(Saturday Deep Dive) - Social Impact of EdTech in India

In today’s deep dive, we’ll look at how education in India has changed dramatically in recent years. With advances in technology, a young, tech-savvy population, and the impact of the COVID-19 pandemic, edtech has grown from a small support tool to a major force in learning. From big cities to remote villages, digital platforms are helping bridge gaps in education, while also revealing challenges. Now, as the sector adjusts to life after the pandemic, it stands at a turning point, ready to shape the future of learning in India and beyond.

Introduction: EdTech’s Evolution and Significance

India's education technology (edtech) sector has experienced transformative growth, with its rapid evolution largely driven by the COVID-19 pandemic. The shift from traditional, classroom-based learning to digital platforms was accelerated by school closures, compelling millions of students to turn to online solutions. Even before the pandemic, India’s edtech landscape was expanding, but the crisis acted as a major catalyst, amplifying the adoption of technology in education.

Home to over 1.4 billion people, India boasts a young and digitally savvy population, with smartphone penetration playing a pivotal role in creating fertile ground for edtech. By 2021, the Indian edtech ecosystem had become one of the most vibrant globally, with the potential to position India as a global “edtech capital.” Between 2014 and 2021, the sector saw a dramatic surge in both startups and funding, growing from $300 million in 2019 to over $4 billion in 2021. During this period, over 4,500 edtech firms emerged, serving around 300 million learners across K-12 education, higher education, and professional upskilling.

As of 2024, India's edtech market is valued at $7.5 billion, and it is projected to grow at a compound annual growth rate (CAGR) of 25.8%, potentially reaching $29 billion by 2030. With over 100 million paid users, edtech has revolutionized educational access, democratizing learning opportunities for students and professionals alike. This evolving landscape encompasses diverse segments such as test preparation, skill development, and K-12 education, each playing a vital role in reshaping educational accessibility and quality.

The Pandemic Catalyst: EdTech’s Peak in 2020-2021

The COVID-19 pandemic was a seismic catalyst for India’s edtech sector, triggering an unprecedented shift towards online education. As schools and colleges shuttered indefinitely due to lockdowns in 2020, millions of students turned to digital platforms like BYJU’S, Vedantu, Unacademy, and Udemy to continue their education. These platforms quickly adapted, offering a wide range of courses and resources tailored to the diverse needs of students, parents, and educators, ensuring that learning could continue amidst the chaos.

The edtech boom was not limited to K-12 education. There was also a significant surge in demand for professional upskilling and specialized short-term courses. Platforms like upGrad and Simplilearn capitalized on this trend, providing flexible learning solutions to individuals seeking to enhance their skills and gain certifications in an uncertain job market. As the pandemic reshaped the nature of work, online education became an essential tool for career advancement.

By the end of 2021, although schools began reopening and offline education slowly resumed, the digital transformation of learning had left a lasting impact on India’s education system. The pandemic-induced shift to online learning had propelled edtech to its zenith, with companies witnessing massive growth in users and funding. In addition to strengthening the position of established players, the crisis fostered innovations in how education is delivered, paving the way for new business models and educational tools.

This period of rapid growth and adaptation underscores the resilience of the edtech sector, which played a critical role in sustaining educational continuity and expanding learning opportunities across the country. The long-term implications of this digital transformation are still unfolding, but it is clear that the pandemic permanently altered the educational landscape in India.

Impact on Learning Ecosystems

EdTech has emerged as a transformative force in addressing the educational access gap, particularly among urban and semi-urban learners. By providing quality educational resources through online platforms, edtech has enabled students in remote and underserved areas to access content that was previously out of reach. This shift holds significant social implications, fostering greater online inclusivity and helping to bridge the pervasive urban-rural divide in educational opportunities.

Platforms like Edustation are key examples of this impact, offering tailored courses and interactive tools specifically designed to engage learners in rural settings. These initiatives have democratized access to knowledge, inspiring hope among students who previously faced challenges due to limited resources and infrastructure. Edtech has also made strides in offering content in multiple regional languages and providing formats that accommodate different learning speeds, contributing to a more inclusive educational environment.

Khushi, a Chartered Accountant aspirant, shared her experience of using Unacademy for her preparation. She highlighted the convenience of online learning, emphasizing its flexibility and the ability to access recorded lectures at any time. According to her, online platforms like Unacademy are a game-changer, particularly for students in Tier 2 and Tier 3 cities, where quality coaching options are often limited. These platforms bridge the gap by offering access to top educators and comprehensive resources, enabling learners to prepare effectively from the comfort of their homes.

However, the pandemic also highlighted the stark digital divide in India. While urban areas were able to embrace online learning, many rural regions lacked the necessary infrastructure—such as reliable internet access and digital devices—leaving millions of students behind. This divide has significant social consequences, as students from lower-income families often struggle with affordability, digital literacy, and technical barriers, exacerbating existing educational inequalities.

Moreover, the efficacy of online learning has varied. While some students have benefited from the flexibility and resources provided by edtech, others have struggled to maintain engagement and achieve desired academic outcomes. These disparities point to the need for more robust solutions to ensure that the benefits of online education are realized universally. Addressing these challenges is crucial for creating a more equitable educational landscape that empowers all learners, regardless of their geographical or socio-economic circumstances.

The Bust: 2022 Onwards

The reopening of schools and educational institutions in 2022 marked a critical turning point for India’s edtech sector, triggering a sharp decline in demand for online learning. As students and parents increasingly favored traditional, in-person learning environments, the sector, which had thrived during the pandemic, faced significant challenges. A survey by LEAD School revealed that over 80% of parents preferred physical classrooms once schools reopened, citing improved discipline, focus, and social interaction as key benefits. This shift led to a notable drop in user engagement on edtech platforms, with major players like BYJU’S experiencing a 20% decline in app downloads and daily active users by mid-2022. Similar trends were observed across the industry, with reports indicating a 50-60% reduction in the average time spent on edtech apps compared to 2021 levels.

As reliance on online education diminished, investor enthusiasm waned, ushering in a "funding winter" for the sector. The record-breaking $4.7 billion raised by Indian edtech startups in 2021 plummeted to around $2 billion in 2022, reflecting a more than 50% decline in funding. Venture capitalists, spooked by global economic conditions and rising inflation, became more cautious, with the size of late-stage funding rounds shrinking by 40%. The number of deals also fell, as investors adopted a "wait and see" approach, further constraining the already struggling edtech market.

In response to declining demand and shrinking investor support, edtech companies were forced to take drastic cost-cutting measures, leading to widespread layoffs. BYJU’S, India’s largest edtech player, laid off over 4,000 employees across multiple divisions between 2022 and 2023, while Unacademy reduced its workforce by 10%, resulting in over 1,000 job losses. Vedantu let go of 1,100 employees, and Lido Learning shut down entirely in early 2022, leaving 1,200 people without jobs. In total, the sector saw more than 10,000 layoffs, representing one of the largest contractions in any single industry during this period.

The bust also raised concerns about the quality of education offered by online platforms. A CRISIL report noted that around 35% of students who enrolled in online courses in 2021 failed to complete them, citing issues such as lack of motivation, distractions, and technical difficulties. The oversaturated market, characterized by intense competition for a shrinking customer base, further exacerbated these challenges, driving down prices and profit margins.

As a result, many edtech companies have begun recalibrating their strategies to adapt to the post-pandemic landscape. Recognizing the shift in consumer preferences, major players like BYJU’S and PhysicsWallah have expanded their presence in offline education, establishing hybrid learning environments that combine digital and brick-and-mortar models. While the sector appears to have experienced a bust, opportunities remain for a more sustainable future, with innovations such as AI-driven educational tools offering a potential path forward.

EdTech’s Shift to Hybrid and Offline Models

The Indian edtech landscape is undergoing a significant transformation as companies pivot towards hybrid and offline models in response to changing consumer preferences and market dynamics. Leading players like BYJU’S, PhysicsWallah, and Unacademy have expanded their offline presence, reflecting a strategic shift towards integrating traditional learning environments with digital platforms. The hybrid learning model, which combines the flexibility of online education with the personalized engagement of offline classes, is now gaining traction.

A recent survey by FICCI revealed that 70% of students prefer this blended learning format, which has been shown to boost motivation and performance. Educators have also embraced hybrid models, noting the benefits of personal interaction paired with digital flexibility. According to KPMG, the Indian hybrid learning market is projected to grow at a CAGR of 18% between 2023 and 2027, signaling a sustained demand for this approach. However, the shift brings challenges, particularly for students from lower-income backgrounds who rely on the accessibility of online education.

As edtech companies adapt to these evolving preferences, the future of education will likely involve balancing the strengths of both online and offline models, ensuring that inclusivity remains a priority.

BYJU’S:

• BYJU’S had been at the forefront of the shift to hybrid education, launching BYJU’S Tuition Centers (BTC), a model that offers a mix of in-person tutoring and digital resources. By early 2023, BYJU’S had established over 500 centers across India, serving students from grades 4 to 10, providing personalized tutoring to complement their online offerings.

• A cornerstone of BYJU’S hybrid strategy was its acquisition of Aakash Educational Services for around $950 million. Aakash, a well-known chain of offline coaching centers specializing in test preparation for medical and engineering entrance exams, operates over 300 centers across India. The integration of Aakash into BYJU’S portfolio had significantly strengthened its offline footprint, allowing it to cater to students seeking traditional, in-person instruction alongside its vast digital resources.

• The company’s valuation has now effectively dropped to 'zero.' During the pandemic, BYJU’S thrived, reaching a valuation of $22 billion, but its aggressive growth—marked by 24 acquisitions—proved unsustainable post-pandemic, as students returned to traditional classrooms. Mounting debts of over $1.2 billion and corporate governance issues further accelerated the company’s decline.

PhysicsWallah:

• Originally an online platform, PhysicsWallah transitioned swiftly to a hybrid model following the reopening of schools. The company launched offline PW Pathshalas, expanding its reach with over 60 centers by mid-2023, focusing on K-12 education and competitive exam preparation.

• These Pathshalas provide a comprehensive learning experience that combines physical classroom teaching with access to digital resources. Students can attend live sessions, complete assignments online, and review recorded lectures, offering them the flexibility to learn at their own pace while benefiting from the structure of in-person instruction.

• The hybrid approach at PhysicsWallah is particularly suited for complex subjects like math and science, where students benefit from face-to-face interaction with teachers while leveraging the platform’s digital tools for revision and practice.

Unacademy:

• Unacademy, known primarily for its online learning platform, began its foray into hybrid education in 2021. The company has since opened over 20 Unacademy Centers in major cities across India, catering to students preparing for competitive exams such as UPSC, IIT-JEE, and NEET.

• These centers offer a blend of in-person tutoring and digital resources. Students have access to Unacademy’s extensive library of online content, including quizzes, live sessions, and recorded lectures, while benefiting from the guidance and structure of classroom-based learning. This hybrid model allows Unacademy to attract both tech-savvy students and those who prefer more traditional learning methods.

• By integrating offline and online education, Unacademy is positioning itself as a comprehensive learning solution in the competitive test-preparation market.

A Market Bubble or Restructuring?

The recent downturn in India’s edtech market raises questions about whether this represents a bubble burst or a necessary market correction. Following a period of unprecedented growth during the pandemic, the sector became oversaturated with nearly 17,000 startups competing for a diminishing user base, leading to intense pricing pressures and diminishing profit margins. The once-thriving market has seen investor confidence wane, with funding plummeting from $3.81 billion in early 2021 to just $297.3 million in 2023.

However, signs of recovery are emerging. Companies like PhysicsWallah are shifting towards hybrid and offline models, recognizing the evolving demands of learners who appreciate the blended approach of both online and traditional classroom experiences. This strategy aims to recapture user interest and mitigate the effects of previous overreach.

While the market faces challenges, the pivot towards sustainable, consumer-centric solutions suggests that the edtech industry is restructuring rather than experiencing a catastrophic bubble burst. With a focus on quality and adaptability, the sector could emerge stronger, catering to the diverse needs of learners in an increasingly digital world.

Emerging Frontiers: AI and EdTech Innovation

Generative AI is set to revolutionize the Indian edtech landscape, unlocking new possibilities for personalized learning and operational efficiency. With AI-powered platforms, students can now receive tailored educational content that adapts to their unique learning styles and paces, resulting in enhanced engagement and improved comprehension. Educators, too, are benefiting from AI-driven applications that automate routine tasks such as grading, lesson planning, and attendance tracking, freeing them up to focus on high-value activities like mentorship and personalized student support.

One of the most significant advancements in AI for education is the ability to offer highly personalized learning experiences. AI-powered platforms analyze students’ learning patterns, identifying strengths, weaknesses, and preferences, then adapting content, quizzes, and exercises accordingly. This individualized approach helps educators deliver more targeted interventions and creates a more engaging learning environment. A report by Technavio estimates that the global AI-in-education market is projected to grow by $10.38 billion by 2026, largely driven by these personalized learning solutions.

AI Applications in EdTech:

1. Automated Grading

   AI tools are increasingly being used to automate the grading process, particularly for subjects like math and science where answers can be objectively evaluated by algorithms. This trend is already being seen on platforms like Khan Academy, and Indian edtech firms are quickly exploring similar solutions. Automated grading not only saves teachers valuable time but also allows them to dedicate more effort toward individualized teaching strategies.

2. AI-Powered Content Generation

   AI is also being utilized to generate customized educational materials such as quizzes, assessments, and learning modules. Platforms like Quizizz and Testbook have integrated AI tools to create adaptive tests based on students’ progress, helping teachers assess outcomes without having to manually design every test. This use of AI ensures that assessments are tailored to each student’s unique learning journey.

3. AI-Based Virtual Teaching Assistants

   AI-driven teaching assistants are increasingly being employed to handle repetitive tasks such as scheduling, answering common student queries, and even tutoring on basic concepts. Virtual assistants like those from Sana Labs have demonstrated success in personalized tutoring, and Indian edtech firms are adopting similar approaches to provide additional support to students outside of class hours.

AI in Assessments and Predictive Analytics

Beyond automated grading, AI's potential in education extends to predictive analytics. By analyzing student data, AI can forecast future performance and flag students who may be at risk of falling behind. This allows educators to intervene early, addressing learning challenges before they become critical. According to a study by Research Nester, the global market for AI-enabled assessment tools is expected to reach $5.6 billion by 2027.

In India, edtech platforms are already incorporating AI to improve assessments. For instance, upGrad uses AI to track learner progress, monitoring engagement with video content, assignments, and tests to offer personalized feedback and predict course completion rates. Such predictive analytics have the potential to transform how educational institutions evaluate student performance and outcomes.

AI-Driven Gamification

AI is also playing a central role in making learning more interactive through gamification. Platforms are integrating game-like elements—such as points, badges, and leaderboards—into their learning modules to motivate students and increase engagement. Duolingo, a leader in language learning, uses AI-driven gamification to adjust difficulty levels and offer personalized rewards based on learner progress. In India, platforms like Toppr and BYJU’S have also adopted AI-powered gamification to keep students engaged through learning games and quizzes. According to RedSeer, gamified learning in India is projected to grow by 25% annually, with nearly 30% of students reporting higher engagement when gamified elements were introduced into their courses.

AI in Educational Administration

Beyond the classroom, AI is streamlining administrative processes in schools and universities. Routine tasks like admissions, student records management, and scheduling can now be automated using AI-powered tools, reducing the administrative burden on staff and improving operational efficiency. By 2026, Gartner predicts that 30% of educational institutions worldwide will be using AI-based administrative solutions. In India, platforms like LeverageEdu are already leveraging AI to match student profiles with higher education courses and institutions, simplifying the admissions process for both students and schools.

Challenges and the Path Forward

While the promise of AI in edtech is immense, realizing its full potential requires significant investment in infrastructure, research, and workforce training. To drive meaningful innovation, India’s edtech ecosystem must foster collaboration among stakeholders—including government, private firms, and educational institutions. Prioritizing AI development will not only enhance the quality of education but also help address critical gaps in access for underserved populations.

As AI technologies mature, India has a unique opportunity to establish itself as a global leader in edtech innovation. By embracing AI-driven solutions, the country can create a more inclusive, efficient, and responsive educational system—one that not only caters to diverse learning needs but also drives socio-economic growth. The future of education in India may very well hinge on how effectively AI is integrated into both learning and administrative processes.

Public-Private Partnerships and NEP 2020

The National Education Policy (NEP) 2020 plays a crucial role in advancing technology-enhanced education in India, establishing a framework for integrating digital solutions within the education system. By emphasizing the importance of technological interventions, NEP 2020 aims to enhance teaching, learning, and administrative processes, thereby facilitating a more effective educational environment.

Public-private partnerships (PPPs) present significant opportunities for collaboration between edtech firms and government initiatives. These partnerships can leverage the innovative capabilities of private companies while utilizing government resources and infrastructure to expand access to quality education. For instance, edtech firms can contribute their expertise in developing digital content, while the government can support the necessary infrastructural improvements and policy frameworks.

Moreover, NEP 2020’s creation of the National Educational Technology Forum (NETF) underscores the need for a collaborative approach to integrate technology in education. By engaging various stakeholders, including private players, NEP 2020 envisions a more equitable educational landscape, addressing the digital divide and ensuring that marginalized communities have access to quality learning resources. Through effective public-private collaborations, India can harness the potential of edtech innovations, ultimately driving equity and inclusivity in education while preparing a skilled workforce for the future.

Conclusion: The Future of EdTech in India

The social impact of edtech in India has been immense, reshaping access to education, fostering inclusivity, and bridging gaps in the learning ecosystem. While the sector experienced a boom during the pandemic, followed by a significant downturn, it has laid the foundation for lasting change in how education is delivered. The pivot toward hybrid and offline models, coupled with emerging technologies such as AI, signals that edtech is not merely a fleeting trend but a dynamic force in India's educational future. However, challenges remain—particularly around digital access and educational equity. As edtech continues to evolve, the focus must be on creating more sustainable, inclusive solutions that ensure quality education reaches learners across all socio-economic backgrounds, cementing India's role as a leader in global education innovation.

Looking ahead, there is cautious optimism regarding the sector's future. Areas for potential growth include the integration of AI technologies, hybrid learning models, and innovative pedagogical approaches that prioritize inclusivity. As companies adapt to changing consumer preferences, the emphasis will be on creating educational solutions that cater to diverse learning needs while addressing existing disparities.

Long-term, the social impact of edtech can be transformative, fostering greater accessibility, improving educational quality, and promoting technological inclusivity. By focusing on building resilient educational ecosystems, India can leverage its demographic dividend and ensure that the benefits of edtech reach every corner of the country. The journey forward is not without challenges, but with strategic investments and collaborative efforts, the future of edtech in India holds the promise of a more equitable and enriched learning landscape.