When US-based edtech platform Coursera’s chief executive officer Jeff Maggioncalda used to visit India during the funding boom era of 2021-22, everyone would caution him about his foray into the country.
“I remember when Byju's was hot. Every time I came to India, everyone was saying 'You are going to get swallowed by Byju's. I said, 'I don't know, maybe I will. But, I'm gonna stay focused. And now there's a lot of 'Oh, what happened in Indian edtech?' Look, this is part of entrepreneurship,” Maggioncalda told Moneycontrol.
“In India, the value chain is pretty big. I think a lot of the Indian edtech companies tried to do it all themselves... Yes, the learners do have a broad set of needs, but it doesn't mean that you should try to do it all. Just because the capital is available, doesn't mean that's a good business strategy,” he added.
As central banks have raised interest rates over the last couple of years, tech valuations have fallen off a cliff. Also, capital has become scarce for the tech sector which typically focuses on experiments for long-term growth, rather than short-term profitability.
Coursera currently has a market capitalisation of $2.9 billion, down 32.5 percent from the $4.3 billion valuation at which the company went public in early 2021.
For comparison, Byju's was valued at $15 billion in early 2021. As the company raised more funding subsequently, its valuation hit a peak of $22 billion in early 2022. Since then, the Indian edtech unicorn has gone downhill as some investors reneged on their cash commitments and it got enmeshed in multiple legal showdowns with stakeholders.
Now, global private equity major Blackrock, an investor in Byju’s, has cut the company’s valuation by 95 percent to $1 billion.
“Indian education will be one of the most important industries in the world over the next decade or two. There's just no doubt about it. How are you going to win? Who's going to win? What's the right solution? We don't know for sure. If it's a big opportunity, and capital is pretty cheap, it's tempting to make a big, bold move. But it's entrepreneurship. Sometimes it doesn't work,” said Maggioncalda.
The ongoing funding winter and Byju’s woes have collectively hit the Indian edtech ecosystem hard.
As a result, funding into the country’s edtech industry, which had been a standout performer during the pandemic, dramatically plummeted to $712 million in 2023, down from $5.33 billion in 2021, according to data by Tracxn. It has also fallen massively from $2.9 billion last year.
Last year, the number of funding rounds in edtech companies slumped to 69 from 364 in 2021 and 242 in 2022.
“In 1996, I was trying to raise my first round of money from Mayfield and talked to Van Auken (Partner Emeritus at the venture capital firm). And he asked me 'Jeff, are you a vitamin or a painkiller?'. The other thing he said is most startups die from indigestion, not starvation. They try to do too much. And when the money is easy to get, the aspirations grow,” said Maggioncalda.
“Coursera is offline, but we are not the offline party. We partner with other institutions or startups for that. We've chosen what we do well. And I think that's one of the reasons why we have done better than other companies,” he added.
Coursera's primary focus is to drive adoption among young Indian college students and workers seeking to upskill for better job prospects. India is the second-largest market for Coursera globally, with over 23.4 million learners and 57 million course enrollments.
Acknowledging that most Indian users don't pay for courses, Maggioncalda sees the real monetisation opportunity in India through partnerships with universities and enterprises. The new education policy allows 40 percent of college credits to come from online courses, and colleges pay for students to take courses that enhance employability.
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