The EdTech market in India has been growing consistently over the past few years, becoming one of the single largest drivers of investment in education in the region. In a post-Covid world where brick-and-mortar operations are back up and running, there has been a corresponding impact on new customer acquisition and retention rates, resulting in a slowdown of deal flow, as compared to 2021. However, the overall outlook for the sector looks promising.
Through this survey, DC Advisory and L.E.K. explore the complexities of how the diverse customer base and growing expectations are raising the bar for the value EdTech needs to deliver, to stay relevant.
The survey highlights key findings and insights:
- Customer satisfaction is low: Retention is a core problem amongst many EdTech providers in India with customer renewal likelihood not reaching above 50% in any segment. Primacy of learning and career outcomes came through clearly as the most critical factor driving customer choice and satisfaction.
- Market offering is limited: With Covid-19 induced need for online education reducing, hybrid solutions between online/offline offering could be the key to unlocking EdTech’s longevity.
Nitin Bhatia, Managing Director at DC Advisory says: “It is clear from this survey that EdTech needs to redefine its value proposition to stay relevant in a direct competition with offline offerings across segments. Businesses that can redefine and develop their value proposition before going to market could see higher multiples and interest from investors in the short-term.”
According to Danish Faruqui, Partner at L.E.K. Consulting, and a founding member of the firm’s Global Education Practice, “Macro factors like the reopening of physical classrooms and user dissatisfaction with outcomes across key EdTech segments have led to slower growth. The funding winter could further impact the sector. The way forward for investors and providers is to put ‘ed’ back in EdTech’ by focusing on the promise of better outcomes through personalized education at a lower cost.”
Putting the 'Ed' back in EdTech'
Research methodology
This survey covers findings from a comprehensive study, conducted by DC Advisory and L.E.K. Consulting, designed to understand the experience of EdTech users in India across four key segments: supplemental K-12, JEE/NEET/other UG test prep, adult test prep, and upskilling. As part of the research, current and recent users of EdTech products and services, covering different age groups, demographics, and grades, were surveyed to examine their areas of dissatisfaction as well as willingness to recommend and continue using the products and services.
About the authors
Nitin Bhatia is a Managing Director in DC Advisory’s Mumbai team, with over 16 years of Education and Technology & Software experience.
Gaurav Mittal is a Director in DC Advisory’s Mumbai team, with nearly 15 years of investment banking experience across Technology, Media and Education sectors.
Danish Kamal Faruqui is a Partner and founding member of the Global Education Practice at L.E.K. Consulting. He frequently advises private equity investors and leading education companies across the full education spectrum.
Ashwin Goel is a Principal at L.E.K. Consulting with dedicated education sector experience across all segments.
About DC Advisory
DC Advisory is an international investment bank committed to making a difference. As part of an established global business we offer access to over 650 professionals in 22 locations throughout Asia, Europe and the US. Across 11 industry focused teams, we offer tailored, independent advice on M&A, debt raisings and restructurings, private capital and access to unrivalled Asia investment knowledge. For more information, visit https://www.dcadvisory.com/about-us/
About L.E.K. Consulting
We’re L.E.K. Consulting, a global strategy consultancy working with business leaders to seize competitive advantage and amplify growth. Our insights are catalysts that reshape the trajectory of our clients’ businesses, uncovering opportunities and empowering them to master their moments of truth. Since 1983, our worldwide practice — spanning the Americas, Asia-Pacific, and Europe — has guided leaders across all industries, from global corporations to emerging entrepreneurial businesses and private equity investors. Looking for more? Visit http://www.lek.com
