Indian online education companies race to dominate the global Edtech space

Indian edtech startups are challenging the hegemony of US-based online education companies in a bid to grab the lion’s share of the global edtech market.

The global education market in 2021 was pegged at $106 billion, according to Grand View Research, and Indian education startups are stepping up their global game to increase their share in the sector.

What’s behind the global ambitions of local startups?

Local education startups – course providers such as Scaler, Byju’s, Emeritus and Simplilearn, or education infrastructure startups such as Teachmint and Classpass – are looking for global expansion after the rapid adoption of digital education services in India.

Moreover, companies are also emboldened by an abundant flow of venture capital last year.

Indian education startups got about 8.5 billion investments between 2014 and 2021, with about half of that last year, according to data firm Tracxn.

Today, with their huge war chests and ability to keep costs low by operating from India, Indian startups are looking to enter other markets, including the United States, as opportunities in the sector do not exist. represent only a fraction of what is available in the world.

Markets where Indian startups are expanding their businesses

Indian education startups are now battling for global e-learning dominance from US-based companies including Chegg, 2U, Udemy and Coursera.

Not only are Indian edtech companies eyeing the domestic market of US companies, but they are also taking the battle to other geographies, including the emerging digital economies of Southeast Asia, the Middle East and India. Africa, where these companies operate.

American online education companies are also looking to expand into India, as the country is home to the second highest number of internet users in the world.

Indian edtech startups in the US and other markets

Bengaluru-based online education startup Scaler Academy, which trains tech professionals in software development and data analytics, has sold courses worth $1 million in the US in April, about a month after its launch there.

The response it got in the US is significant for Scaler Academy, as the company made around $5 million in April in India, where it started in 2019.

Another Indian edtech start-up, Byju’s, has spent around $750 million since 2019 to buy three education companies in the US – e-reading platform Epic; Tynker, a coding platform for K-12 (K-12) students; and Osmo, an app creator for kids.

The company is also said to be in preliminary talks to buy US-listed Chegg and has also approached 2U.

In another Indian investment in the United States, professional learning startup Emeritus, valued at $3.2 billion in its last fundraising round, spent $200 million last year to buy iD Tech, a STEM education provider.

The companies are also tapping into markets in Southeast Asia, the Middle East and Africa.

Great Learning, a subsidiary of Byju, has purchased Singapore-based executive education company Northwest Executive Education for $100 million.

The company has also entered into an agreement with the Qatar Investment Authority, an investor in the company, to set up a subsidiary in Doha to serve the Middle East and North Africa.

Additionally, digital classroom technology provider Teachmint and Classpluss, which sells tools for educators to create online content, have also entered Southeast Asia in the past six months.

Challenges for Indian startups

“Ed-tech” became a buzzword after the onset of the pandemic in 2020, as students began to register on platforms offering various forms of online coaching.

Educational technology companies took the opportunity to raise large sums of money to fund the venture, aided by widespread narratives about the “new normal”. The funds were used to aggressively increase sales, develop products, hire teachers/content creators, and acquire other edtech companies.

In this quest for growth, several Indian ed-tech companies have faced various allegations of using coercive sales tactics, mis-selling, misrepresentation, low-quality content, etc., which has led the intervention of the Indian government in the sector.

The government is now planning to regulate online education in the country. He has already demanded that online platforms that partner with Indian universities to offer courses be vetted by the regulator.

Additionally, companies have embarked on a wave of acquisitions to diversify their offerings and grow inorganically. The pace and valuations at which acquisitions took place indicated the strong expectations for growth in the ed-tech space. However, after billions of dollars have been poured into the ed-tech space, the education technology sector seems to be slowing down in India.

SoftBank-backed unicorn Unacademy, which has laid off around 1,000 people, has decided to end its global test prep business.

Byju’s, the world’s most valuable $22 billion private online education company, has laid off about 500 people.

The company, which was in the process of raising funds last year, has reportedly struggled to close a new round as commitments from Sumeru Ventures and Oxshott have yet to be made.

The fundraising problem is likely to force some startups to scale back aggressively and save their capital for a rainy day.

Additionally, companies will face fierce competition from local edtech startups in global markets.

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