Before I start expressing myself in this highly opinionated article about “Ed-tech” landscape of this country and the hype created by these companies, let me give you some numbers that are published by MHRD, the ministry responsible for the Indian education system.

As per MHRD report of 2016 (yes, that’s when they counted last for enrolment in Indian education system), India has more than 260 million students. and as of MHRD-AISHE report of 2019, there are 37.4 million students studying for higher education ( under-graduate and above). If you go into the details of AISHE report, following are some key points standing out in the summary :

• About 79.8% of the students are enrolled in Undergraduate level programme. 1,69,170 students are enrolled in Ph.D. that is less than 0.5% of the total student enrolment.
• Maximum numbers of Students are enrolled in B.A. programme followed by B.Sc. and B.Com. programmes. 10 Programmes out of approximately 187 cover 80.3% of the total students enrolled in higher education.
• At Ph.D. level, maximum number of students are enrolled in Science stream followed by Engineering and Technology. On the other hand at Post Graduate level maximum students are enrolled in Social Science stream and Management comes at number two.
• Distance enrolment constitutes about 10.62% of the total enrolment in higher education, of which 44.15% are female students. 10.62% means approximately 3.8 million students are enrolled in educational institutes through distance study mechanism.
• There are 993 Universities, 39931 Colleges and 10725 Stand Alone Institutions listed on AISHE web portal and out of them 962 Universities, 38179 Colleges and 9190 Stand Alone Institutions have responded during the survey. 298 Universities are affiliating i.e. having Colleges.
• 16.3% of the Colleges are having enrolment less than 100 and only 4% Colleges have enrolment more than 3000.
• Share of female students is lowest in Institutions of National Importance followed by State Private Open Universities, Deemed Universities-Government.

If you read these numbers, the least you can understand is the enormity of the system and how complex it must be given many factors of India demography like :

• India is a home to more than 122 languages and of which23 are considered as official languages of the country.
• Indian population is 1.3 billion of which 65% is under 35 years of age.
• Unemployment rate of India is at a high of 8.4% with urban unemployment at 9.6% and rural unemployment at 7.8%
• Indian GDP is at 5% down from 6.8% in 2018 and 8.2% in 2016.
• as per census 2011, 60% of Indian population lives with an income of Rupees 200/- per day or less.
• Approximately 1.6 million engineers graduates in India every year of which only 10% or less are employment ready.

Now, that you know the basic data points let’s begin the storyline.

The Opening Scene

Indian education system has long been struggling to produce people that are skilled to generate enough income for a better quality of life or a standard of living. In the pre-liberalization era, Indians were looking for a job security. With the license raj in place and government jobs only providing a regular source of income, the dependency on skilled workforce wasn’t that high. But in 1991, when the economic system changed and India became open to world market driven by divestments and free market dynamics, a lot of private sector companies started emerging.

But by late 90s along with the private sector boom, job security started going down while incomes started rising. This started the creation of income divide where some people started earning a lot more than most of the others. Along with that, came the technology boom where India became the back office of the world and software services industry took a leap in the future by offering skilled but cheap labour from the US market price point. This drove the growth of Infosys, WIPRO, TCS, and the likes of them. When Infosys offered a starting salary of Rupees 15,000/- per month against an average income of Rupees 5,000/- to 8,000/- per month of a non-IT sector employee, the face of Indian education system started changing. Before early 90s, people applied of engineering when they were really interested in it and a lot of people wanted to be lawyers, architects, farmers, shopkeepers or may be, government employees. but by late 90s, Indian middle class aspired to be a software engineer. This drove the culture of getting into engineering college and even, if you joined in civil engineering , you were still picked up by the likes of Infosys and TCS , trained on the job for mainframe computing while just fixing the Y2K errors and making a killing of 15K-20K rupees a month with a few months of US travel.

Suddenly, the influx of engineering colleges happened and from a less than 100 engineering colleges, India had more than 5000 engineering institutes in a span of few years. This grew to such an extent that as of today, if you go for a drive on Indian highways, you may not find food , water or a toilet but you’ll definitely find an engineering college in middle of nowhere. This sudden requirement of being the back office of the world or the cheap version of silicon valley drove the aspirational index of parents and students in India. The rush of being rich, foreign travel, peer pressure of owning a car and a house drove people to ignore what they were really good at and pursue engineering at any cost.

This mad rush towards engineering ( and a minor rush towards medicine as a career) gave birth to a new supplemental education market- The coaching industry. The tuition centres / coaching classes mushroomed in all cities and towns helping students prepare for the entrance exams of engineering and medicine. While a student paid a substantial amount to schools as a fees, 10X amount was being spent on the coaching classes. Thus, the Kota Factory came into existence and suddenly, parents were spending lakhs of rupees ( in many cases, mortgaging their jewellery and houses) to get their children admitted to these coaching classes. As per news reports, many of the teachers who provide IIT entrance exam coaching in the town of Kota earn annual salary of multiples of crores which is way more than most of their students will ever earn.

While this is going on in the country on one side, the other side of the country is struggling to get its GDP on track, providing enough for its citizens by reducing unemployment and bridge the ever widening rich and poor divide. For that, education system needs to change towards skilling of people in various occupations like lab technicians, nurses, clerks, bank officers, salespersons, masons, architects etc. But while there is demand for such skilled people, there is no supply as everyone wants to be an engineer.

Indian Ed-Tech Landscape

In the midst of all this, India is seeing another boom and this time, it’s the rush towards starting up. The success of Flipkart and Redbus has encouraged people (read: engineers) to become entrepreneurs. While this is a good sign, VC funding rush has driven to an extent that the founders are raising money, and then burning money so fast that they are vanishing at a faster rate than they should be. Among all the kinds of startups, “Ed-Tech” ( Education Technology) has also become a buzz word. In a short period of time, entrepreneurs in the education world ( or as they are called “edupreneurs” ) have started launching online versions of the offline world and hence, the name “Ed-Tech”. If we have to classify Indian ed-tech startup scene, it can be done very quickly in following four segments.

Online Assessment : In old days, Brilliant Tutorials or Bansal classes used to have mock exam series and a booklet that was couriered to home for having practice tests. The same got translated in the online world and suddenly, you’ll find many companies offering exam prep services online. Essentially, a large enough question bank that students are playing around with. and 80% of the questions are same on all websites with almost 50% of the them being taken from last 20 years of printed books or test papers🙂

Online Coaching / Tutoring : A teacher sitting in front of the camera talking to students either in live video format or it is a recoded video that students can watch.

Online Career Counselling : Instead of going to a counselling at a CBSE accredited counselling centre, you can just pay a fee and have a chat or video call with a counsellor.

Executive Education Services : A mix of online / offline coaching and degree/certificate vendors for working professionals ( mostly engineering and management professionals).

Then there is Byju’s (“father of everyone”) doing everything mentioned above in one single platform and not only for senior secondary students but for kids who have just started their schooling in grade 1 or above.🙂

Before you take me wrong, Let me clarify this. I am not against any of them. It’s actually good that these companies have leveraged mobile apps and internet bandwidth to reach out of potential students and help them prepare better and get good marks such that students don’t need to get stuck and waste time in traffic but study at home at a cheaper cost. All Good till now. But then, why are these companies called Ed-Tech? They are not tech enough as they are not building cutting edge technology ( not even compared to e-commerce companies). And also, they are not education companies as most of them do not provide education or skill people but just help people get better marks and clear exams.

In my opinion, none of these companies are solving the real world problem of Indian education system. But they are just feeding on fears of parents and students. Students are rushing towards these online platforms because they do not want to miss anything that can cause them to score less. While the genesis of any for-profit company is to maximise revenue for itself, the companies operating in the sector of education and healthcare have also to bear responsibility towards the society. The advertising industry or e-commerce industry can consider only profits and margins but the education companies need to consider the fate of the student in its balance sheets. The quality of teachers on the Indian ed-tech companies cannot be measured as one does not know if they even know how to teach.

While at school and college level, it was still understood why these companies are leveraging the fear of people for profitability, In the executive education space too, the same is happening. Degrees and certificates from unknown / less known universities are being sold online along with placement offerings in the garb of blended learning.

US Ed-Tech Landscape

If you compare the US Ed-tech landscape, just do a quick google of the term Ed tech startups in US or read this article Education companies taking learning to the next level . Now, you’ll get the difference. While there are online coaching platforms and test prep companies in US too, there are a lot more others who are trying to solve the backbone of education system. There are companies who are building products to make schools and colleges function efficiently so that teachers can focus on teaching and not administration. There is companies providing a digital library, helping teachers build teaching material, predictive algorithm companies guiding students, fund raising companies for students, loan facilitators, learning management systems, building devices to improve learning experiences, and of course, companies that are focussed on skilling people in non-traditional jobs.

Yes. I know. US is a developed economy. They are an evolved country while India is an emerging economy and a growing market. But in an emerging economy, there is a lot more need to strengthen the backbone first. There are enough “Kendriya Vidyalayas” or “Public Schools” who can streamline their admission systems so that RTE ( Right to Education ) Act can be implemented effectively but then, there have to be technology companies building softwares to streamline processes. MHRD mandates that every school needs to have a counsellor and with that, also comes the responsibility that counsellors are doing their jobs effectively. There can be startups who can solve the problem of students needing a helpline where data is captured and shared with school to help the children. and the list of ideas for improving and making a difference in Indian education system can go on …

But then, Indian ed-tech startups are still stuck with entrance exams and coaching business. and even there , its the game of numbers and funding rather than making a real difference in life of children.

Byjus versus Khan Academy

Khan academy was launched in 2008 and had become hugely popular in the US in a very short duration. In the sector of K-12 education, Sal Khan, founder of Khan academy saw an opportunity and launched his venture as a non-profit. On similar lines, Byju’s saw the opportunity in the same domain of K-12 education in India and launched his for profit company Think and Learn in 2011. I have mentioned for profit and non-profit just to compare the motivations of the founders. There is no judgement on the same. In the end, if the children benefit for both of them, It really doesn’t matter if someone becomes a billionaire.

Byjus became famous very quickly, less for its courses, but more for its funding raised. Over the last 6 years, Byjus raised over USD 975 million from various investors. On the other hand, Khan academy being a non-profit, has raised grants or donations on an average of USD $30 million per year. In the year 2018, Khan academy managed donations and grants to the tune of USD 32.5 million. Compared to massive funding of Byjus, Khan academy is nowhere in terms on bankrolling its operations.

While Khan academy is completely free for the students, it still gets revenue of about USD 50 million on a yearly basis and expenses of about USD 45 million leaving them as well managed cash positive organization. On the other hand, Byjus being a private company doesn’t publish annual report but from media report, it seems they make a revenue of USD 200 million annually versus expenses of atleast USD 200 million or more. While Byjus claims they are a profitable company without giving out numbers, sponsoring Indian cricket team doesn’t come cheap for sure.

The only thing I am trying to drive a point while discussing the financial numbers is that while Khan academy is may be 1/5th or 1/10th of Byjus in terms of financials, the impact of Khan academy seems to be 10 times of Byjus.

While Byjus claimes to have 35 million registered users with about 2.4 million paying users and with a highly questionable practice of sign ups and renewals ( do read this :https://the-ken.com/story/the-loan-crisis-at-byjus/ and https://the-ken.com/blog/byjus-and-the-art-of-the-deal/ ) , Khan academy reaches to 71 million registered users for free.

Now, registered or paid users is not a metric for success of an education platform as it is very clear from the competitive nature of kids and their parents that they sign up for every platform that comes up in the market. The metric which should be looked at is the usage of the platform. Khan academy publishes that their platform is used atleast for 120 minutes a month but 1.5 million users and that’s what they consider as a success criteria. There were nearly 8 billion minutes of platform usage reported on Khan Academy for the year 2018. I couldn’t find the numbers of Byjus as Byjus doesn’t publish their platform usage statistics but while there is enough positive feedback about Khan academy, I am yet to come across posts on social media ( school forums, parents forums, references etc) where people have shown positive impact of Byjus.

That said, the only case it shows is while Byjus founder has become a billionaire by leveraging the standard FOMO of indian parents, Khan academy is the one who is still making a difference in the educational life of Indian kids while spending 10 times less than Byjus. While Khan academy is now referred by schools in US, Indian schools have actually started warning parents against the use of Byjus platform.

And at the same time, scale of Byjus funding and the modus operandi of sales had driven more Indian ed-tech startups to copy the model rather than really focus on solving the problem they actually started with.

Conclusion : What is the right thing ?

Honest answer. here is no conclusion. I don’t know. But I do know one thing is while making money is good and nothing evil about it, making money in education and healthcare without giving back the benefits what people deserve is no less than evil. Education and Healthcare are the only two sectors where people do not look for discounts, albeit, are willing to pay more to get the highest quality service. But this is one area where the startups are not raising the bar.

India startup ecosystem / entrepreneurs have huge opportunities in front of them to make a difference in the life of children and provide better education & skilling and make them ready to face the ever growing competitiveness in the world. By the time, Indian government will wake up to fix the system , entrepreneurs can be the one providing the support to the schools and universities while making money on the way. but then, in this mad rush of raising money from VCs and over-valued companies ( maybe Byjus is the next WeWork too alongside OYO), somewhere the mission and vision statements of these ed-tech companies is just an introductory slide on their pitch decks.

This article has too many topics to talk about that every section and sub section deserves many pages of its own with details and data points. But In this article, I have tried to cover the macro perspective of the whole education system in India so as to make you think harder. Humans, by nature, are competitive and if you have read Sapiens by Yuval Noah Hahari, you’ll understand it a lot more. So, blaming parents for competing and comparing is not so good. When the Indian population is growing and will beat China one day, the jobs and economy are not growing like China. on the contrary, jobs are shifting towards non-core sectors while ed-tech startups are still trying to mint money from the traditional models of coaching and exam preps.

The real ed-tech boom in India will happen when there is enough demand created in sectors other than IT & Banking, with the supply rationalised to make sure everyone makes a decent living . Till then, its just VCs throwing money at either IIT/IIM graduates who have no clue about teaching or education system or throwing money at companies just because some Zuckerberg has invested in them to get a share of Indian market. In both the cases, Indian student is just a number on the pitch deck of these companies with an ARPU ( Average Revenue Per User) shown with hockey stick curves. But in reality, the Indian students are still getting their supplementary education from the likes of Khan Academy or a Coursera.

References :

1. Economy of India - Wikipedia
2. Institutions of National Importance
3. Unemployment rate of India
4. Languages of India - Wikipedia
5. AISHE Report 2018-19 from MHRD, India
6. Educational Statistics at a glance - Report 2018 from MHRD, India
7. Statistical Year Book 2017 by Ministry of Statistics, India
8. Education in India - WENR
9. Engineering Education in India - Short and Medium Term perspectives by AICTE , India
10. Salary of Teachers in Kota
11. Khan Academy Financial Information
12. Byjus Cricket Sponsorship
13. Byjus grows revenue
14. Khan Academy - Leveling the playing field