Once heralded disruptors of traditional education, Indian edtech giants are experiencing hard times. Pandemic high-fliers such as BYJU’S and Unacademy have flopped in the post-COVID era. There are many reasons explaining this downward trajectory.

The Rise and Fall of Indian Edtech Giants: Lessons from Their Collapse

First, overreliance on pandemic-related demand led to unrealistic expectations for growth. As schools reopened, the boom in online learning came to an end and companies found themselves with a shrinking audience. Second, their aggressive growth strategies turned out to be unsustainable. Companies like BYJU’s made a push for growth through acquisition, with companies like WhiteHat Jr. and Aakash Institute.

But these moves also stretched resources and introduced inefficiencies, as operational synergies were often absent. Third was the problem that their business model was unsustainable. Deep discounts, over-the-top marketing, and fat sales commissions fueled a “growth-at-all-costs” culture. Although these strategies initially lured in users, they did not deliver profitability. BYJU, for instance, had huge losses to the tune of ₹4,588 crores in FY21.

Pressure-selling techniques also undermined consumer confidence. Reports of unethical business practices, crafted to drive parents into expensive subscriptions, sparked lawsuits and pushback. Such controversies hurt their reputations, scaring off long-term user loyalty. In addition, there were similar offerings by many edtech players with little or no differentiation. Unfortunately, this resulted in competition for similar courses and a dilution of eligible content formats. Weakened by its incapacity to cater to the country’s remarkable linguistic and cultural diversity, effectively alienating regional markets in the process.

The worldwide slowdown of funding that started in 2022 compounded the sector’s struggles, leading to mass layoffs and operational cuts. At the same time, other advertisements were no less misleading, and unethical practices made their work even more difficult, as that also raised awareness of regulatory oversight.

Nevertheless, the promise of edtech in India is still enormous, fueled by a population that is both digitally penetrated and under-served. To recover companies must embrace sustainable growth strategies, prioritize ethical practices, and produce localized, quality content. Indian edtech still has a chance to live up to its transformative promise — but it just needs to embrace hybrid models and the trust issues of consumers. The ultimate lesson from the current failures: growth must be tempered by responsibility and innovation if it is to last.

FAQs

Why did Indian edtech companies face a downturn after the pandemic?

The demand for online learning dropped as schools reopened, exposing unsustainable business models and over-reliance on temporary growth during the pandemic.

Can Indian edtech companies recover from their failures?

Yes, by adopting sustainable practices, focusing on localized content, and building trust, edtech companies can regain their footing in the evolving education landscape.