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Education Industry: An Opportunity for Start-ups

Every industry have some benefits and challenges for a start-up. Let's see from EduGorilla startup point of view 'why education industry is an opportunity for start-ups.'
BY Rohit Manglik
CEO, EduGorilla
Aug 01,2017

Housing the worlds largest youth population, India is currently the second most populous country in the world. According to a UN report, India will become the worlds youngest country with 64 percent of its population in the working age group by 2020. Going by these statistics, one cannot underestimate the significance of education for the youth. Not long before, an HSBC survey revealed that education is the ultimate goal of 51% of the parents for their children in India hence the fact that education industry is poised to witness growth in India is a foregone conclusion. Startups have received a fillip in India with the government according to a slew of incentives to the same. Hence it is not surprising that there has been a sudden boom in education start-ups in India.

Education Industry in India: Opportunities and Threats

The education sector in India, higher education, in particular, presents a huge opportunity for entrepreneurs. Currently, higher education contributes 59.7 percent of the market size, school education 38.1 percent, pre -school segment 1.6 percent and technology and multi-media the remaining 0.6 percent, according to Indian Brand Equity Foundation. At present, the higher education witnesses spending of over Rs 46,200 crore(US$6.78 billion) and is expected to grow at an average annual rate of over 18 percent to reach Rs 232,500 crore (US$ 34.12 billion)in next ten years. Going by these statistics, it is safe to say that India presents a huge market for educational offerings. Another good news for the Indian education industry is that enrollment for the age group 6-14 has been 96% or above since 2009. This proportion increased from 96.7% in 2014 to 96.9% in 2016, as per the latest ASER report.

Learning outcomes continue to however poor. For example, the ASER report highlighted with only 32% children in Std III could read simple words in English and only 24.5% of children enrolled in Std V could read simple English sentences. There is no standard metrics to measure and improve learning outcomes in youth. The education sector in India largely remains unorganized and fragmented segment. The outdated curriculum with little exposure to practical knowledge is one of the major drawbacks of India education system. Large student-teacher ratio and mushrooming of sub-standard educational institutions and coaching centres are another major impediments to the healthy growth of education system. There may be few quality players in the education system but there is no standard benchmarking system to identify them. Given this scenario, students are a confused lot not knowing where to go and whom to trust.

In spite of these drawbacks, this is certainly one of the exciting times for the education industry which is seeing a lot of action with the several players stepping in with their innovative business models and leveraging technology effectively to solve woes of the sector. The education sector today is dominated by mainly two trends: ventures working within the system to improve delivery of content to students and teaching quality, second: ventures geared to devising out- of- the- box solutions that have the potential to disrupt the ecosystem. However, both ventures have one thing in common: the role of technology is becoming increasingly critical for both kinds of education startups.

The burgeoning education start-ups are indeed a boon for the country. Imagine solving a tough mathematics problem with graphical illustrations or seeing a 3-D model of how a brain functions. Thanks to the proliferation of technology and education startups, learning has become so much interactive and fun filled activity. The education startups also have a great role to play in ensuring equity in access to education. A large number of prospective learners cannot access education due to various factors like remote location, inadequate infrastructure, shortage of teachers and the like. Edtech startups not only resolve the issue but are a great way to connect with other participants and the instructor. Teaching has now become a sought-after profession, thanks to the education start-ups. Today an educator has a wide range of options to choose from: Instructional designer, e-learning experts, curriculum developers, course designers.

Investment prospects

So what does it take to set up an education start-up?

As with any enterprise, the key is to identify a problem that you are trying to solve through a start-up. The problems in the education sector have been well-documented. It is important to pick up one thread from the board set of problems that confront the sector. For instance: EduGorilla aims to be a bridge between students and mentors by bringing them on a common platform and fostering a dialogue between them. Another thing to be kept in mind is that with education comes an aspect of social responsibility. This should form the guiding force of an educational enterprise. However, the journey may not be a smooth sail. It is difficult to build scale and stickiness in the market. Not only ed-tech enterprises compete with their counterparts but also schools and colleges. Another challenge is to battle free content that is available online. Convincing the students to give preference to value added material is hard. Coming to funding prospects, risk investors remain guarded on the prospects of the start-ups in this sector. It takes the time to build ed-tech startups as a brand. An important thing that has to be kept in mind is that improving the learning outcomes and hence the quality of education and not over of emphasizing the role of technology should be the ultimate aim of any ed-tech start-up. Also, it isnt easy to zero in on a particular business plan as this is the era of innovation. Unless you innovate, you are out of the competition. However, the prospects seem to be bright in the long run with technology having immense potential to ensure equity in access to education and lowering the cost of education. More importantly, one cannot underestimate the satisfaction that comes with running the ed tech startup: impacting the career of large number youth in India.

As with any enterprise, the key is to identify a problem that you are trying to solve through a start-up. The problems in the education sector have been well-documented. It is important to pick up one thread from the board set of problems that confront the sector. For instance: EduGorilla aims to be a bridge between students and mentors by bringing them on a common platform and fostering a dialogue between them. Another thing to be kept in mind is that with education comes an aspect of social responsibility. This should form the guiding force of an educational enterprise. However, the journey may not be a smooth sail. It is difficult to build scale and stickiness in the market. Not only ed-tech enterprises compete with their counterparts but also schools and colleges. Another challenge is to battle free content that is available online. Convincing the students to give preference to value-added material is hard. Coming to funding prospects, risk investors remain guarded on the prospects of the start-ups in this sector. It takes the time to build ed-tech startups as a brand. An important thing that has to be kept in mind is that improving the learning outcomes and hence the quality of education and not over of emphasizing the role of technology should be the ultimate aim of any ed-tech start-up. Also, it isnt easy to zero in on a particular business plan as this is the era of innovation. Unless you innovate, you are out of the competition. However, the prospects seem to be bright in the long run with technology having immense potential to ensure equity in access to education and lowering the cost of education. More importantly, one cannot underestimate the satisfaction that comes with running the ed-tech startup: impacting the career of large number youth in India.

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