EdTech Unicorns Brace for Slower Growth in FY24 Due to Changing Market Conditions

EdTech Unicorns

The EdTech industry has been on a rollercoaster ride over the past two years, with the pandemic accelerating the adoption of online learning. EdTech unicorns in India had a stellar year in FY22 with massive user growth, aggressive advertising, and huge ESOP coats to attract and retain top talent. However, the industry is bracing for a slowdown in FY24, as per a recent report. This article will delve into the reasons behind this trend and provide insights through relevant research.

EdTech Industry in FY22

The EdTech industry in India had a fantastic Year in FY22 with massive user growth, aggressive advertising spends and huge ESOP costs. The top EdTech unicorns like Unacademy, Vedantu, PhysicsWallah and upGrad have seen a massive surge in revenue due to the pandemic-induced lockdowns, and they invested heavily in advertising to capture the attention of the online learning market. Additionally, they offered massive ESOPs to remain top talent in a competitive industry.

While FY22 was a remarkable year for Edtech unicorns in India, the industry is bracing for a slowdown in FY24. The reasons for this trend are as follows:

  1. User growth has slowed Down: With schools and colleges reopening across the country, the adoption of online learning is expected to slow down. This will impact the user growth of EdTech companies in FY24.
  2. Aggressive advertising spends will Reduce: The expected user growth would be slowed down which will lead the EdTech companies to likely reduce their spends in advertising. This will impact their ability to attract new uses and retain existing ones.
  3. ESOP Costs will remain High: To retain top talent, EdTech companies will continue to offer ESOPs, which will impact their bottom lines in FY24.
MetricsUnicorns in India
Revenue GrowthSkyrocketed
Advertising SpendsAggressive
ESOP CostsHuge
User GrowthSurged due to pandemic
Expected Trend in FY24Slower Growth
Reasons for Slower GrowthSlowdown in user growth, reduced advertising spends, high ESOP Costs

However, the industry is expected to experience slower growth in FY24 due to several factors. As schools and colleges reopen, the adoption of online learning is expected to slow down which will impact the growth EdTech companies are also likely to reduce their advertising spends, which will affect their ability to attract and retain users. However, ESOP costs are expected to remain High as companies continue to compete for top talent.

To summarize, while the EdTech industry is expected to continue growing, the pace of growth is likely to slow down in the coming years due to changing market conditions.