India’s higher learning edtech space to reach US$5bn by 2025

Online higher education, lifelong learning to drive edtech industry growth in India reaching an estimated US$5bn by 2025, according to a report by RedSeer

It’s no secret that India’s edtech industry is booming, in large part thanks to the pandemic, with the sector seeing multiple startups and increased funding over the last few years.

Indian edtech pulled in US$16.1bn in VC funding in 2021, a 32X increase from US$500m a decade ago, and the edtech space, currently valued at US$2.8bn, is expected to reach US$10.4bn by 2025, according to Statista estimates.

The country is home to nearly 10,000 edtech startups, according to India Brand Equity Foundation, including the world’s highest-valued edtech unicorn – BYJU’S, which is valued at US$21bn.

To date, this exponential growth spurt has been driven largely by K-12 education segment, with strong demand for after-school education supplementation. But that is changing, as post K-12 education – the online higher education and lifelong learning sectors (upskilling categories) are gearing up for the greatest growth in India.

Online higher education to grow 10X over next 5 years

It is the online higher education and lifelong learning sectors that are seeing the greatest growth in the edtech space, according to a new report by management consulting firm Redseer.

The report predicts this sub-segment, which is presently worth around US$1.9bn, will hit US$5bn by 2025, and grow 10x over the next five years.

Not surprising when you consider that the user base for online higher education grew by 75% in 2021, despite a three times growth in the average ticket size compared to the K12 segment.

“India’s booming edtech market, which saw multiple startups and increased funding during the pandemic, is expecting further boost on the back of growth in higher education and lifelong learning segments,” said Abhishek Gupta, engagement manager, Redseer.

Drivers of growth – online higher education and lifelong learning sectors

Lifelong learning includes vocational training, language and other specific skill set training delivered to working professionals or students who have completed their formal education.

A combination of circumstances is driving growth in this sub-segment, among them the fact that the University Grants Commission has allowed universities in India to offer up to 40% of courses each semester online, making higher study more accessible to even more people.

The transition to the credit system in India has also helped. India has supply-side constraints in education infrastructure, especially for specialised courses, but the transition to the credit system is helping change this.

Increased digital access across India, has also attributed to the rise with India’s burgeoning internet economy and increased smartphone usage, not to mention technologies like cloud, AR and blockchain, supporting this growth.

Millions of young people in India, both students and professionals, can now access world-class education and training. Take unicorn edtech upGrad, a higher education and professional upskilling startup that offers students more than 100 courses in everything from data science to blockchain in collaboration with world-class universities such as Michigan State University and Swiss School of Business Management, Geneva.

One of the biggest drivers is that more students and working professionals are realising the need for higher education, a circumstance that is only likely to increase, notes the report “as the economic uncertainty further establishes the need for continuous learning”.

Existing skills are becoming increasingly redundant, and digital skills are in high demand with the gap between digital skill demand and supply widening, due to the acceleration of digital transformation during the pandemic. There is a mismatch between industry requirements versus education curriculum in colleges, explains Gupta.

India’s four higher education edtech unicorns

India now has six unicorns in the edtech space, including four that are in the higher education and lifelong learning sectors. Here, we provide an overview of the four unicorns, one now a decacorn.

1. BYJU'S

The first Indian edtech company to turn into a unicorn, in 2018, the Bangalore-based startup has since hit decacorn status (valued US$10bn or above) and is now worth a whopping US$21bn, making it the highest valued Indian startup and the highest valued edtech startup globally. While the startup began with a focus on school-aged students, last year BYJU'S entered the higher education space with its acquisition of Singapore-based professional training and higher education platform Great Learning for US$600m. This marks BYJU'S strong push into the professional upskilling and life-long learning space globally, expanding its offerings beyond the K12 and test prep segments.

2. Unacademy

The second Indian edtech unicorn, birthed in September 2020, Bangalore-based Unacademy is valued at US$3.4bn. While Unacademy started out focused on students, to help them prepare for competitive exams to get into college, it has since expanded into higher education, from those pursuing graduate-level courses and also for professionals. On its app, student watch live classes from educators and later engage in sessions to review topics in more detail. The startup has amassed more than 6 million monthly active users in more than 10,000 cities in India, and has made six acquisitions to date, to expand its offer and mission of democratising education and making learning accessible and affordable for all. Its most recent acquisition, TapChief, will be leveraged to build Unacademy Pro – a platform that ”helps you become a pro and get your dream job”, Unacademy CEO Gaurav Munjal said on Twitter.

3. Eruditus Executive Education

Becoming the fourth edtech unicorn in September 2021 after raising US$650m in a Series E funding round led by Accel US and SoftBank Vision Fund II, executive education platform Eruditus is now valued at US$3.2bn. The Mumbai-based edtech, which offers some 250 courses, is focused on providing upskilling and reskilling course for working professionals, and has students across 80 countries.

4. upGrad

A rival to Eruditus, Bangalore-based upGrad entered India’s unicorn stable a month before Eruditis, following a US$185m funding round led by Temasek delivering a valuation of US$1.2bn. The six-year-old higher education and professional upskilling startup offers students over 100 courses in data science, machine learning, AI, blockchain, finance, programming and law in collaboration with universities, including IIT Delhi, with courses costing between US$3,300 to US$6,750.

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