EdTech RoundUp - July 2022
Funding in the Indian start-up ecosystem tanked to settle at $6.8 billion in the 2nd quarter of this year. That is a 40% decrease from $11.3 billion in the first quarter. This has impacted the Indian education technology sector too. The industry saw a 50% decline in funding, from $915 million in the first quarter to a total funding fall to $456 million in the second quarter. This indicates that the edtech sector is going through a bad phase, but the slump is believed to be temporary.
Although the sector witnessed many ups and downs in the month of July, there’ve been some valuable mergers and fundraising. Let’s go through some of the key highlights of the Edtech industry in the month of July:
1. Byju’s Doubled its Revenue
Known as India’s most valuable startup, Byju’s got even more significant. The online education platform doubled its revenue to approximately INR 10,000 crore in FY2022. But that’s not it. Byju’s has had its eye on global expansion for a long time now. And so it had bid to acquire Nasdaq-listed 2U, valuing it at roughly $2 billion, more than twice its current market of $944 million.
2. UpGrad Takes Possession of Harappa Education
The higher education platform UpGrad acquired Harappa Education at INR 300 crore. The UpGrad co-founders believe that a mix of upskilling courses with critical skills that Harappa offers will set them apart. This will help them grow exponentially as they cross-leverage synergies. Through this merger, the co-founders envision creating a wholesome learning ecosystem for learners across the globe.
3. Edtech Companies Enforce Mass Layoffs and Business Restructuring
The industry that was booming during the pandemic is now battling various challenges. Many companies like Byju’s and WhiteHat Jr (acquired by Byju’s) had to lay off employees, while others had to restructure their business models. Some giants have even come down to offering massive discounts on their courses to attract as many students as they can.
This could possibly be because of the change in the context in which the Edtech companies grew. Children are now switching to physical learning environments, and parents are not renewing the services. To keep themselves afloat, giants like Vedantu and Byju’s to emerging Edtech companies have started their offline centres.
4. IEC resolved 100% of Complaints Against Edtech Firms
In order to attract as many students as possible, many edtech firms were accused of mis-selling courses to parents. According to the ASCI ‘Complaints Insights 2021-22’, around 6% of complaints were filed against education technology companies.
However, recently, the IEC, which comes under the aegis of the Internet and Mobile Association of India (IAMAI), shared that it had resolved all complaints received until June 2022. They also mentioned that the complaints received in July have been going through active screening for faster resolutions. The IEC claims to propel a more robust ecosystem in coming times to ensure transparency.
5. Edtech startup Creative Galileo has raised $7.5M in its Series A funding Round
Creative Galileo is a Mumbai-based startup that raised $7.5 million in its Series A funding round from Kalaari Capital, East Venture, Affirma Capital, Valiant Employee Investment Fund, and a slew of other angel investors. Incorporated by Prerna Jhunjhunwala and Nikhil Naik in July 2020, the edtech startup has raised $10 million to date.
Creative Galileo commits to using the fresh capital to scale its business and accelerate hiring across distinct departments. They also assure to work toward introducing regional languages and strengthening the R&D of the platform. Moreover, it primarily uses fictional characters by forming exclusive partnerships with animation studios, eliminating any type of competition.
6. UGC to Offer 23,000+ Higher Education Courses at no Cost
The University Grants Commission announced to offer around 23,000 higher education courses free of cost on the new web portal. These courses include 23,000 postgraduate courses, 25 non-engineering SWAYAM courses, and 137 SWAYAM MOOC courses in emerging areas. Through this new web portal, the UGC aims to bridge the digital divide and make higher education accessible to everyone.
What's exciting is that the UGC has collaborated with the Ministry of Electronics and Information Technology (MeitY) to integrate the e-resources with over 7.5 lakh Common Service Centres (CSC) and Special Purpose Vehicle (SPV) Centres to offer new courses in the academic session of 2022-23.
Journey Ahead
This monthly recap of the Edtech sector clearly shows how various companies are struggling. But, there's also a silver lining as startups like Creative Galileo emerge and mergers like UpGrad and Harappa Education work towards creating a better ecosystem. Not to forget the significant efforts by the UGC to make courses in emerging areas accessible to everyone. Despite the challenges, the industry has always turned its way around and will continue to do so. Stay tuned for what's next right here.