Inside Asia’s booming online learning industry

After graduating from university five years ago, Subhendu Chandra joined Byju’s, then a relatively new education platform in India. As a sales associate, he spent his days calling thousands of parents to persuade them to choose one of Byju’s online learning classes over the in-person tutoring centers that are common across the country. At the time, Chandra said, his sales pitch was “a bit tough.”

Since then, Byju’s has become a household name and India’s second-most valuable startup, now worth more than $11 billion, twice what it was valued in 2019. Over the past two years, the company has raised more than $1 billion from a star-studded group of investors eager to cash in on India’s under-resourced and mercilessly competitive educational environment. And that was before Covid-19 forced schools to cancel in-person classes: Now, a year into the pandemic, business for Byju’s is booming. Just a few years out of school, Chandra manages more than 800 employees and said in September that Byju’s was hiring around 200 people a day.

India’s exploding ed-tech market is second only to China’s, where homework-help company Yuanfudao, valued at more than $15 billion, has become the highest-funded ed-tech startup in the world. Overall, China’s massive ed-tech ecosystem could be worth $70 billion by next year, while India’s ed-tech market drew more than $2 billion in funding in 2020 alone. The question is whether these much-hyped startups will actually change anything about education.

Some experts are skeptical of whether learning on a phone, tablet, or laptop can match the experience of being in a classroom. But when the pandemic made distanced learning the sole option for most students, investors rushed to capitalize on the opportunity. In 2020, venture capital firms poured $10 billion into ed-tech companies — more than twice as much as in 2019. The money mostly went to established players, including Byju’s and Yuanfudao, which have further concentrated their market power. Byju’s, for example, began temporarily offering free courses — a strategy that netted it 25 million new users.

“In Indian education especially, we’re a little old-school; we don’t believe that engaging content is as good,” said Tanveer Kaur, a psychologist and user researcher at Byju’s, referring to skepticism about online learning. “But look around. Everything has changed in a matter of a year.”

The company’s core business is selling enrichment courses intended to complement primary and secondary schoolwork that students can access through an app or preloaded SD cards. Byju’s competes with dozens of other buzzy ed-tech platforms in India, including Vedantu, Unacademy, and even Amazon, which recently introduced its own engineering test-prep course. 

Byju’s promises students more than just higher test scores, claiming to teach them lasting skills like problem-solving and creative thinking. But it has also been criticized for using strong-arm sales techniques, subjecting employees to a grueling work culture and silencing critics on social media. (The company denied that it pushed LinkedIn to delete a critic’s account and declined to comment to multiple news outlets about its sales techniques and work culture.)

Experts who spoke to Rest of World said that the slickly produced lessons marketed by ed-tech platforms are more an innovation in test-prep delivery than in learning outcomes. “In Asian ed-tech, currently, there is an emphasis on tech more than learning sciences,” said Niko Lindholm, program director at EduSpaze, an education-startup accelerator in Singapore. “Ed-tech companies are just creating marketplaces for courses.”

Byju’s was built on the image of its eponymous cofounder, Byju Raveendran, who, despite cutting class to play soccer as a kid, became a test-prep celebrity in India. He started by helping friends pass the country’s competitive business-school exams, which he said he took for fun and easily aced himself. He later abandoned an engineering job in Singapore to coach graduate school applicants full time. Raveendran told the BBC News that more than 1,000 students came to one of his first teaching sessions, which later evolved into “math concerts” attended by stadiums full of as many as 25,000 students. Byju’s courses, he argues, are designed to help pupils learn effortlessly — just as Raveendran himself does.

Since the coronavirus pandemic began, Byju’s says, students have been spending an average of 100 minutes a day using its app, up from a previous average of 71 minutes. It’s not clear whether the highly produced videos, often featuring Hollywood characters, actually change how children learn, or just engage them with games and animations. Watching the company’s sample videos on YouTube induces a passive state — I feel like I’m watching my little brother play a video game. In one clip, characters from the Disney franchise “Cars” explain fractions. In another, an elementary student dressed in overalls rides an animated drone into a human ear canal, explaining that people couldn’t hear anything without the fuzzy hairs growing inside it. 

Raveendran said he wants students to be motivated by their own curiosity, not by fear of exam results. The problem with education today, he explained, is that students aren’t trained in how to think critically. “The focus has been on complete spoon-feeding, rather than encouraging children to learn on their own,” he said in an email. “India has the largest school-going population in the world, but we still rank low in major global assessments, because learning is driven by the fear of exams rather than the love of learning.”

But Byju’s core offerings are still designed to help students pass nationwide secondary school tests and score well on specialized exams for professions like engineering and medicine. The company says it offers an alternative approach to memorization and test-driven learning, but it has become one of India’s top ed-tech companies by putting test prep at the center. In January, Bloomberg reported that Byju’s signed a $1 billion deal to acquire Aakash Educational Services, which runs more than 200 in-person tutoring centers across India for engineering and medical school exams.

Byju’s latest product is what employees call “live” classes. Students watch a prerecorded lesson, while their teacher waits to answer questions in a live comments section. Diksha Bhagat, a chemistry teacher at Byju’s, said teaching assistants are often the ones who actually respond to students, while the main instructor focuses on recording lectures. Bhagat said it’s not uncommon for students to be under intense pressure. “Among 50 students, you can find 10 to 12 who will directly come to you for extra sessions, for extra questions,” she said. “Students feel parental pressure or like they are not good at understanding particular subjects.”

Like all education companies, Byju’s needs to navigate a challenging dynamic. Many parents, wary of online learning, prefer to send their children to in-person tutoring centers. Parents may be paying for ed-tech, but they’re not the ultimate users of these products, and the courses don’t come cheap: At the time of reporting, an introductory Byju’s package of four costs around $25, but an entire year of prerecorded high school–level classes goes for closer to $350, and for a little over $100 more, students can receive individual guidance from teachers. A tablet preloaded with several years of coursework can run to upward of $600. A recent e-commerce survey found that the average monthly income in India is $437.

Exam culture, of course, isn’t unique to India. China is home to the world’s highest concentration of ed-tech companies as well as the notorious gaokao, the grueling nationwide test that determines university placement and takes over the country each year. It’s meant to provide equal opportunity, but as with college admissions in many countries, privileged students often have an advantage, especially those born in first-tier cities with more resources. Homework-and-tutoring company Yuanfudao, which has raised more than $3 billion from investors since last March, promises to level the playing field by giving the same education to every student with a smartphone. 

Yuanfudao offers live tutoring sessions, in which chipper teachers ask questions and review material in an environment that feels like a mix between school and an internet chat room. Students submit answers and ask questions in their own chat boxes, while their teacher leads fast-paced math and reading drills. Yuanfudao employs an algorithm it claims can track users’ speed and accuracy, adjusting the difficulty of the next lesson accordingly.

Yuanfudao wasn’t built on the reputation of a celebrity founder but on a cutting-edge idea: that artificial intelligence could be used to revolutionize education. “They’re using gamified learning as a tool to help children get interested,” said a former Yuanfudao employee who asked to remain anonymous because they weren’t authorized to represent the company. “The AI is not only about automatic correction or helping the teachers get their assignments done,” they said; it also helps mimic the kind of individualized attention that students previously could only receive through one-on-one instruction.

Attending a Yuanfudao course feels less like entertainment and more like a real, anxiety-inducing classroom. In one recorded class available on the Chinese streaming site Bilibili, a teacher with cat ears sprouting from her headset watches as sixth grade algebra problems quickly flood the screen. It was easier to keep up with another session, meant for first graders, in which addition and subtraction are practiced by counting strawberries. The pace and format appear to be effective: Yuanfudao, which claims to have more than 400 million users, employs 30,000 people, including a team of artificial intelligence researchers that works in partnership with Microsoft and some of Beijing’s top universities. 

Investors in ed-tech companies are betting on the idea that gamified learning can produce better outcomes, or at least give children an edge over their peers. But experts say that, to improve learning, startups need to focus as much on teaching as technology. “In order for ed-tech to really push through in learning and education in general, [courses] have to be pedagogically designed,” said EduSpaze’s Lindholm. “Of course, you’re democratizing education; you’re cracking the huge challenge of access to education. … But the next step is going to be pedagogically designed ed-tech products that really organize the learning process.”

Bhagat, the teacher from Byju’s, said the hardest part of teaching through an app is not seeing the students in her classes up close. “We don’t know whether behind that screen the student is listening to us or not,” she said. “We don’t know if he’s put us on mute, and the video is just playing.”