Taran Singh, CEO Melvano: Organic growth will command profits in Edtech

The Edtech space has witnessed combined funding of $2 Bn in 2020 compared to $553 Mn in 2019

The nationwide lockdown has triggered a surge in online learning apps, with edtech companies witnessing growth in revenue & profits likewise. The Edtech space has witnessed combined funding of $2 Bn in 2020 compared to $553 Mn in 2019. With more than 4,500 startups in the edtech space, the market is expected to grow by $30 Bn in the next 10 years, according to reports.

As all the offline institutes were forced to shut down, Byju's turned profitable in 2019 with revenue of $186 Mn with $2.7 Mn in profits and doubled its revenue in 2020 to $378Mn. Vedantu, a K-12 platform recorded a 4x increase in revenue in 2021 with the current revenue being around $60 Mn. Whereas, on the other hand, Unacademy reported a 4x increase in revenue by 2020, standing at about $11.9 Mn with $41 Mn in losses.

Taran Singh, CEO of Melvano, a fast-growing test prep platform, said “Focusing on chasing growth vs profitability has always been a dilemma for Edtech startups. Chasing quick growth, also known as blitzscaling, requires huge investment in the marketing department to increase the penetration into Tier 2 and 3 towns. However, as one can’t keep nitro-boosters forever turned on, the same holds true for blitzscaling”

“Sooner the Cost-of-Acquisition (CAC) will become so high that unit economics would stop making sense. Common acquisition channels, like Facebook, Google, etc, are beginning to saturate since they have become fairly common adding to high CAC. Many mushrooming edtech startups would be forced to rely completely on organic channels, to avoid such a high CAC or else look for overseas markets with low competition & high lifetime value customers (LTV). The ability to grow organically will be the key factor commanding the profitability in the case of Indian edtech startups,” adds Taran Singh.

Melvano, a fast-growing AI-driven test preparation app for JEE and NEET, was awarded the prestigious Sri Chinmay Deodhar award by IIT Madras for ‘Innovative Project’. This year, more than 10 students from Melvano have scored 99 percentile and above in JEE Mains 2021. The startup is in talks to raise $2 Mn from VCs.

Even post-pandemic, when the institutes reopen, India’s edtech platforms are hoping to hold user interest in the online medium. Certainly, the country's edtech spaces are all set to gain the biggest market share in upcoming years.

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