 "EdTech woes: Why India's online & offline education platforms are crashing")
India’s education sector, long regarded as a booming industry, is facing a sharp downturn, particularly in its EdTech segment — both online and offline. The country, home to the largest network of higher education institutions in the world, once played a pivotal role in the global education landscape. However, the rapid transition to online learning triggered by the Covid-19 pandemic has had a lasting impact. While online platforms soared in popularity during the lockdown, the once-thriving EdTech sector is now grappling with a series of challenges that have brought it to the brink of collapse.
Rise and fall of online EdTech
The Covid-19 lockdown in 2020 forced educational institutions to move entirely online, with platforms like Byju’s, Coursera, and Udemy becoming household names. For a time, it seemed as though India’s EdTech industry was set for exponential growth. Byju’s, for example, reached a valuation of $22 billion in 2022, becoming India’s most valuable EdTech startup. But the sector’s trajectory has taken a sharp downturn in recent months.
Despite offering popular courses across subjects, including test preparation for exams like the IIT-JEE and UPSC, online education platforms have faced a significant issue: a lack of student engagement. A report by Udemy highlighted that only 30 per cent of students completed their courses, with many enrolling in courses but never starting them. Some students also abandon paid courses midway through, finding the self-paced, digital learning format lacking the motivation and discipline of in-person classes, reported NDTV.
Byju’s, in particular, has been severely impacted by a funding crisis. The company, which had aggressively expanded during the pandemic, has struggled to manage its finances and meet investor expectations. In 2023, Byju’s faced allegations of financial mismanagement, including the misuse of over $1 billion in loans, leading to a legal battle with US lenders.
Reports also suggest that the company has entered a phase of insolvency after failing to meet unpaid dues. The company’s market value has since dropped significantly, and it is now attempting to restructure its operations, including laying off thousands of employees.
Furthermore, a survey conducted by the National Sample Survey Office (NSSO) in 2021 revealed that only 5 per cent of students in rural areas had access to online learning resources, contributing to the widening digital divide. Many students in smaller towns and rural areas still lack the necessary infrastructure — like smartphones, internet connectivity, and adequate data plans — to access online courses. This digital gap has further reduced the effectiveness of online learning, especially for lower-income families.
Offline coaching centres in crisis
The collapse of offline coaching centres, which have long been integral to India’s educational ecosystem, has been similarly dramatic. Institutions like FIITJEE, Aakash, and Rao’s IAS Study Circle were once regarded as top-tier preparation centres for competitive exams, attracting thousands of students each year. However, these centres are now battling a range of issues—financial troubles, regulatory crackdowns, and safety concerns—that have led to their decline.
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FIITJEE, for instance, recently faced a significant crisis when multiple branches across North India shut down unexpectedly. At least eight centres were closed in the past few weeks, leaving students in distress just ahead of crucial exams. The closures came in the wake of financial troubles and the resignation of several teachers due to unpaid salaries. Parents have accused the institution of poor management, alleging that they were given no prior notice of the shutdown and were not refunded the fees they had paid.
Downfall of offline coaching centres
The offline coaching sector also faced public scrutiny following multiple tragic incidents. In 2023, a massive fire broke out at a coaching institute in Delhi’s Mukherjee Nagar, injuring over 60 students. The tragedy highlighted the serious safety risks that many of these coaching centres face. Just months earlier, three students from Rau’s IAS Study Circle drowned in a flooded basement in Delhi’s Old Rajinder Nagar, sparking a crackdown by the Delhi government. Over 20 coaching centres in the city were sealed for violating fire safety and building codes, with some centres being found to operate without proper licenses or safety measures. These incidents have raised serious concerns about the unregulated nature of the offline coaching industry.
The government has since begun tightening regulations for coaching centres, particularly those that operate without accreditation or proper documentation. Authorities have also been cracking down on centres violating fire safety, health, and sanitation protocols. These actions have put further financial strain on the already struggling sector, which has seen a decline in student enrollments.
Factors contributing to the decline
The downfall of both online and offline EdTech in India can be attributed to several key factors:
1. Funding crunch: Many EdTech companies, especially startups, relied heavily on venture capitalto sustain their operations. However, the global economic slowdown and tightening of investment in the wake of the pandemic has caused a severe funding crunch, leaving many companies unable to survive without external support.
2. Student engagement: Whether online or offline, many students have shown declining interest in traditional coaching models. Reports indicate that student drop-out rates have soared, especially in online courses, where a lack of structured schedules and face-to-face interactions has led to disengagement.
3. Regulatory crackdowns: Both online and offline EdTech companies are facing increased scrutiny from the Indian government. The growing focus on safety standards for offline coaching centres, along with new regulations targeting online EdTech, has made it difficult for companies to operate freely.
4. Rising operational costs: As EdTech companies expand, the cost of content creation, technology infrastructure, and marketing has skyrocketed. Many companies have had to raise prices to cover these rising costs, making their services unaffordable for large portions of the student population.
5. Shifting consumer preferences: With schools reopening and students returning to physical classrooms, the demand for online education has waned. Parents are also opting for more personalised learning experiences, and many are increasingly unwilling to invest in online platforms that lack tangible, in-person interactions.
6. Safety and infrastructure failures: Offline coaching centres have faced mounting safety issues, from fire hazards to building collapses. These incidents have damaged the reputation of offline institutions and have sparked widespread calls for greater accountability in the sector.