Why education-tech startups will make a mark this season

India saw a new high of over 50 ed-tech deals in 2015, with the volume of deals up 315% from 2011. In 2016 it has witnessed 18 deals already, says CB Insights study

Why education-tech startups will make a mark this season

Advitiya Sharma, who quit as co-founder of real estate portal recently, launched Genius, an education startup that provides software for neighbourhood tutors to make learning more effective. Sharma is one among the many new entrants in the education startup segment.

According to the research firm CB Insights, India saw a new high of over 50 ed-tech deals in 2015, with the volume of deals up 315% from 2011. The report indicates that the country is on track to break last year’s record, with 18 deals so far already, implying more than 60 total by year-end 2016.

Funding to ed-tech startups remains concentrated in the US, which accounted for 67% of all deals from 2011 to 2016 year-to-date, or more than 1,300 deals. Looking outside the US, India ranked second for deals with 6% or roughly 130 deals, and China ranked third with 5% or just over 100 deals, CB Insights’ report said.

Many of the startups are using technology to create personalised learning experience for students and building solutions  to enhance creative learning. This apart, startups are also focussed in building app-based test preparation modules for various competitive exams.

Some of the early stage education startups that have raised fund this year include, career assessment platform IdreamCareer, mobile education platform Vahan, online test preparation startup Oliveboard, financial service education platform Imarticus Learning, career counselling platform, digital marketing platform (for universities) Avagmah and competitive exam preparation portal Byju.

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Byju raised $75 million (approximately R500 crore) from venture capital firm Sequoia Capital and Belgian investment firm Sofina. This is considered to be the biggest deal in the ed-tech space so far in India. Byju Raveendran, founder of Byju’s says, “India has the largest K12 education system in the world, but we consistently rank low in all global assessments. We started Byju’s as a mission to address these learning gaps—to make learning fun and engaging by making it contextual, visual and not just theoretical.”

A few startups are also catering to the rural segment and are building products in the regional languages with a focus to help government school education system. Also, with many working professionals wanting to do certification courses and take up online degree programmes, these app-based learning modules provides students with handy information and gives on the go experience, connecting faculty members  even when one is travelling.
Speaking about his investment in Avagmah, Kris Gopalakrishnan, says, “The current brick and mortar higher education system is facing major challenges of excellence and access, with only 24 million students enrolled out of the potential 120 million. Universities and top tier institutions have to adopt technology to provide access to quality education to millions of working professionals and students in urban and remote India, which would then address the demand-supply gap of skilled talent. I see great potential in startups like Avagmah  which can bring in positive disruption in our education system through technology.”

The other firms which are in the space are companies such as Vedantu, Toppr, Simplilearn, Educart, iProf Learning solutions. But, should startups be worried about the global slowdown in the funding environment and the negative ecostyem that is prevailing in India over the last two quarters? Investors say no. Thomas Hyland, founding partner at Aspada Investment Advisors said, “We think there’s still a tremendous opportunity in the healthcare, education, agri-tech space. The slowdown is merely a correction in certain business segments like e-commerce, fintech and others, wherein, there was over reliance on the marketplace models.”

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First published on: 09-05-2016 at 06:10 IST