Edtech’s failure is India’s education sector’s curse to bear
The alarming financial statements of educational services and products provider Byju’s, as evidenced by its recent disclosures, have raised many concerns about the start-up ecosystem in the country. But it has far deeper and direr implications for education in the country, currently in a state that can only be described as terrifying.
Last year, in the Global Competitiveness Ranking of Major Economies compiled by the Switzerland-based Institute of Management Development (IMD), India was ranked 59th out of 64 countries on the education metric. While India’s elite educational institutions such as Indian Institutes of Technology (IIT) and Indian Institutes of Management (IIM) are popping up on various global lists, it is mostly a story of negligence and underperformance.
One of the main reasons is the lack of funding for public education in the country, which results in low teacher-student ratios, lack of facilities conducive to learning, and poor quality of educators. Private corporate actors have just widened the gap between those who can afford their exorbitant fees and those who cannot.
Over the past 10 years since its inception, Byju’s has attracted $5.5 billion in private capital from well-known investors such as Blackstone, Abu Dhabi sovereign wealth fund ADQ, BlackRock, Edelweiss and the Chan Zuckerberg initiative. Additionally, spurred by its fundraising success, numerous online tutoring bureaus (euphemistically called edtech companies) have sprung up in recent years, collectively raising billions of dollars in private equity (PE) and venture capital funds.
Donor excitement is understandable. The potential returns on every dollar invested in an edtech startup are enormous. At the end of 2019, Byju’s valuation was around $6 billion. Today it is more than 20 billion dollars. This after losing Rs 4,588 crore according to its delayed results of 2020-21. That too in a year when pandemic shutdowns shuttered schools and drove students to online platforms. With parents desperate for a way to cope with this sudden disruption, there has been a rush to sign up to these digital platforms.
From further education providers, edtech startups have suddenly become the nation’s leading education platforms. Given their limited skills, the disillusionment that quickly set in, and with enrollment rates falling and losses mounting, many such companies went on a layoff spree amidst this year.
The failure of these startups shows the limits of online education, which just two years ago was touted as the future of learning. At the same time, it also draws attention to the dire state of formal education in the country which forces students to seek out educational stores, both online and offline. Make no mistake, the various coaching centers that dot our cities are just another part of this unholy mix.
Imagine what the billions of dollars that these edtechs sucked up and blew up could have done for the country’s 12 impoverished schools, which are in constant need of funds and barely able to keep going. The war of words between the BJP and the AAP over a New York Times article praising Delhi’s government-run schools in the capital shows how rare the mere mention of such a possibility is and catchy.
Of course, private capital that works on the biggest fool theory and seeks to maximize value for money, doesn’t care about these things. It is therefore futile to expect that even after these setbacks, the EP stock exchanges will look elsewhere. The problem is that impact funding is not as well funded and the money available for education focused on long-term outcomes is paltry. Despite an increase in the education budget this year, the deficit is still huge and needs sources other than government alone.
Too bad there’s a lot of education online that is absolutely top notch, taught by the best in the business and it’s often free or at a nominal price. On Coursera, a “Python for Everyone” certificate course in which you learn to program and analyze data with Python from the University of Michigan, comes with a starting fee of just Rs 3,878, with the option to read and view course content for free. You could do even better by going to Khan Academy where you can take a complete SQL course absolutely free.