The bait and hook of EdTech

India’s EdTech sector, among the fastest growing in the world, is sending families into debt with promises it cannot keep

May 07, 2022 11:09 am | Updated May 08, 2022 01:40 am IST

Carefully thought­out regulation is needed for the EdTech industry before it becomes too late

Carefully thought­out regulation is needed for the EdTech industry before it becomes too late | Photo Credit: Getty Images/iStockphoto

Alisha*, a mother of two, married to a taxi driver, believed educating and skilling her children would help the family escape the cramped chawls of Mumbai. Over the Diwali break in 2021, an advertisement for a three-day coding boot camp, organised by Lido Learning, an EdTech company, was posted on her school messaging group. She grabbed the chance and enrolled her Class IX son.

Four days later, Lido representatives came home with a pitch. “They said my son had a bright future. But to achieve his potential, he had to enrol in a three-year course,” says Alisha. The three-year course in Physics, Maths and coding would cost ₹25,000 annually: nearly twice the yearly school fees.

Alisha sought time. The salesperson gave them 10 minutes. As the clock ticked, the offer became more irresistible. “They offered an EMI option and full refund if we didn’t like the classes. The clincher was when they said my son would be given an internship at Microsoft at the end of three years. This was an opportunity people like us don’t get.”

False promises

The family borrowed a laptop and waited for the classes. The EMI repayment started, but the classes didn’t. The EdTech representatives had lost their jobs, and the company remained non-responsive.

Lido did not respond to queries from Magazine.

Alisha’s story echoes in thousands of households across the country. Caught in the swirl of an EdTech boom, many families have been lured with false promises into vicious debt traps.

These concerns reached the Parliament in December when members sought regulation of ‘predatory practices’ by EdTech companies. The Ministry of Education issued an advisory warning parents against ‘blindly trusting edtech advertisements’, ‘taking out loans’ and to ‘understand edtech marketing strategies’. But EdTech is unstoppable: in India, the sector is among the fastest growing in the world, estimated to be growing at 39% annually. By 2025, over 37 million people are expected to enrol with digital learning platforms.

Current market size: K-12 = $1.7 billion; Post K-12: $ 1.7 billion
Funding (2016-April 2021): $4.121 billion
No. of startups in India in 2020: 4,450
Estimated paid users by 2025: 37 million
India’s market size by 2025: $10 billion
Number of unicorns: 6 (Byju’s, Unacademy, Eruditus, upGrad, Vedantu, Lead)
Sources: INC42, Holon IQ and RBSA advisors

A large part of the growth is driven by the K-12 (kindergarten to Class XII) segment that encompasses nearly 250 million school-going children. Since 2014, the Indian market witnessed the launch of 4,450 EdTech startups, of which six joined the $1 billion ‘unicorn’ club. In such a competitive space, the chance of failure is high. An EY report in 2021 estimated that 1,150 EdTech start-ups have shut down; this year, several large companies started laying off staff.

Perform or perish

“It’s just a game of valuation for these companies. It isn’t about education at all,” says Pradeep Poonia, a software engineer and activist who has faced defamation suits for flagging misleading advertising campaigns by EdTech companies. “It is the sale of education.”

This sense of ‘perform or perish’ in the marketplace puts relentless pressure on its foot-soldiers, business development associates (BDA) or salespersons who are the primary point of contact between the companies and parents. “Salespersons are given 15 days to deliver on their targets, else they will be fired. It is a brutal industry,” says a former head of the Bengaluru sales division for a major EdTech company.

Much like India, China’s EdTech industry was booming and complaints came in about misleading ads and predatory practice

Much like India, China’s EdTech industry was booming and complaints came in about misleading ads and predatory practice | Photo Credit: X.J.G. Satheesh

“Sales prey primarily on fear and on telling parents that they are missing out. The tactic of proving that children are lagging behind their peers is really common. It works for lower income households,” says the sales head.

India EdTech Consortium, a grouping of multiple companies formed under the Internet and Mobile Association of India, did not respond to emails, calls and messages.

Leaked data

In January 2022, Sunil Mishra, a senior journalist with a Hindi newspaper in Meerut, Uttar Pradesh, was lured into a course through the offer of ‘scholarship’ for his six-year-old child, who was doing well in school. “I had not applied for a scholarship, nor had I given details of my child to anyone before,” he says. A year prior, he had applied to multiple schools for his child and suspects one of these schools had leaked the data.

The promise of a scholarship was alluring and he consented to take part in a ‘video consultation’. The bait was dangled and the trap set. He soon realised that the even with a ‘scholarship’ he’d have to pay ₹42,000 as fees. He baulked. The salespersons brought out their arsenal of inducements: cashback and easy loans. “There was so much emotional blackmail. At one point, they asked my wife if I wasn’t interested in my child’s education,” says Sunil. Soon, it all unravelled. The course lasted all of one month, but the EMIs are still being deducted.

Lokesh Talikatte, President of Recognised Unaided Private School Association in Karnataka, believes data of parents like Sunil are given by large private schools who collaborate with EdTech representatives.

Lokesh runs six schools in rural Karnataka. Over the past five years, nearly half of the 3,200 children have enrolled in these digital platforms. Some have spent nearly three times the school fees. “There is a craze among parents who are repeatedly told that merely attending school is not enough. These EdTech companies intend to replace the schooling system and have become our competitors,” he says.

If it is indeed a competition, then schools are outmatched. Schools in India come under a plethora of laws that determine payment to teachers to stringent infrastructure requirement to fee structures. Schools are mandated to be non-profit. On the other hand, EdTech companies aren’t regulated. In fact, National Education Policy 2022 states online and digital education must be promoted.

“It just isn’t fair at all,” says Lokesh.


Carefully thought-out regulation is needed for the EdTech industry before it becomes too late, says Rishikesh B.S., who leads the Hub for Education, Law & Policy at Azim Premji University. “EdTech growth is scarier. At this pace of growth, it’ll be unimaginable to regulate. And EdTech unchecked will be dangerous,” he says.

Much like India, China’s EdTech industry was booming and complaints came in about misleading advertisements and predatory practices. Since July 2020, the Chinese government initiated a slew of measures that prohibits private tutoring companies from making a profit, raising capital and even teaching high-school curriculum.

“This cannot be a permanent solution. It’ll only buy time until we can decide what to do with this space. It may end up stifling innovation, which is counter-productive,” says Rishikesh.

He believes the positives of EdTech has to be leveraged, particularly as a collaborative platform to spur innovation among students. However, its current marketing as being ‘a solution to an ailing schooling system’ is contrary to ‘principles of good education’.

“EdTech promotes a dangerous learnification of education that focusses on outcomes, rather than what is being taught or why something is being taught,” he says. “It’ll encourage more parents to bypass the school system entirely. Families will end up spending much more on these products because of the perception that it is needed for good education. But most concerning is the impact on children. Schools are not just places of learning from teachers, but from learning from each other. What will happen to the process of creating social beings when digital education becomes the sole mode of learning?” asks Rishikesh.

Going hybrid
Meanwhile, in the post pandemic scenario major EdTech firms are embracing the hybrid model, and physical stores are back. Byju’s, India’s largest EdTech company, already operates 80 tuition centres and is investing $200 million to open 500 more. Unacademy, the second-largest player in the market, has also opened their first offline ‘experience centre’ in Delhi with plans to open more such stores in North India. On the other end of the technology spectrum, many expect blockchains to become an integral part of the logistics of education. Blockchain is a decentralised digital ledger, allowing for certificates, diplomas and degrees from online courses to be stored safely for viewing from anywhere in the world.

There are no easy answers to this. But as parliamentarians clamour for regulation and government intervention, Pradeep has a word of caution. Over-regulation may strengthen the monopoly of existing players while keeping away newer entrants. “An immediate thing to do is to stop companies from taking large sums of money for year-long courses. Parents should be allowed to pay on a monthly or quarterly basis. This will give parents the option to opt out without being in a position to seek refunds,” he says.

Meanwhile, in Mumbai, each month is a reminder for Alisha of the trap her family has fallen into. Every month, ₹2,048 is deducted as repayment to a loan financing company for classes that have not taken place. She spends her days making calls to the EdTech company and sending emails. She’s losing hope. “My son will be going to Class X and he will need tuitions. I don’t know what to do now. We can’t afford all of this. I may have to take up some part-time work to make up for this mistake,” she says.

*Name changed t oprotect identity.

The writer is an independent journalist based out of Bengaluru.

Top News Today

Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in


Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.