The Art of a Good Unicorn | Edtech startups, is it time for your renaissance?

So, even as EdTech startups go the old physical classroom route, can they still foster this culture of innovation, creativity and collaboration?

So, India's EdTech market size was said to be about $5 billion in 2023 with the market projected to hit about $30 billion by 2031. But, is it all smooth sailing for India's EdTech startups?

The EdTech space in India certainly had a certain exuberance and sheen to it during the Covid-19 pandemic. (Getty Images/iStockphoto)

The EdTech space in India certainly had a certain exuberance and sheen to it during the Covid-19 pandemic. Because it was the EdTech giants riding high with offline learning shut down, giving online learning platforms a chance to receive funding from ebullient global investors, who looked at EdTech as a safe haven for investment, with startups, like BYJU's and Unacademy, receiving a lion's share of funding during the pandemic.

But, things might have changed in a post-pandemic world. Sure, there are constant challenges that EdTech startups can't be faulted for. An EdTech startup may not be able to do much to solve for Internet accessibility or a digital divide. The return to physical classrooms and the reopening of schools and colleges may have led to a decline in reliance on online platforms. Plus, there was a funding winter marked by rising inflation and interest rates, making investors a bit more reluctant and cautious when it came to funding. At the same time, there was a perception that EdTech startups may have been valued a bit too loftily during the boom of the Covid-19 pandemic, so, as the market cooled, investors may have become more critical of their valuations.

And specific EdTech companies began to have troubles. Despite once being India's most valued EdTech startup, BYJU's fell into a whirlpool of issues. It was, also, one of many EdTech startups that began to lay off people; the others included Vedantu, Unacademy, Physics Wallah and Simplilearn, while startups, like SuperLearn, Udayy, Lido Learning, FrontRow and DUX Education, shut down operations. It's said that at the beginning of 2020, CAC went up from about 20% to about 80% of the revenue of EdTech platforms in India, so there was a struggle to achieve profitability.

To deal with all that, EdTech seemed to have had to ditch its original premise of EdTech to go back to opening offline centres, which was done by the likes of BYJUs, Unacademy, UpGrad and Physics Wallah. So, the novelty of reducing dependence on physical classrooms was undone to go back to adhering to traditional methods of education and killing the learn-at-your-own-pace vibe.

So, if these EdTech companies are going back to the basics of becoming part of the status quo, what changes? Can they still revolutionise learning for India?

Hemant Kanakia is one such person looking to fundamentally change the pedagogy of education in India. As someone who graduated from IIT-Bombay, has patents to his name, founded and sold a company for $500 million & has been a GP at a US venture firm, he's focused on mentoring India's entrepreneurs through angel networks and investing in companies in the education, technology and healthcare space. One of the companies he's founded is the Maker Bhavan Foundation which aims to modernise education in science and engineering colleges in India & infuse engineering education with curiosity and experimentation by introducing project-based learning, innovation programmes and soft skill initiatives, turning students into makers.

According to Kanakia, "There has to be a desire to modernise the pedagogy of engineering education in India. Traditionally, classrooms are more theory-oriented, but they can be made much more experiential, making students learn how to innovate and have soft skills... At IIT-Bombay, we built a facility where students from any discipline can form an idea and build a working prototype, teaching students how to work in a team, make engineering trade-offs and explain one's idea to people".

So, what are the gaps that have to be plugged to make Indian EdTech startups more useful in the 21st century?

Kanakia remarks, "In India, students are not learning how to work in teams to build an actual system, respect opinions to push the product forward, work with constraints of resources and time and more. Instead, students may be pushed towards rote learning and preparing for exams, which doesn't relate to the real world. Students are not taught to be inventive, which is a skill set that needs to be imparted. There's an assumption that people are born as inventors with the ability to do new things, but that's not the case. Everyone can learn to be creative and do well. And students need to learn how to communicate, because there may not be training on how to communicate in public and put forth their ideas in a persuasive manner".

So, even as EdTech startups go the old physical classroom route, can they still foster this culture of innovation, creativity and collaboration? If the status quo was simply producing degrees and certificates, could EdTech startups help with practical skills and be more prepared to tackle the challenges of the workplace in the 21st century? Could it move away from a purely academic focus to encourage a hands-on experience that fosters the development of soft skills? That way, EdTech startups in India would not just augment the employability of learners but also train them to think creatively and work collaboratively. There's a certain rigid hierarchy and silo that may be associated with the Indian workplace, so this could make diverse perspectives more valued, allowing the best ideas to come from anywhere, irrespective of rank or status. And that might align with the DEI narrative that's been gaining traction in recent times. Moreover, this way, EdTech startups operating in this manner would make learners more than just consumers, but also creators looking to develop solutions and address problems they come across.

But, none of that would matter. The learner could be supremely intelligent, but if they're unable to effectively communicate ideas clearly and persuasively & be powerful storytellers, then the most viable ideas get drowned out and disregarded. So, EdTech startups providing those kinds of soft skills would have a tangible value-add to learners.

But, what would Indian EdTech startups actually have to do? Could they curate virtual labs and similar collaborative learning environments to create immersive and interactive learning experiences? Does AR/VR have to make a cameo here? Or does that create further expenses for these startups? Maybe, there would be high development costs due to a significant upfront investment in technology and infrastructure needed, along with operational maintenance, but maybe with student engagement significantly improving, that may lead to higher retention rates and improve LTV. And this may even justify premium pricing and offset the initial costs.

Could EdTech startups develop facilities where students from different backgrounds and disciplines come together to brainstorm and innovate? And how about an EdTech startup focused on understanding a learner's strengths, weaknesses, learning style and progress? Based on that, the startup could customise the learning experience, adjust the difficulty of tasks and provide feedback. So, India would have a more effective learning pathway to help one be future-ready.

And is India's startup ecosystem ready for this transformation?

"The Indian ecosystem is very vibrant with regard to startups. When I started putting money as an angel investor in 2010, things seemed to look very dead. A lot has happened since then. In the last 4 to 5 years, Indian startups looked at what models worked in the US, tweaked them for Indian sensibilities and released them to the Indian masses, which is not a bad thing to do, as long as the interest is making money. But, it's not the kind of disruptive action to be the next big thing. We are yet to enter that kind of stage where we are inventive enough to come up with products and startups that would stand against the world's best. And I think that's the next stage that is coming given India's entrepreneurs and talent", said Kanakia.

So, is it time for EdTech startups to lead the charge in a meaningful manner? Will it be India's EdTech ventures unlearning and relearning?

Shrija Agrawal is a business journalist. The views expressed are personal