Moolah in learning

Among the eight start-ups that attained unicorn status in 2018, BYJU's was the only edtech venture. With a valuation of $4 billion, the elevation of BYJU's as a unicorn is predicted to bring in more attention from investors and stakeholders towards start-ups in the education space.

After e-commerce, foodtech and fintech, edtech might be the next hot thing in the start-up ecosystem. Compared to a decade ago when ventures in education were primarily focused on teaching aids, educational videos and assessment, technology-driven newbie companies lay a strong thrust on artificial intelligence (AI), machine learning (ML), big data and predictive analysis to analyse student behaviour and bring out solutions that provide a personalised learning experience.

"In education, usually schools and colleges have been slow in adopting new technologies. But today, they appreciate the power of AI and ML and how these can provide differentiated learning," says Vishal Khatter, founder of Genius Corner, an AI-based personalised learning platform.

Zishaan Hayath, CEO and co-founder of after-school learning app Toppr, says they use adaptive learning methods to power practice questions. "Based on a student's behaviour on the app, it gives basic, moderate or difficult questions and then measures their speed and accuracy. The app then uses this data to increase the level of difficulty. This is possible by using ML algorithms."

Hayath says they also leverage technology to solve student doubts on a real-time basis. "Students can upload a picture of their doubt on the app and using natural language processing and AI, the app scans through the data and suggests an answer. If the student needs extra help, an expert chats with the student to solve the queries. Currently, 25% of all student doubts are solved using AI."

Edtech start-ups have huge growth potential. A report by Google and KPMG notes that the online education market in India is expected to grow exponentially to hit $1.96 billion by 2021. The kindergarten to class 12 (K-12) segment constitutes a big chunk of the edtech market, with over 300 million school-going children.

Entrepreneurs say the strong fundamentals the sector holds would attract more investors and funds in the near future. "We raised $35 million in funding last year. This reflected our highly engaging product, robust business fundamentals and the faith that investors have in us," says Hayath.

Other edtech start-ups like Unacademy and Educational Initiatives raised between $21 million and $25 million in funding rounds last year. Although these amounts are minuscule in comparison to the $540 million raised by BYJU's in December, they reflect the momentum that edtech has gathered.

Experts feel the market dynamics are right to give the sector the necessary push.

"The cheap and easy availability of mobile devices and high-speed internet has provided a boost to the edtech sector," says Anil Nagar, founder and CEO, Adda247, a start-up focused on the test preparation market. Nagar adds that their paid user base is growing at 200-300% year on year since the last three years.

According to Hayath, Toppr has witnessed a continuous increase in its student base. They currently have 6 million students, up from 2 million a year ago.

Besides expanding within India, edtech ventures are also eyeing overseas expansion. Khatter says Genius Corner will look towards Singapore and the Middle-East. "We will on-board over 30,000 students this year from new schools and we have found up-selling opportunities with existing schools. 75% of our growth is through new customer acquisition, while the remaining comes through up-selling with our existing customers."

To accelerate growth, ventures typically look for both organic and inorganic modules. And edtech start-ups are no different. Nagar says they are looking at growth through inorganic modes and are in discussion with a few companies which have complementary technologies and academic capabilities.

Khatter, says, "We are focused on strategic partnerships and are keeping our eyes open to find out strategic alliances which we can consider for acquisitions in the space of on-demand tutoring."

DEMAND CURVE

• $1.96 bn – Online education market in India by 2021, as per a report by Google and KPMG
   
• Over 300 mn – School-going children in India