6 Reasons Why Edtech Companies in India Struggle

The surge in interest from venture capitalists (VCs) and the growing popularity of education apps have inspired many entrepreneurs to jump into the edtech space. They dream of building the next big platform like BYJU’s, Duolingo, or Udemy, aiming for a larger share of the global education market.

But there's something they're missing.

Companies like KNO, SharpScholar, Knack for Teachers, and Tutorspree once promising are now on the long list of failed edtech startups. Every year, many startups in this sector either fail to survive or don’t even make it to market. There are many reasons for this.

If you're an entrepreneur thinking about joining the edtech industry but feeling unsure after learning this, don't worry. We’re here to explain why edtech companies in India often fail and share tips to help you avoid the same pitfalls.

Common Reasons Why Edtech Companies in India Struggle

Edtech companies in India struggle for numerous reasons. But for the sake of brevity, we’ll be covering six. They are:

1. Poor Market Research

While there are plenty of exciting ideas in the education sector, not all of them are needed right now. Some are too ahead of their time to be practical.
Startups that jump into edtech without proper preparation, like market research and competitor analysis, often can’t tell the difference between what’s truly needed and what’s just flashy. As a result, they choose the wrong path, and many never even get off the ground.

2. Lack of Patience

The edtech industry grows much slower than other sectors. Most companies don’t see significant progress until 5-10 years after they start, which can be discouraging.

This frustrates both entrepreneurs and investors who expect quick results. Investors, especially venture capitalists, often lose patience and pull out before e-learning startups have the chance to show real growth.

3. Unclear distinction between consumers and customers

It is often seen that a lot of users download the applications to test out the features and understand the proof of concept (due credit to mobile app promotion teams for this). However, only a small tiny fraction of these ‘trial’ users purchase or sign up for the services offered by the said application.

Because of this, even after having 10,000 or more users onboard, fast-growing edtech companies in India fail to get enough revenue, which becomes unsustainable in the dynamic edtech market.

4. Introduction of Unnecessary Technologies

With the rise of tech in the edtech space, many entrepreneurs are quick to add AI, AR, IoT, ML, and Blockchain into their apps. But too often, they don’t stop to think about whether these technologies benefit their users or solve any real problems.

Instead of focusing on what will engage their target audience or boost sales, they add fancy features that don’t align with the app’s core purpose. This drives up development costs and confuses users, becoming yet another reason why startups fail.

5. Lack of Transparency and Teacher Collaboration

One key reason many edtech startups fail is the lack of transparency and cooperation with teachers. These startups often aim to replace, rather than support, traditional educators.

Because they don’t involve teachers or take their feedback, they struggle to be open about their approach. This makes schools and teachers hesitant to adopt their apps or software, leading to poor adoption and eventual failure.

6. Insufficient User Training

With mobile apps driving the future of education, competition in edtech is fiercer than ever. Many entrepreneurs rush to launch new products or features without considering whether users can benefit from them.
They skip offering user manuals or training resources that would help people navigate the app. As a result, users get frustrated, leading to poor retention and eventual failure in the market.

4 Ways to Overcome Bottlenecks

To ensure your edtech startup not only launches successfully but also ranks among the top edtech companies, you’ll need to follow some key strategies. These will help your startup grow while addressing common reasons for failure.

1. Perform Market and Competitor Analysis

Many edtech startups fail because they don’t fully understand market needs or what competitors are offering. To reduce the risk of failure, the first step is to dive into the app discovery process and learn what your target audience really wants.

This means identifying the challenges your users face, what current edtech apps provide, and where those apps fall short. By doing this, you can find the right opportunities to succeed in the educational space.

2. Focus on KPIs

As mentioned earlier, many apps may succeed in getting high download numbers but struggle to convert those into paying subscribers. Relying solely on downloads to measure your e-learning app’s success isn’t the best approach.

Instead, focus on tracking key performance indicators (KPIs) to maximize revenue and improve the overall success of your edtech startup.

3. Collaborate with Teachers and Educational Organizations

Teachers and educational organizations have been part of the learning system long before you considered launching your own edtech startup. They’ve seen the market evolve, understood its challenges, and identified opportunities that have shaped innovation.

By viewing them as partners and seeking their input, you can make your educational app more useful, secure, and successful. Their insights can help you build a stronger, more impactful product.

4. Add Value to the Existing Learning System

Viewing your edtech solution as a complement to the current education system, rather than a replacement, is key to avoiding startup failure. Be clear about this from the start.

Focus on identifying the challenges within the existing learning system and work on solutions that address them. This approach will help traditional educators and institutions embrace your innovation, encouraging word-of-mouth referrals and allowing you to reach a broader audience with less effort on marketing.

In conclusion

While the edtech industry in India presents tremendous opportunities, it also comes with its own set of challenges. Many edtech companies in India struggle due to a lack of proper market research, patience, and understanding of user needs. Entrepreneurs can avoid common pitfalls and ensure long-term success by focusing on the right strategies such as thorough market analysis, collaborating with educators, and adding genuine value to the existing education system. With careful planning and a user-centered approach, your edtech startup can not only survive but thrive in this competitive landscape.