Published: 21st January 2022
With no franchise arrangement between EdTechs and colleges, how will it affect edu start-up ecosystem?
Vice-Chairman of AICTE, an EdTech-focussed VC firm and a CEO of an EdTech weigh in on what has happened and what can possibly happen
All eyes have been on the Indian EdTech boom for some time – especially the eyes of the Government of India and other regulatory bodies. After all, as per EdTech-focussed VC firm, BLinC Invest, India's EdTech market will be worth more than $3.5 billion by 2022 and just to give you a reference point, it was worth $735 million in 2019. There are already talks that the Ministry of Education, Ministry of Law, and Ministry of Electronics and Information and Technology (MeitY) are formulating a policy to regulate EdTech companies. But one of the first regulations is already here.
On January 18, the UGC (University Grants Commission) and AICTE (All India Council for Technical Education) warned their recognised universities and institutions against franchise engagements with EdTechs. They are not to offer distance-learning courses or courses in online mode in association with companies or start-ups in the education sector. UGC, in an official order, stated that it had come to their notice via advertisements in newspapers, social media and TV that EdTechs were offering degree and diploma programmes on ODL and online modes in association with a few UGC-recognised universities and institutions. It also stated that as per regulations, the mandate is that the higher educational institutions shall not offer ODL or online programmes under franchise arrangement and that the institutions "themselves are completely responsible for the programmes".
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Not without our approval
This caught the eye of AICTE as well who joined UGC to say the same. "We check the institute's infrastructure, classes, library, teachers and their qualification, curriculum and several other factors and only then approve courses. Without our approval, no technical course can run in the country. However, we have noticed that some companies are offering MBA and MCA programmes, franchises are being taken up with universities without our approval," pointed out Prof MP Poonia, Vice-Chairman, AICTE. The regulatory body will either blacklist or take legal action, as it deems fit.
"The point is, if universities carry on with the franchise model, the regular teachers who have been appointed in the universities for specific purposes, what will they do? What will happen to the norms and standards that were decided upon if middlemen start coming in between?" the Vice-Chairman goes on to ask. He states that AICTE themselves have been working with EdTechs for three years and have partnered with over 45 platforms for National Educational Alliance for Technology (NEAT). The announcement of 100 employability certificate courses for employability enhancement has been floated, from coding to communication and everything else in between. "Suppose 100 students register, 20 per cent free coupons are provided to the underprivileged as well. All this is with the intention of filling the industry-academic gap. In terms of industry gap and employability, they are authorised to help, but now they have gone beyond their authorisation and it is important to curtail them," he says.
Onwards and upwards
Curtail. Now that's a word that might not go down well with EdTechs. Perhaps that's why, just a week ago, EdTechs in India formed India EdTech Consortium (IEC) to adhere to a common code of conduct. But will orders as the ones announced by UGC and AICTE really be detrimental to EdTechs? Amit Ratanpal, Founder and MD, BLinC Invest believes that it certainly will have an impact on EdTech companies, specifically those in the space of higher education and they will have to surely relook at their existing business models. “For example, I believe there will be an emergence of OPM (Online Programme Management) models in the country as most of the existing businesses will move towards becoming the back-end service partners for the online learning programmes provided by the universities and other higher educational institutions,” he predicts.
Ratanpal also adds that over the exponential increase in the business of Indian EdTechs in the last five years, the large number of students they have positively impacted and the overall increase in popularity has certainly caught the attention of government bodies who, “will look to monitor and regulate this segment to facilitate fair market participation and ensure consumer protection".
As far as a law for EdTechs goes, Ratanpal, who is a director in education companies such as Eduvanz and Imarticus Learning, hopes that there will be no need for that. "I believe the government needs to find an appropriate governance control mechanism to protect the consumers without stifling the growth of EdTechs in the country. In terms of learner outcomes, these EdTechs have had a significant positive impact over the last few years. Moreover, after this pandemic, online education is here to stay. Though there might have been a few bad cases in the sector, bringing everything to a complete stop is not the best solution in my opinion," he shares.
What about the VCs, does the shadow of these regulations make them apprehensive of investing in EdTechs? Ratanpal says that they continue to be "bullish" about the Indian EdTech sector, which holds immense potential and growth opportunities for all stakeholders involved. "A few segments like early childhood education, online schooling, test preparation, pathway programmes and so on are just getting started. I believe that the propensity of the consumers to pay and their increasing understanding of the EdTech products will drive more growth in this sector," he says.
Work on the messaging
Though EdTech companies like Unacademy did not wish to comment and a few others like BYJU'S, Vedantu and Great Learning were unable to comment, Piyush Bhartiya, Co-founder and CEO of AdmitKard, an EdTech for higher education opportunities believes that, at times, it is the marketing and messaging of EdTech platforms that can perhaps be misleading. "But overall, EdTechs have been creating significant value for students by helping universities adopt technology at a faster stage and solving important problems by making education affordable. Its value cannot be denied," he says.
The choice is now between self-regulation and third party regulation for EdTechs, Bhartiya believes. He also believes that EdTechs understand that there can be problems and they hope to self-regulate fast enough. "For me, it is a positive and mature sign that both the sides, EdTechs and the government, are looking to create a framework wherein the customer doesn't feel cheated," Bhartiya says. He reiterates that nobody is denying the impact EdTechs have created, they only need to work on the messaging and it is natural as that as an industry becomes more and more significant, they have to go through a cycle of some regulation or the other.