The edtech sector is currently facing significant challenges, leading to a decline in coaching institutions across India. Once a highly sought-after hub for exam preparation, Kota is seeing a mass exodus of students returning home due to the instability affecting coaching classes. Among them, FIITJEE, renowned for IIT-JEE preparation, stands on the verge of shutdown as several teachers resign over unpaid salaries. This unexpected closure has caused immense stress for students and parents, who are now demanding refunds. Protest rallies are taking place outside FIITJEE centers, reflecting widespread dissatisfaction and uncertainty in the educational landscape.
The Crisis Affecting Major Coaching Institutions
Various offline and online coaching centers are grappling with similar crises, some even shutting down entirely. Notably, companies like Byju’s, Unacademy, and Vedantu are also facing difficulties. Below, we delve into the current status of these companies and their challenges.
Byju’s: A Cautionary Tale
Byju’s has encountered severe struggles over the past few years, culminating in a bankruptcy declaration. On January 25, 2024, creditors initiated bankruptcy proceedings against Byju’s to recover debts. Subsequently, on February 1, 2024, Byju’s U.S. division filed for Chapter 11 bankruptcy in Delaware. The parent company, Think & Learn, acquired Aakash Education Services Ltd for $950 million in 2021, marking one of the most significant acquisitions in the Indian startup ecosystem. However, the current financial crisis has overshadowed this achievement.
Impact of Bankruptcy on Byju’s Future
The fallout from the bankruptcy is expected to affect countless students enrolled in Byju’s programs, raising concerns about the continuity of their education and the quality of resources available. It highlights the urgent need for better financial management within the edtech sector.
Unacademy: From Ambition to Setbacks
Originally launched in 2015 as a YouTube channel by Gaurav Munjal with friends, Unacademy evolved into a prominent online learning platform. Yet, the company’s recent financial reports reveal a troubling trend. In FY24, Unacademy reported a loss of ₹285 crore, a stark increase from ₹1592 crore in FY23. To mitigate losses, the company has reduced its employee expenditures by 69.47%, bringing it down to ₹340 crore from ₹1114 crore. Additionally, in July, Unacademy laid off 250 employees, signaling a troubling turn in its growth trajectory.
Challenges Ahead for Unacademy
The drastic reduction in employee expenditure and workforce raises questions about Unacademy’s ability to maintain quality education and support for its students. As competition intensifies, how it navigates these challenges will be crucial for its sustainability.
FIITJEE: A Storied Institution at Risk
Founded in 1992 in Delhi, FIITJEE has established itself as a premier institution for preparing students for competitive exams such as JEE and NEET. However, on January 23, 2024, multiple centers across the nation abruptly closed their doors, reflecting a significant downturn in business. In 2023, FIITJEE reported revenue of ₹542 crore, a stark contrast to its previous performance. The closure of its centers has left many students in uncertainty about their academic futures.
The Future of FIITJEE and Its Students
Students and parents are understandably anxious as they navigate these uncharted waters, and the organization now faces an uphill battle to regain trust and stabilize its operations.
Conclusion
The challenges faced by Byju’s, Unacademy, and FIITJEE serve as a stark reminder of the volatile nature of the edtech industry. As these institutions navigate their crises, the future of education in India remains uncertain, highlighting the need for sustainable practices in the edtech landscape.