Online Higher Education and Lifelong learning – A ~$5 Bn opportunity by FY 25!

1. © 2020 RedSeer Consulting confidential and proprietary informationBangalore. Delhi. Mumbai. Dubai. Singapore. New York
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Online Higher Education & Lifelong learning –
10x Growth Potential - A $5B Opportunity
Infection Point in NOW !!
August 2020
SUMMARY DOCUMENT

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Agenda
Online Higher Education and Lifelong learning –
A ~ $5 Bn opportunity by FY 25!1
Business Models in Higher Education – Multiple models have emerged, however,
Full stack models are best positioned to capture growth2

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Online Higher Education and Lifelong learning –
A ~$5 Bn opportunity by FY 25!
1

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Online Higher Education & Lifelong Opportunity
Online Education opportunity in Post K12 sits on the back of formal higher
education and Lifelong learning market
K12 Higher Education Lifelong learning
Target
Segment/
Cohort
Students enrolled in kindergarten, grades
1 – 12
Students opting for formal Higher
Education (college/ undergraduate,
postgraduate degrees, PhDs, etc.)
Primarily working professionals opting
for upskilling/ reskilling courses
(certifications, diplomas, etc.)
Total
Addressable
Market – FY
2020
275 Mn school going students ~40 Mn students
(Current GER = 26%; Target GER = 50%)
~50 Mn working professionals
Online Paid
users (FY 20)
~1.2 Mn ~0.5 Mn ~0.5 Mn
What next for
EdTech?
• High competition
• Personalisation, focus on outcomes
• Opening up of B2B opportunity
• Opening up of space for EdTech
players
• Exponential growth for EdTech (low
base; and lifting up of govt. moats,
NEP 2020 implementation)
• New market creation led by EdTech
• Focus on outcomes
• High growth on back of increasing
awareness and willingness to pay
Student Journey →
Notes:
1. GER = Gross Enrolment Ratio
2. Government jobs test preparation and graduate admissions test preparation is excluded from above
3. Higher Education users includes enrolments on govt. backed Swayam education portal
4. Above user estimates are indicative for 2020– considers unique users across platforms
Source: RedSeer IP, RedSeer Analysis

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Expected Growth in Student Enrolment in Higher Education
no. of students, Mn, FY 20 – FY 35E
Gross Enrolment Ratio (GER)1 – by Country
GER %, FY 2020
Higher education enrolments is expected to grow at 6% CAGR as implied by
government targets
40 Mn
53 Mn
70 Mn
92 Mn
FY 20 FY 25 FY 30 FY 35
+6 %
26% 32% 40% 50%GER
26%
50%
82%
86%
RussiaIndia China USA
GER (Gross Enrolment Ratio) in Indian higher education stands
at ~26% in 2020, lagging substantially behind other nations
Online education will play a critical role in enabling the 50%
GER objectives
National Education Policy [NEP]
2020 sets the GER target at
~50% by 2035
Supply will need to be enhanced
to achieve GER targets
Notes:
1.Gross Enrolment Ratio here refers to the ratio of total enrolment in higher education to eligible official primary school-age population of a country.
Source: Ministry of Education (HRD), RedSeer Analysis

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Regulatory developments in the higher education sector - India
Descriptive, 2020
Recent regulatory developments marks a major shift in higher education and will
enable accelerated growth in Indian online higher education
Source: Ministry of Education (HRD), RedSeer Analysis
The top 100 universities are permitted
to offer online degree courses1 EdTech platforms can now partner with universities to offer
online degrees (as opposite to only diplomas earlier).
Top Indian institutes are encouraged to
build/advance their global presence
and vice versa
3
Greater opportunities for foreign institutions Better exposure
to foreign universities enabled via integration with online
platforms
Post COVID, All Indian institutions will
be allowed to offer up to 40% of their
coursework online, up from 20% earlier
4
Unbundling of courses and Democratization of access to
boost demand for online education and increase the
completion rate.
Mid-term dropouts in bachelor's
programs to be given credits by forming
an Academic bank of credit
2
Total Addressable Market to increase for online education.
Implications of recent regulatory developments in online higher
education
Online education to get mainstream as regulators
acknowledge its importance

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Additionally, The Lifelong learning market has got a further push after Covid as
the economic uncertainty further establishes the need for continuous learning
Several Macro Trends (Skills getting redundant plus high unemployment and skills gap) coupled with Covid has put a new urgency to
the need for continuous learning in order to stay relevant
Skills Gap/ Skills Redundancy
• Skills getting redundant at a fast pace
• High unemployability in the segment
Increasing Unemployment
• Job creation lags behind new additions to
workforce every year
Lack of Industry Focus Education
• Mismatch between industry requirements vs
education curriculum in colleges
High use case for lifelong learning exists..
1
2
3
“<1.5% engineering students from IT branches could write correctly
compiling code. Employability for mechanical & civil engineers were
~6%, while it was as low as 1.7% for chemical engineering
Aspiring Minds study
“NASSCOM says 6 million people are required in cybersecurity by 2022,
but we have a skills shortage. Top 10 IT companies take only 6% of the
engineering graduates. What happens to the remaining 94%?”
~CP Gurnani, Tech Mahindra
..and Covid has provided a further push amidst macro-
economic uncertainties.
~10.8 Mn Job Losses during Covid
(Moneycontrol, 15 August)
Unemployment rate touches a new high
(LiveMint, 18 August)

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Need realization among
students and
professionals
Transition to Credit
System
$ 0.1 Bn
(25 %)
$ 0.4 Bn
(75 %)
FY 20 FY 25F
$ 1.2 Bn
(25 %)
$ 3.6 Bn
(75 %)
Lifelong
Learning
Higher
Education
$ 0.5 Bn
~$ 4 - $ 6 Bn
FY 21F
$ 1.6 Bn
$ 0.3 Bn
(18 %)
$ 1.3 Bn
(82 %)
+197 %
+32 %
To summarise, Online Higher Education & Lifelong learning market is poised to
grow ~10x over next 5 years to reach ~$ 5 Bn by FY 2025…
Source: RedSeer Analysis
Relaxation in regulations
governing degrees
Supply side capacity gaps
..along with other accompanying macro
economic factors.
The overall online higher education market will benefit from the new reforms set forth,
including the increase in public spending (targeted at 6% of the nation’s GDP)…
Overall Online Higher Education & Lifelong Learning Market Size
USD Mn, FY 20 – 25F
Note:
1. Includes sales by EdTech firms in India and B2C (direct to consumer) sales only; excludes revenue from international
geographies by EdTech firms and any institutional/ B2B sales.
2. USD 1 = INR 70

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Business Models in Higher Education – Multiple
models have emerged, however, Full stack
models are best positioned to capture growth
2

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Classification of Business Models in Online Higher Education1
Online Higher Education businesses can broadly be classified per the below
Note(s):
1.Selected companies have been included to substantiate the business models basis RedSeer analysis
2.For international players i.e. Coursera, Udemy, LinkedIn Learning, and EdX, only Indian revenues are considered while plotting their relative size on the chart
3.Total Addressable Opportunity is determined by the type of offerings i.e. higher education and Lifelong learning courses, types of subject focus and, corresponding student base for the same in
the markets where the EdTech player is present in
4.Involvement across the customer journey includes the extent of platform’s control over content development, delivery, customer experience, assistance, and ability to influence outcomes
Source(s): Expert Interactions, RedSeer Analysis
Key: International revenue:
Less than 40%
B2B B2C
 Revenue Source →
International revenue:
More than 40%
Marketplace/ Aggregators Inventory/ Full Stack
Low TAM
Mass Full Stack
Niche Full StackNiche Aggregators
Mass Aggregators
High TAM
Mainstream/
Mass
Niche
TAM3
Control Over Consumer Experience4
Low Control High Control
Coursera2
Udemy2
LinkedIn Learning2
Swayam
EdX2
Emeritus/ Eruditus
EduPristine
Scaler (InterviewBit)
Pesto
AttainU
upGrad
Great Learning
SimpliLearn
Talent Edge
Imarticus
EduReka
Udacity

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Winning Play for Online Higher Education & Lifelong Learning
In the longer term, balancing customer experience with scale and unit
economics will be key to succeed in the market
Customer Experience and
Stickiness
Scalability of Operations Efficient Economics
✓ Full stack models (end to
end delivery
✓ Brand building through
delivering outcomes
✓ Both Lifelong learning and
Higher Education
✓ Tie ups with universities
✓ Expansion to International
Markets
✓ Lower CAC, marketing spend
✓ Lower commissions payouts
Key Levers:
1 2 3
Source(s): Expert Interactions, RedSeer Analysis

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✓ Awareness and recall
✓ Ability to attract students
and partners
Top Moats for Players on Online Higher Education
Businesses that are able to establish moats are likely to succeed in the long
term
Full stack models that cater to masses are likely to benefit in the long term
✓ Customer satisfaction
with outcomes
✓ Customer stickiness with
platform
✓ Tie ups with universities
✓ Tie ups with corporates
and employers
✓ Teacher onboarding and
satisfaction
✓ Tech infrastructure
capabilities
Brand Identity leading to
Referrals
Customer Satisfaction
Leading to High NPS
Partnerships to Enable
Scale
Delivery Robustness
Engage in brand building
activities
Personalisation in delivery
and focus on outcomes
Establish partnerships with
universities
Create teacher centric
products
Key focus areas for EdTech
Source(s): Customer Surveys (N =700), RedSeer Analysis

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