Indian teaching startups make work for idle thumbs

TO ANY outsider it looks as if the children have been hypnotised by yet another smartphone game. As the spying elders in a TV ad try to break the spell, the sprogs flash a grin at their screens. “It’s maths, dad,” giggles a fifth-grader to her father. The company behind the ad, Byju’s, sells an educational smartphone app which has been downloaded 14m times since its launch in 2015.

Byju’s is one of many education technology (or “edtech”) startups that have emerged in India in the past few years. Their target is vast—some 260m pupils in schools and over 30m graduates who train in order to pass entrance tests for a seat in medical, engineering and elite management institutes. KPMG, a consultancy, reckons the industry will grow eightfold to be worth around $2bn by 2021.

Much of the expected growth is due to India’s woeful record in primary-school education, where teachers are scarce, infrastructure crumbling and the culture one of rote learning. Almost half of students from the fifth grade cannot read texts meant for second-graders. Private tutors are called upon. Buses are plastered with ads for cramming institutes claiming to have coached exam “toppers”, a status that rivals cricket superstardom. (A rival to Byju’s is inevitably called Toppr.) According to one estimate, a quarter of all Indian students attend private coaching classes.

Byju Raveendran should know. A few years ago, he used to attract 25,000 students to a particular stadium in Delhi, and fly to nine cities every week to teach high-school maths. Youngsters would learn shortcuts and tips to ace the fiendishly hard Common Admission Test for the best schools. Given the enormous size of the classrooms, it was impossible to make the sessions interactive, so Mr Raveendran came up with the idea of converting the lessons into video gobbets and hosting them online.

The business has 900,000 paid users who spend over 50 minutes on the app each day—metrics that media firms might envy. Around nine-tenths of customers of Byju’s renew subscriptions despite an annual price tag of $350-450, not far from half the median annual income of an Indian. Sales for the twelve months to March 2017 reached $40.6m, and the firm says it expects to turn a profit in the current financial year. Prominent investors including Silicon Valley’s Sequoia Capital and China’s Tencent have put in a total of $200m, and Byju’s has a punchy valuation of $800m.

That is despite a patchy record for Indian edtech firms. Indian schools are price-sensitive and tend not to be early tech adopters, says Kartik Aneja of Nayi Disha, which makes educational digital games. Educomp, a maker of technology-enabled classroom products, used to sell expensive digital content and multimedia equipment to schools and was valued at over $1.4bn in 2008, but filed for bankruptcy last year. Byju’s managed to bypass schools by selling directly to students and parents.

Other challenges remain. The company has to send out physical memory cards to students who might not have sufficient internet bandwidth to download materials (a previous satellite-based method proved unreliable in bad weather). And a network of hundreds of agents is needed to collect cash from parents unused to paying digitally, adding to costs.

Smartphones will spread, broadband will improve and online payments should become simpler. Less certain is whether parents will allow their kids to learn chiefly from screens. Little verifiable evidence exists that methods devised by Byju’s succeed as well as customers hope. It would be an unusual child, though, that could be left unmoved by one bit of maths content advertised by the firm—Shah Rukh Khan, a Bollywood star, guiding a troupe of dancers rhythmically laying out a proof for Pythagoras’s theorem.