Do you ever wonder that WHEN Ed-Tech Startup born in India and from where this journey started? While thinking about this, the first picture comes in our mind is of the startups like Byju’s, Unacademy, Gradeup, and various EduTech startups, which is providing us the facility of “study from anywhere.” These startups give us the privilege to get knowledge without any time or location barrier. They provide services to every age group, such as primary school students, to people preparing for competitive exams such as NEET, IIT-JEE, CAT, UPSE, and more.
But you will be surprised to know that the ed-tech startup concept was very different when it was first started in India back in 1994. Yes!!! The first EduTech startup was started in 1994, and it is Educomp Solutions. Let’s have a look at its journey.
Rise and fall of India’s First Ed-tech Startup
Educomp Solutions, established in 1994 by Shantanu Prakash, has seen India’s biggest technology-driven Ed-tech startup and is a pioneer in Education Process Outsourcing (EPO) in India. The organization gives the overall solution in the ed-tech area for the K12 section (Kindergarten to Class 12), for example, delivery (IT education, web-based mentoring), creation (digital content), and the management of learning (professional development and retailing of educational content). Educomp is the first player to go into the interactive media content market through Smart Class. Smart Class is one of the core business fragments of Educomp; it added to 62% of income in 2010.
The idea of ‘Smart Class‘ gives his firm progress quickly by offering PCs to schools to sell technology for digitizing educational content.
Educomp had the first-mover advantage in the Ed-tech startup and tasted the fastest achievement. The organization was recorded in 2006 and listed at Rs 125 per share. Throughout the following years, word spread about Prakash’s endeavor, and a few companies were set up attempting to copy his plan of action.
Within twenty years, this Ed-tech startup set up over 25 branches worldwide, and by 2012 income reached Rs 1,000 crore through the ‘Smart Class’ model. The stock likewise reached a peak of Rs 1,130 in January 2008.
Only five years after the IPO, Educomp had started offering its services to around 20,000 schools all over India. At this point, Prakash was seen as the savior of the ed-tech sector.
Prakash gradually began getting fretful. He dreamed that his Ed-tech startup needs to expand quicker. A progression of acquisitions followed. He entered fragments like online test services and skilling.
All the while, the private schools began getting forceful about pricing. Private schools have enormous pricing power. Prakash’s Educomp could grab deals at any expense yet couldn’t deliver them because of the heap of receivables.
When the organization began getting a bad reputation for delays, the debt inconveniences started in 2012. Previous organization workers said that Prakash underrated the borrowings. Educomp’s revenue falls to Rs 733 crore in FY13 from a peak of Rs. 1,076 crores. From that point, it was a descending spiral.
The borrowings rose from a simple Rs 366 crore in FY08 to an astounding Rs 2,332 crore in FY17. In each financial exchange, Prakash was the face behind getting loans authorized.
The shocking news comes when the legal auditor (Haribhakti and Co.) said that they couldn’t make a ‘fair’ perspective on Educomp’s financials because of certain irregularities in the organization’s balance report.
This was the first time when that Prakash’s name was being hauled for alleged fraud. In any case, he reliably rejected that wrongdoing. When his name was corrupted, there was no returning possible for him or this Ed-tech startup.
Ed-Tech Startup of NOW
You have seen the rise and decline of India’s’ first ed-tech startup. Its concept was different from today’s model. The startup-like Byjus’s, Unacademy, Gradeup, is disrupting the ed-tech sector. This pandemic has accelerated the growth of ed-tech providers. The COVID-19 has been a turning point for India’s EduTech sector. The lockdown and dread of COVID-19 spread have taken schools, universities, and coaching on the internet.
August 2020 saw the Ed-startup, Byju‘s, claimed by Think and Learn, obtaining the coding stage, WhiteHat Jr., in a $300 million deal. The thought was to make the fastest growing sector of coding in education technology accessible to students. This is only one case of how quickly this sector is growing.
According to DataLabs research, test prep and K-12 Ed-tech startups together to be estimated at $1.3 Bn by 2021, which implies that the Indian edtech market won’t be seeing any significant changes. The ed-tech segment is additionally estimated to spend more than $6 Bn every year on augmented and virtual reality technologies by 2023.
Additionally, the strategies likewise appear to be set up for better technology adoption in training like web-based learning stages, AI-driven customized learning solutions, video-based learning, peer-to-peer learning, and so on in government and private educational institution.
EdTech, which was already gaining a healthy double-digit, every year growth before Covid-19, suddenly got a huge boost with an inflow of investments, acquisition, up-gradation in offerings, and more players quickly shifting and adding students because of the very cheap Internet data charges.