In spite of the recent slump, India’s edtech market is expected to grow to over $10 billion by 2025. Students and learners from Tier 2 and Tier 3 India are expected to boost adoption as firms expand their offline bases to smaller cities and villages.
This would therefore encourage the use of regional languages in edtech modules and content and bring affordability to the industry.
In relation to content, machine learning and generative AI are about to alter the landscape. AI has already being used by many firms to create content, and this trend is only expected to continue.
Of course, there is also the elephant in the room, BYJU’s size. The business’s numerous issues with lenders, vendors, employees, investors, and the government will hurt other edtech businesses. “More and more VCs are asking questions and probing founders on revenue recognition and financials because of the opacity around BYJU’s,” an edtech unicorn cofounder from Bengaluru told Inc42 last month.
According to edtech founders and investors, a wave of mergers and acquisitions (M&As) is anticipated in the coming year due to the larger issues and challenges facing online learning.
However, certain edtech industries have not been as affected by the downturn as others. Some of the bright spots in an otherwise bleak scene are higher education companies, tech certification, skill development, and B2B businesses (learning management systems, SaaS).
Nevertheless, many of the subtleties of what to anticipate from edtech in 2024 are obscured by this summary. Here are the predictions made by analysts, founders, and investors for the industry in the upcoming year.
Regional Linguistics Take Center Stage
Online learning was fueled by inexpensive smartphones and cheap data, but the majority of businesses prioritized English-language instruction. Edtech is poised to expand outside metros and Tier I cities as an increasing number of enterprises aim to penetrate deeper into the industry in order to find their growth wings.
Cost-effectiveness Will Become Edtech’s Alarming Theme
Over the past year, the dearth of reasonably priced edtech courses has emerged as another major issue. Although some companies have attempted to disrupt this market, such as Josh Skills, PW (PhysicsWallah), and Khan Academy, the bulk of consumers have chosen premium pricing.
The reasoning behind this is that Indian families will not cut corners when it comes to paying for school, but in light of the current negative market conditions, decline in discretionary spending, and general decline in family expenses, this has been questioned.
Edtech Will Be Reset by Generative AI
Without a question, 2023 was the year of generative AI, and edtech companies striving to provide accessible education are taking advantage of this development to cut expenses, especially labor costs.
Edtech companies have started making tentative inroads into the GenAI space by utilizing the vast language models and APIs provided by companies such as OpenAI, Google (Bard+Gemini), and Facebook (LLaMa).
Edtech SaaS’s Expanding Role
According to Vidyakul’s Saini, learning management systems (LMS) and ERPs have a bright future ahead of them, despite the fact that K–12 education has declined and test preparation is undergoing a hybrid transition.
The M&A Wave Will Dominate
Consolidation follows any downturn in close proximity. Smaller edtech companies are realizing that M&As and acquisitions of larger businesses are the only ways to break free from the current impasse. If PW has dominated the edtech M&A market, more and more competitors will probably enter the market in the upcoming year and buy out smaller businesses.
Edtech Will Continue To Suffer From BYJU’s Effect
Analyzing the edtech sector during the past year without using BYJU’S is impossible. For all the wrong reasons, the Byju Raveendran-led company has dominated the news cycle, which has essentially made life more difficult for founders in similar categories.
Unless for hybrid models, funding will continue to be slow
As we’ve already shown, edtech funding has decreased dramatically in the last year, decreasing by about 90% year over year since 2022. What about the upcoming year, though?
How viable hybrid edtech models turn out to be in the current FY24 and the first two quarters of FY25 will determine a lot. According to the cofounder of an edtech unicorn that was previously mentioned in the article, investors are not likely to accept revenue estimates for 2021. “The objectives have changed. The creator continued, “Financing will be difficult to come by unless existing operations turn sustainable. VCs have already ditched the growth-at-all-costs approach.
Offline Players Will Invest Significantly in the Edtech Space
However, things have changed since 2022, when companies like Vedantu and BYJU’S purchased offline coaching titans Deeksha and Aakash, respectively. Giants like Allen Career Institute are now in charge of making decisions.
Greater Demands for Regulation of Edtech
Lastly, we think that regulatory attention will likely be directed at the issues with edtech, including exorbitant costs, reliance on loans, arbitrary course content, introduction of unproven models, and more.
