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Netflix is considered the world's best streaming platform for entertainment purposes. Netflix has achieved this through the Subscription model. The subscription-based model is nothing but offering a wide range of video content online by charging a nominal fixed fee to all. This model was also seen in other online streaming platforms like Amazon Prime, Hotstar, Zee5, etc.
After Netflix, many edtech startups in India are following the same business model and achieving tremendous success. Physics Wallah (PW) created history by having an attendance of more than 127,000 Indian youth flooding the internet almost two years ago—not for any event, but for a prep session. This was the platform’s most attended live lecture to date, despite its regular classes consistently drawing 50,000 students.
PW is an educational technology platform coaching medical and demanding engineering school entrance examinations. If any student faces any difficulties then there are standby instructors accessible via chat rooms or video calls which are supported by AI. The PW app boasts 2 million regular daily users, with an average user time of 80 minutes. PW charges an average of $50 per year, which is almost one-sixth lower than a one-device Netflix subscription in India.
In 2022, Byju’s held the position of the world’s most valuable educational technology business and began to crumble when the school started reopening following the pandemic. This also resulted in a downfall in its K-12 business. Unpaid creditors of a $1.2 billion loan are now pursuing legal action to push the company into bankruptcy.
Byju’s has proposed to its existing shareholders a rights issue valuing the company at $25 million (pre-money). Investors were frustrated as Byju’s was earlier worth $22 billion two years ago. 30 percent of stakeholder and investors believe that the start-up’s only chance of survival depends on removing its founder and may put this proposal for a vote at the next meeting.
PW became a unicorn when it was a two-year-old platform with its initial institutional fundraising round of $100 million from WestBridge and GSV Ventures valuing the company at $1.1 billion in 2022. Following the fundraising, they established a campus in Kota, Rajasthan, renowned for its test preparation hub.
PW is capitalizing on the change of behavior of consumers as online education continues to be a viable option in India, especially in the test preparation market. PW provides courses for 35 different categories of Indian exams and is launching a new offline coaching center every fifth day. In one year, their annual sales reached 20 billion rupees ($240 million) which is more than double last year.
Byju’s sudden downfall has tempered the excitement. Also, the future of edtech in India remains in the hands of the government as the government has announced new guidelines for the industry. Nonetheless, online education continues to be a viable option in India as more educational technology institutions like PW, upGrad, Unacademy, etc. are increasing their presence in India. Also, the subscription model (charging $50 per year) helps the edtech to get a lump sum of cash at a time which can be used for research and development and the consumer paying $50 has access to the lecture for the whole year which can be viewed anytime.
Thank you.
Regards,
Vansh Jain,
Kautilya, IBS Mumbai.
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