Why Investing in EdTech Startups is a Great Idea

Edtech leverages investors to integrate profit with purpose


Education is the most important sector of the global economy that has been undergoing tremendous change in the era of technology. The sector has been witnessing digitalization to deliver more efficient and engaging content using artificial intelligence and automation. Education is a stream where there is little space for technologies to enter as it is the most traditional sector across the globe. However, COVID-19 has forced education to turn towards digitalization. The tread has transformed education technology to Edtech to the mainstream.


COVID-19 and the Edtech

Before the pandemic hit, online learning just complimented the traditional learning process. In other cases, it substituted live tutors where there was no other way to access them. During the crisis, having left without any alternative, online learning has become a norm in the educational sector. This in turn generated the growth of new and comfortable Edtech solutions taking the education sector ahead of ten years. Though there is resistance among the educators and students due to insufficient resources or by any means, Edtech is firm on the lines of exponential growth in situations such as a pandemic. Edtech has the ability to make the process of education more engaging, effective, and simpler.


Edtech and opportunities to investors in India

Edtech has exponentially grown in India with more than US$5 billion in private equity investments over the past five years. This makes it a huge industry to invest in for great profits. The two major companies which were startups prior, Byju’s and Unacademy are already billion-dollar hubs of Edtech. Nearly 4,500 startups are operating in the sector of Ed-tech in India as of now. According to the RBSA Advisor’s report, this education industry is expected to grow up to US$30 billion in the next 10 years from the current market size which is around US$800 million.

With pandemic, online schools and work from home have been a new culture in the post-Covid 19 eras. As per the report by The Ken, within a year, Byju’s alone added 20million new students to its online-based learning taking the tally up by 64millions registered students currently.

The main reasons behind the adoption of Edtech across India are growing internet users and Smartphone users. Edtech has the power to transform India by adopting online platforms delivering content to all sections of the country. This can also help in bridging the digital gap between the haves and have-nots.

The Government of India realizing the power of Ed-tech launched several e-platforms to boost the educational sector such as Skill India, Swayam, Sankalp, Strive, Diksha, and National Digital Library. Currently, K-12 is the largest segment within Edtech in India that is following online test preparations and issuing certificates.

According to a report by PGA Labs and IVCA, Edtech in India is estimated to grow from $117billion to $225billion by 2025. The current Ed-tech will keep evolving bringing out products such as customized learning for a better experience for the users. This can leverage investors to invest in the sector to integrate profit with purpose.