Home / News / India /  Edutech firms struggle to capitalize on surge in users

After schools and colleges across the country shut down earlier this month, some online education startups were expecting hordes of students to flock to their platforms. A few weeks later, while user traffic has surged, revenues have actually dropped, according to the companies.

Traffic at some leading online education portals has surged more than 50% as parents and students desperately seek to avoid disruption in learning. But as uncertainty grows around entrance exams, overall education spending is declining.

“Our traffic has increased this month by 1.6 times and we think that people will not stop spending on education even in these times," said Akshay Chaturvedi, co-founder and CEO of Leverage Edu, a startup that offers career guidance to students and connects them with universities. “But there are cases where people who are worried about their jobs or family businesses may choose to hold back spending for 2-3 months to see how the situation evolves."

Before the covid-19 outbreak, education startups led by Byju’s had become favourites of venture capital investors who are betting on a boom in online education for many years to come. According to a May 2017 report by KPMG, online education spending in India will increase to $1.96 billion in 2021 from less than $250 million in 2016.

As covid-19 started to infect more people, some education startups launched marketing campaigns to either capitalize on the moment or save their revenues from declining.

On 11 March, Byju’s, valued at $8 billion, said it would offer all its learning programmes free of cost on its app till the end of April. This covers programmes for classes 1-12. Last week, Byju’s splashed crores of rupees on front-page newspaper ads to attract users.

Byju’s co-founder Divya Gokulnath said in an email that user traffic has surged 60% since the company opened up its app on 11 March. But she declined to comment on whether Byju’s revenue fell this month.

On 18 March, Unacademy, India’s second-largest education startup, said any educational institution could use its platform to conduct classes for free “till the situation improves".

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