Ground level innovation should be Adtech’s focus on IPO

India’s edtech sector has attracted more than a fair share of media attention in recent years. However, the bad news is increasingly well known

With the epidemic and the closure of physical classrooms, the adtech industry has grown rapidly over the past two years. Investors quickly realized the potential and built a bellline – making edtech India’s third most financed sector in 2021, after e-commerce and fintech. According to an industry analysis, investments worth a total of $ 4.7 billion are spread across 165 contracts. To put it bluntly, the sector attracted investments worth only $ 0.44 billion and $ 1.4 billion in 2019 and 2020, respectively.

Outside of financial news, the mainstream media is full of stories of a high-pressure sales culture within some companies, often enticing poor parents into course subscriptions through mis-selling and misrepresentation.

The situation was so alarming that the Indian government was recently forced to issue a warning to citizens to take precautions against edtech companies. It encourages parents to carefully evaluate the free service offer and urges all school education stakeholders to be careful when deciding on online content and coaching through the country’s edtech companies.

How did we get here and what is the way forward?

Punting for high bets

Analysis of India’s Adtech space reveals two areas of concern. First, most edtech startups or firms are under tremendous pressure to drive growth at any cost – from user to customer payments and, ultimately, revenue. To be sure, this issue is not unique to edtech startups – most other industries put similar pressure on startups to grow faster. The reasons are obvious – visible growth among users or paying customers is the only way startups can increase their follow-up funding round. However, the pressure cycle is strengthened when the funding rounds lead to further growth.

The second and more systemic problem is the absence of innovation. Despite all the possibilities of technology that are available for use today, we still do not see many meaningful technology-capable innovations in the delivery of education. Take a look at the leading names in the Adtech space and most of them have a business model that revolves around the digitization of the course, instructional elements and even instructions. This digitization or learning experience of course content does not compel the development of any significant intellectual property (IP) or strategy.

Using technology to disrupt

Although we consider Covid-19 to be the biggest catalyst for edtech growth in India and around the world; An equal or perhaps greater credit due to the widespread penetration of smartphones with the nationwide availability of high-speed (4G) mobile and broadband connections. It could be that telecom or broadband companies and smartphone makers have done much more than Adtech companies. If the epidemic had hit us 10-15 years ago, online classes and digital learning simply wouldn’t have worked – both devices and connections were non-existent.

Creating a common business model on top of a newly discovered and active external environment is generally expected for early startups and it happened in the edtech space. Digitization of course materials or classroom instruction was the first normal step for previous startups. However, as the competition intensifies and the space becomes crowded, this strategy is now failing to provide any meaningful competitive advantage. Therefore, to spend on marketing requires an ever-larger battle chest; Similarly new financing rounds, and the rush for higher revenue growth.

Taking lessons from other industries, including mature business models, it is clear that the time has come for a new wave of AdTech startups to use technology more efficiently than their first generation counterparts to better deliver education. In other words, the Adtech sector with a clear focus on innovation is apt to be disrupted.

Pedagogy is an obvious area of ‚Äč‚Äčinnovation where digital tools can do much more than digitize classroom instructions. Further, a rigorous assessment of the impact of learning on students is another huge area where modern technologies like AI and ML can play a big role.

Focus on results

Technology can play a profound role in improving the quality of education. India’s new education policy recommends the use of edtech through app-based learning, online student communities and the distribution of lessons outside of ‘chalk and talk’. To implement this concept, edtech companies can work closely with schools and colleges to truly translate learning outcomes for students and teachers. Their focus should be on redesigning educational content and delivery mechanisms that actually improve the quality of both education as well as learning.

Some edtech companies have already begun using technology to identify and evaluate appropriate skill levels; Across multiple levels; Among the students. Technology is also being used to identify learning gaps to accurately identify what a student needs to learn a subject more effectively. From this moment on, it is easy to create personalized learning plans that help students get the most out of their curriculum.

These platforms can be used by school teachers to measure student performance because they provide truly unique learning and assist in constructive assessment.

Finally, the edtech industry must remember that the most important goal of using technology for learning is to leverage the ability to leverage opportunities for students regardless of their location, background or learning ability. It was precisely the promise of online education that enabled graduate students sitting in India or Singapore during the epidemic to access the same learning experience that their peers at Ivy League College in the United States were able to get. Next-generation edtech business models will do well to keep this goal sacred – a razor-sharp focus on world-class education democratization will help them create more sustainable business models that can withstand truly competitive competition.

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