As the majority of colleges and institutes are now operational. Because their existing funds are running out and there is no word on fresh funding, ed-tech companies are concerned about their future. How can ed-tech businesses make it through this recession?
As the pandemic has receded, the commercial ambitions of India’s ed-tech entrepreneurs have started to crumble. As schools around the country have started to reopen, demand for online tuition has declined, which has recently had an effect on ed-tech enterprises’ revenues.
The epidemic helped this sector of the $180 billion domestic education market because a sizable chunk of it shifted online. Businesses have benefited from development in the online education market over the past two years as a result of their significant wagers on pandemic-related events.
Indian ed-tech businesses raised $4.7 billion in 2021, up from $2.2 billion in 2020. The education technology industry now ranks third in terms of financial assistance for Indian start-ups, only behind e-commerce ($10.7 billion) and fintech ($8 billion).
But they are already disconnecting hundreds of individuals due to a cash crunch and rising client acquisition costs during the outbreak.
Although funding rounds have been slow and investor confidence has declined, ed-tech companies have been hit particularly hard.
The Indian Startup Layoff Tracker reports that 18 Indian companies have laid off 9,000 workers so far this year.
Three thousand of them belonged to seven companies that specialize in educational technology, including WhiteHat Jr., a BYJU affiliate, Vedantu, and Unacademy. A non-academic upskilling company called FrontRow recently let go of 145 employees, or 30% of its workforce and offers courses given by famous people.
Two of them, Lido Learning and Udayy, have completely ceased operations.
According to co-founder and CEO Saumya Yadav, the two-and-a-half-year-old company Udayy shut down not for lack of funds but rather because the business was not growing after the pandemic.
She claimed that the company had trouble growing its basic concept of online, live learning once kids started going back to school.
By 2030, it is expected that India’s education market would be worth $313 billion. According to estimates, the ed-tech market is approximately $2 billion. Given that India, with 580 million people, has the largest population in the world between the ages of 5 and 24, the opportunity is huge. Over 250 million students, more than any other country, are enrolled in schools in India.
