Education Technology in India Kaizen INSEAD Team May 2013
Education Technology in India Kaizen INSEAD Team May 2013
Education Technology in India Kaizen INSEAD Team May 2013
www.kaizenpe.com
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Section 1: Global Ed-Tech Trends and Segments
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Global Ed-Tech Overview
Ed-tech broadly refers to the use of novel technologies in education. Ed-tech could lead to pedagogical
benefits or a more efficient backend
DEFINITION Among other areas, we understand Ed-tech1 to include education related hardware, digital delivery and
/ SCOPE content, online and mobile platforms and enablers such as Learning Management Systems and
assessment tools
See detailed classification on slide 3
23% growth in e-Learning from $91 bn in 2012 to $255 bn in 2017 (Comparable total education CAGR
MARKET of 7.4% for same period) Source: IBIS Capital
SIZE AND - Within e-Learning, K12 with 2012-2017 CAGR of 33%, Higher education CAGR 25%, Corporate
GROWTH training CAGR 8%
- Other fast growing markets: Social/Communities (41% CAGR), Serious Gaming (30%), Language
learning (20%)
1. We do not include eBooks and Rentals sites of physical text books such as Chegg in this study. Chegg’s pivot from a text book rental 3
platform to becoming a central hub for students with information of courses, reviews etc. could be of interest in the Indian context.
Ed-Tech Classification
1 2 3 Platforms /
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Hardware Digital Content content Enablers
aggregators
Special Digital /
MOOCs2 and
Education Interactive LMS
variants
related HW Content
Social / Collaborative
LMS
General Classroom
Serious Focused
(iPad, smart management tools
Educational communities /
phones,
Games offerings
consoles)
Adaptive Learning
Technologies
1. Can be further sub-divided into administrator focused and educator focused offerings 4
2. Massive online open course
Global Ed-Tech
Example
Players
• Larger players with • Larger players (Pearson) • Limited # firms with • Focus on cognitive
multi-purpose as well as upstarts such scale much like app learning
Trends hardware vendors as Kno dominate, digital developers in general
dominate (e.g. Apple players often partner with
iPad) traditional publishers
• Low cost innovation • Major opportunity for • Major opp but • Potential for Indian
Implications possible but with Indian players challenging to achieve players to emerge,
for India challenges (Akash scale in app as games are often
fiasco) development custom-made (low
• Development for development cost)
1. mEd market to grow from $3.4bn in 2011 to $37.8bn in 2020 feature phone market 5
Global Ed-Tech
Example
Players
Social / Assessment
4 LMS
Collaborative LMS / Analytics
Open Source
Example
Players
Example
Players
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Education segment: Core
1 2
K-12 Higher education
Future growth • 14%; largest target population • 13%; Inefficient public system;
– key drivers globally preference for private except for very
reputed schools such as IIT
1 2 3
Pre-schools Tutoring Test prep
4 5 6
Vocational training Corporate training Teacher training
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Indian Ed-Tech: Hardware
Sample
players in
India
• Lower end of market: Market attractive for any company able to provide
low-cost hardware; important to source (part of) hardware locally for
Trends / winning govt. contracts, players with local consumer electronics design
Opportun- OR reach to government could benefit
ities • Higher end of market: General purpose tablets likely dominate although
firms bundling content with HW (e.g. Pearson) could win, classroom
hardware such as smartboards will continue market penetration
Source: Secondary research; Primary interviews 14
Indian Ed-Tech: Digital Content (Classroom + Digital
Content)
Sample
players in
India
Sample
players in
India
• Often customers do not have access to/ time for classroom education
Customer
need • Flexibility of time and convenience of location (last mile important for
DLP)
Sample
players in
India
Sample
players in
India School management eBooks creator VLE LMS
Sample
players in
India
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Several changes in India’s education landscape are
promoting the use of Ed-Tech1
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Quotes from experts about state of Ed-Tech in India
and its future
“Low Internet
“Ed-tech penetration in India penetration and
today: 3/10. ” payment
“It will take at least another infrastructure a
3-5 years” challenge..”
High High
potential, potential,
category category
Dedicated
unlikely to unlikely to
Hardware be open to be open to
smaller smaller
Ed-Tech segments
firms firms
Currently
MOOCs Limited
DLPs English Employee
penetration
learning, self-paid
And (Metros & XX
programmin courses to
focused Tier 1) Huge
g, etc. upskill
scope in
learning
Tier 2/3
Untapped Offered for
Used for Evaluating/
market; few entrance
Enablers Focus on pvt internal training
focussed exams; online
schools assessment of teachers still
+ Assess- Assessments,
players. Opp in assessments to
employees, relatively
ments low stake become
LMS, ERP and during nascent in
semester increasingly
recruitments India
exams relevant
Enablers
K-12, Higher Ed, Fedena, WizIQ, Upside • Need to be assessed on a case by
excluding
Tutoring learning case basis
assessment
• Need for capital limited; required
only if need arises in future to
K-12 Educational Initiatives
scale up through brick-and-mortar,
or to provide equipment to schools
• Opportunity in low-stake
Higher education No major players
assessment
• Might need capital for establishing
Vriti, EntrancePrime, testing centres/buying equipment 2
Assessment
Test prep thecatonline, capable of providing real 5
Eduwizards simulation of IIT/CAT entrance %
examinations
• Limited need for capital, as market
currently is nascent. However, as
Corporate training Mettl, Aspiring Minds outsourcing of training and
recruitment increases, capital will
Scale be required for scale-up
Highly Attractive 2
5
Moderately Attractive
%
Mildly Attractive
Least Attractive
Source: Primary interviews 27
Considerations while investing in Indian Ed-tech firms
Entry • Potentially attractive entry valuations as education section has taken a hit in
valuations India off late, interest in sector lukewarm
• Pure play tech innovation likely to be led by the US, tech plays with blended
Product service components leveraging low cost base could be more promising
strategy • Cloud/online/mobile delivery more promising than on-premise
• Segments: Selling B2B to certain segments that are highly fragmented such
as K12 may be a challenge for smaller players, B2C requires high brand value
Choice of and/or high marketing costs
end • Geography: Start-ups targeting western (US) market have better shot at
markets scale / exit, start-ups targeting India alone can expand in other price-
sensitive and emerging markets
- Two India’s: lower-middle to upper class (likely focus) and BOP (volume market)
• Poor environment and track record for exits in India in general at present
• Trade sale and secondaries likeliest exit channels
Exit
• Ed-tech start-ups have better prospects of international exits if they target
conside-
international (US) market
rations
• Potential buyers: Large educational companies (e.g. Pearson), General/
Specialized tech firms (e.g., Blackboard), Telcos, Internet firms, PE firms
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Abhinav Sharma Dhananjay Vaidyanathan Rohini Chetan Ghurka
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