Edtech firms saw an unprecedented surge when the COVID-19 pandemic struck the world and forced students to switch to online classes. But with the respite from this virus, the world is gradually returning to normalcy, and the doors of educational institutes are reopening. Peer-to-peer learning and face-to-face connections between students and teachers are re-establishing. Offline classes are back, and students are moving out of  the online classes. These have been a concern among many Edtech companies as they have invested heavily to enhance their platform as per the demand. Some of the big players in the industry are laying off employees, cutting costs, stopping expansion, and finding a new revenue stream. All these actions indicate a sloppy path for Edtech companies, and many experts believe that the Edtech bubble has already started bursting as they are not able to switch to the bottom of the race from a peak growth.

The Edtech firms need to re-evaluate their strategy and offerings to sustain. Will metaverse, hybrid learning, etc stand as a growth driving factor for them? Will they be able to enhance technologies such as learning management system (LMS), collaboration tools, and adaptive learning (artificial intelligence, deep learning, data analytics), etc. to accommodate the changing patterns? Will they reset or will they further shrink? Let us analyze the same in the further sections.

Reasons Why Are Edtech Firms Struggling to Keep Up the Business?

  • Unrealistic pricing:  Edtech firms have been investing money profusely into hiring best talents and optimizing the services. This resulted in high customer acquisition costs, and to negate these costs, Edtech firms have increased their tutorial pricing. Many Edtech firms increased their tutorial pricing excessively. On top of that, their pricing models were not flexible and forced parents to sign up for a long-term subscription. It even pushed some parents to take loans to pay the fees and buy devices to access the online tutorial.   
  • Lack of transparency:  Transparency is another concern with online education. Parents busy with daily chores cannot track a child’s progress all the time, and it becomes difficult for them to find whether the child is attentive in the virtual class. It does not give parents the clarity on the child’s performance and decide whether it is actually worth it. Besides, focusing continuously on a screen and working in isolation cannot be suitable for all students. It can hamper their learning ability as there is no active involvement. 
  • Lack of personalized learning:  Although online classes are a great medium to study, students still miss the offline educational aspects. Students miss the openness and collaboration with the teachers, which is important for students to overcome learning obstacles.   For teachers, this is a completely new challenge as they are trained to teach with blackboards and physical classrooms. They are not trained for collaboration tools or remote working systems. Teachers’ lack of skill and absence of personalized learning are also major obstacles in holding the students’ interest in virtual learning.
  • Fail to develop the right solution:  The surge in online education due to the pandemic inspired many Edtech firms to take education online permanently. However, their applications were not user-friendly, and had several glitches. It was not solving students’ challenges and prohibited them from accessing the knowledge resources or education. Even teachers face difficulties in teaching students with poorly developed apps. Therefore many educational firms fail as they have built applications that are not solving student problems. Besides that, many Edtech firms were left with no time to conduct research on the outcome of their product in terms of elevating the quality of education . 
  • Fail to understand the market:  While online education was picking up fast amidst the pandemic, most entrepreneurs focused on expanding the business, increasing valuation to attract more investors, and hiring more staff. They were least concerned about sustainability, and had no plans for the future. So when the crisis struck, the problem surfaced more abruptly. Without having plan B in place, many Edtech firms found themselves in bizarre positions and struggled in thriving the business.

Will Hybrid Model and Metaverse Stand as a Savor For the Struggling Edtech Companies?

Some of the popular companies in the Edtech industries are turning towards a hybrid educational model and acquiring some prominent offline centers. One of the leading Edtech firms paid $1 billion in cash and stocks to acquire offline classes. There are few other Edtech firms that have initiated acquiring offline tutorial centers. It indicates that Edtech firms cannot rely on online business alone to capture the market, but the future of Edtech firms lies in a hybrid model. Implementing a hybrid model can help Edtech firms to take advantage of both the platforms and recover from slowing down online business. Another reason for considering the hybrid model is to attract students from tier-II, tier-III and rural areas. Students from these areas often rely on offline coaching institutes rather than online classes as they face technical glitches and face network issues.    Metaverse, virtual reality is also trying to fit into edtech platforms. This can act as a great savor.  But, as the concept is new, we need to wait and watch how EdTech can utilize these to climb up again.


The online education system has revolutionized the traditional learning methods, but the  bubble is going to burst as the traditional system is returning. The online education system brings a host of benefits, but it cannot replace the conventional system completely. Instead, it can act as a supporting system to optimize the learning methods. Students’ preference for offline educational centers and factors such as high pricing, minimum transparency, teachers’ lack of skills, and lack of personalized approach have worked against the online educational system. It does not mean that online education is losing ground on teaching, but these are the areas of concern that online institutes should focus on enhancing learning and making it more meaningful. There are many possibilities with online education, and by adopting the right strategies such as implementing a hybrid model, investing in advanced technologies, and focusing on end-users preferences, Edtech firms can avoid the bubble burst. 

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By Veena

She has 7 years of experience writing about technology, education and business. Her experience in the tech industry (Fieldengineer, wowtechub, Tech360d, Techinfobeez) has taught her how to write engaging, informative content that makes complex issues accessible to a wide audience. Follow her on LinkedIn

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