Tough times ahead for edtech unicorns

Customising Syllabus

- Many edutech startups slashing fees for onine classes

- Planning to set up offline centers

- Unicorn Byju's to open 500 centres across 200 cities

- Vedantu reducing fees almost by 75% for long-term courses

Bengaluru: Indian edtech startups are adjusting their sails to the winds of change that is sweeping the education sector with offline classes coming back with a bang. As schools reopening, many of these edtech startups are opting for hybrid mode of teaching to retain their user base.

Some even have slashed the prices of their online training modules, while some others are actively scouting for offline acquisition opportunities to provide students more options.

"Clearly, there is an attempt by edtech companies to adjust their business plans as per the new environment. Apart from cost optimisation moves, some are opting for hybrid model as students are increasingly opting for offline classes," said a source, who helps startups in raising funds.

Apart from acquiring Aakash that provides offline classes for JEE and NEET examinations, the edtech major Byju's has also launched offline tuition centres for students in class 4-10. The most valued startup in Indian unicorn space plans to open 500 centres across 200 cities this year and will invest around $200 million in next two years to grow this segment.

Similarly, another edtech major Unacademy has also announced the launch of physical coaching for NEET & JEE examinations. It has also entered into physical classes for foundation courses of class 9-12 students.

Vedantu, another unicorn in the edtech space, is making its online classes attractive by reducing fees in certain segments. Prices of its long-term course for grade 6-12 have been slashed to Rs 5,000 from earlier Rs 22,000–Rs 25,000. Through such reduction in prices, the company aims to tap tier-II cities in a big way, which will help it to reduce dependence on tier-I cities.

Edtech startups are going through a disruptive phase with many facing risks to their online business model as offline classes reopen in the wake of receding Covid infections.

In the last few months, players like Unacademy & Vedantu have laid off staffers in their bids to optimise cost. While Unacademy has fired around 1,000 employees, Vedantu laid off more than 600 staffers in two phases.

"With schools reopening and starting of offline classes, there may be some slowdown in edtech segment," Siva Prasad Nanduri, VP & Business Head of IT Staffing at TeamLease Digital told e Bizz Buzz.

Valuation of many edtech startups have grown exponentially in last two years. Currently, there are six edtech unicorns- Byju's, upGrad, Vedantu, Unacademy, Eruditus and Lead among 100 strong unicorn club of India.