The alarming financials of education services and products provider Byju’s, as evident from its recent disclosures, have led to much hand-wringing about the start-up ecosystem in the country. But it has far more profound and terrible implications for education in the country, currently in a state that can only be described as terrifying.
Last year, in the World Competitiveness Ranking of major economies by the Switzerland-based Institute of Management Development (IMD), India was ranked 59th among 64 countries on the education parameter. While the elite Indian educational institutions like the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs) do make an appearance on various global lists, for the most part it is a tale of neglect and underperformance.
A major reason is the lack of funding for public education in the country which results in poor teacher-student ratios, absence of facilities conducive to encouraging learning and poor quality of educationists. Private players in the business have just served to broaden the gap between those who can afford their sky high fees and those who can’t.
Over the last 10 years since it was set up, Byju’s has drawn private capital amounting to $5.5 billion from marquee investors like Blackstone, Abu Dhabi sovereign fund ADQ, BlackRock, Edelweiss and the Chan Zuckerberg Initiative. What’s more, spurred by its success in raising funds, many online tutorial bureaus (euphemistically called edtech firms) sprang up over the last few years, collectively raising billions of dollars in private equity (PE) and venture funds.
The excitement of the funders is understandable. The potential returns on every dollar sunk into an edtech startup are enormous. At the end of 2019, Byju’s valuation was around $6 billion. Today it is over $20 billion. This after it lost Rs 4,588 crore as per its delayed 2020-21 results. That too in a year when the pandemic lockdowns shut down schools and drove students to online platforms. With parents desperately seeking a way of addressing this sudden disruption, there was a rush to enrol for these digital platforms.
From being providers of supplemental education, edtech startups suddenly became the primary platforms of education in the country. Given their limited competencies, disillusionment soon set in and with enrolment rates dropping and losses mounting, many such firms went on a sacking spree by the middle of this year.
The failure of these startups shows up the limitations of online education which just two years ago was being touted as the future of learning. At the same time, it also draws attention to the terrible state of formal education in the country which is forcing students to seek teaching shops, both online and offline. Make no mistake, the various coaching centers that dot our cities are just another part of this unholy mix.
Imagine what the billions of dollars that these edtechs sucked in and blew up, could have done for the 12 lakh-odd impoverished schools in the country, constantly in need of funds and barely able to keep going. The war of words between the BJP and the AAP over a New York Times article praising the Delhi government run schools in the capital shows how rare and attention-grabbing even the mention of such a possibility is.
Of course, private capital which works on the bigger fool theory and looks to maximise the bang for its buck, couldn’t care less about such things. So it is futile to expect that even after these reverses PE moneybags will look elsewhere. The problem is that impact funding isn’t as well funded and the money available for education focused on long-term results is paltry. Despite an increase in the budget for education this year, the deficit is still huge and needs sources other than just the government.
The pity is there is a lot of online education which is absolutely top grade, taught by the best in the business and it is often free or nominally priced. On Coursera, a certificate course “Python for Everybody” in which you learn to program and analyze data with Python from the University of Michigan, comes with a starting fee of just Rs 3,878, with the option to read and view the course content for free. You could do even better by going to Khan Academy where you can do a comprehensive course on SQL absolutely free.Also read: India@75 | How can business leaders have a positive impact on society?