.
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A major roadblock for startups is finding the right development team to transform their idea into a product. Innovators might not be the best planners. At Volumetree, we understand that limitation and offer services to innovators who wish to transform their idea into a product. We offer turnkey solutions that help you at every stage of your entrepreneurial journey.
Research
A potential startup must find a problem that they wish to solve. A good way to do that is to do thorough research. Without adequate research, an app or a product can fail to attract users and thereafter investors, no matter how innovative it may be. For example, many Edtech startups fail because they are run by engineers, and not teachers.
Without the prior knowledge and understanding of pedagogy, Edtech entrepreneurs need to master the art of teaching, which itself is not easy. Hiring teachers to help you understand the problem is a step in the right direction because if you do not meet your target audience’s need, you might never make it in the eyes of an investor.
Network
If no one knows about you and your app, you might never find the traction that you will if you attend networking events, education hackathons, and startup conventions.
Meeting new people and making new connections goes a long way in making people aware of what you’re doing.
Many angel investors and venture capitalists frequent these events, finding innovative ideas they could invest in.
Small product demonstrations and sessions in schools can go a long way in ensuring that you get the user base you need, from the section of society that you need. What spreads with the word of mouth can beat advertising any day.
Industry
The industry is always looking for new business ventures and avenues. With research budgets of large corporations mostly being under-utilized, many industries now offer a part of their research budget to startups if they are creating a product that these companies might find to be of use.
Government
The government has started education missions around the country. These drives to propagate education across the country gives rise to budgetary allocations that startups can potentially tap into. If your thought process is in line with that of the government, you just might be awarded a grant for research.
Public fund sources
Crowdfunding is a great way to ensure that your product gets the financial assistance at the outset so that you can continue to research and innovate. Communities have increasingly been very supportive of startups with innovative ideas, and education is one sector that nearly everyone would be interested in investing.
Volumetree was started as an idea that has finally borne fruit. We understand the pains a startup might have first hand, and the problems you may face as an innovator. With our experience, we can help you move from an idea to product with minimal pain and maximum output.
We can advise, guide, provide direction and assist you at each stage so that you focus on what you do best.
The education sector is growing and shows no signs of slowing down. As innovators work on ideas to create the next disruptor in the Edtech world, investors are on the lookout for what they think might click with students.
This has led to the creation of an entirely new economy, the knowledge economy. With the promise to build and develop skilled workers and create a competitive advantage for them, driving growth and the ability to enhance the efficacy of our learning system is the ultimate aim of Edtech. If it comes with the added advantage of capitalizing on it, so be it.
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