Online education fad fades as schools reopen and funding dries up

Traditional schooling is back on track, forcing IT companies to embrace omnichannel even as venture capitalists tighten their purse strings

A good teacher strives to dispel the doubts of the stupidest student. Doubt clarification online courses are not a fix for this. Representative picture

As the pandemic clouds gradually fade, parents are eager to send their wards back to schools, where they belong. Edtech companies (educational technologies) are thus caught in a pincer movement – slowing demand and drying up of easy funds. The result is the large-scale firing of online educators, restructuring and adoption of the hybrid model – online education being offered alongside brick-and-mortar teaching workshops – in a desperate attempt to survive and stay relevant.

Academic learning has much more to offer than eye contact between teacher and student. There are also disillusioned parents who apprehend their pupils spending their time in front of the computer screen, surfing between education and entertainment.

Read also : As students return to school, India’s edtech companies are changing

Certainly, modern teaching toolkits (smart classrooms) have a lot to offer, but they are at best complementary to pedagogy delivered in the traditional way – the teacher explaining concepts with precepts and examples. The job of a good teacher is to simplify the most complex and abstract principle or formula.

A good teacher can transmit in two hours what could require 20 hours of self-study, after which the student may still have doubts. A good teacher strives to dispel the doubts of the stupidest pupil. Doubt clarification online courses are not a patch on here and now clarifications provided face to face.

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Online educators are also very disappointed with the promised Eldorado not found.

An analogy with telemedicine is necessary. Telemedicine is extremely useful in the event of an emergency and for patients whose doctor knows the story like the back of his hand, but it can in no way replace full hospital care. Likewise, for a child’s full growth into adulthood and beyond, old-world brick-and-mortar schools and colleges will always remain the only viable option. “Online education doesn’t even provide 1% of the physical school experience,” says Nikhil Mahajan, executive director of Career Launcher.

What VCs misread

Venture capitalists (VCs) seem to have misread the tea leaves for once. The assisted business revenue model must always come under scrutiny in their hands, as does the inevitable ripple effect that always intensifies competition. Working from home may be a sustainable option in some industries, but “learning from home” has been created in special circumstances by the pandemic. Alas! if only the edtech companies and their financiers hadn’t been swept up and missed the wood for the trees.

Mahajan also said raising $50 million was like a walk in the park for low-income businesses. Edtech startups were in a honeymoon phase for 24 months and a boom cycle happens every 5-7 years. When the tide turns, two out of 50 survive, he said.

Indian edtech startups raised $4.7 billion in 2021, up from $2.2 billion in 2020. This made the edtech space the third most-funded category of Indian startups, just behind the e-commerce at $10.7 billion and fintech at $8 billion. But they are now laying off hundreds of staff amid a funding crunch and higher post-pandemic customer acquisition costs.

Read also : As markets bite, Indian start-up job cuts reach alarming proportions

While faltering investor sentiment and slowing funding cycles have affected startups in general, edtech companies are among the hardest hit. So far this year, 9,000 employees have been laid off by 18 Indian startups, according to Inc42’s Indian Startup Layoff Tracker. Of these, 3,000 belonged to seven ed-tech companies. Ever-higher customer acquisition costs, low post-pandemic retention rates, and screen fatigue contributed to the shutdown.

By 2030, the Indian education market is expected to reach $313 billion. The market size of the edtech industry is around $2 billion at present. The opportunity is vast given that India has the largest population in the world in the age bracket of 5-24 years (580 million people). India has over 250 million students in school, more than any other country.

Hybrid model

Edtech companies are adopting the hybrid model and innovating to increase their offline presence because the market is still large. Last year, BYJU’S acquired 32-year-old Aakash Educational Services in a billion-dollar deal, marking its foray into the offline education market with more than 200 centers. It is investing more than $200 million to open 500 physical tuition centers over the next 12 to 18 months, in addition to the existing 80.

Last month, Unacademy announced its foray into offline learning with its upcoming Unacademy Centers for Contests. The first such center will be operational this month in Kota training center followed by Jaipur, Bengaluru, Chandigarh, Ahmedabad, Patna, Pune and Delhi.

Vedantu is also reportedly exploring hybrid options. Ankur Pahwa, India’s e-commerce and consumer internet leader at EY, said most ed tech players are moving towards an omnichannel approach to improve learning outcomes and experience, create more cohesion and reduce the cost of customer acquisition.

So it’s clear that big ed-tech companies with deep pockets are funding their hybrid movement to stay in business.

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