EdTech: Why Is It a Profitable Business Model?

EdTech is not new however, that’s what the majority of articles posted on the internet would want readers to believe. To help you understand an understanding the technology that is used to aid in the teaching process is known as EdTech.

The EdTech apps business models that include educational applications for children as well as organizational learning – have built to become an extremely profitable (for creators) and appealing (for investors) models for businesses throughout the years. It’s among the few sectors that can with stand the COVID-19 epidemic and continue to show promise for growth. What is it that makes us believe that?

  • As per Grand View Research The global education technology market size was estimated at US$ 89.49 billion in 2020 . It is projected to grow by an annual compound rate of growth (CAGR) that is 19.9 percent from 2021 until 2028.
  • The digital investment in the education sector will be 341 billion dollars by the year 2025 according per HolonIQ as a contributing factor in the rise of startups in education and kid educational app ideas for startups.
  • But, of the overall costs that the industry will generate, it would be an insignificant 4.4 percent, over the estimated time.

Do you recognize the potential in Edtech or, because of it, to introduce technology in the classroom? This is an area in which the cost to lose out on an idea could be millions. But readers must be aware of the dangers of Fear of Not Being Out i.e. FOMO syndrome.

If you’re full of Edtech startup ideas , or ideas for a startup in education, excellent however, it must be approached in a systematic way. Anyone looking for an educational app development company or, in the case of freelance developers of educational apps must first define their model of business for education-related startup companies.

Before settling on rules and regulations, the entrepreneurs should look for answers to these questions that could be the reason investors who want to invest in their own EdTech concept are looking for:

  • Do this E-learning app development company have the skill pool to offer AI, robotics, and ML support?
  • Do the developers of education apps have the know-how to incorporate chatbot AI and AR/VR capabilities in the app?
  • The final and perhaps most crucial aspect What do the collection of education app development services has to say?

Online business opportunities look attractive on whiteboards but can become a mess when you are in the execution stage. Take a look at the sub-verticals below that E-learning startups are basing their portfolio of educational apps on. You could also consider them as ideas for education apps which will surely succeed in the years to be.

Take a look at the following sub-verticals EdTech startups are modeling their portfolios around:

What does this mean?

It is evident from the reports that EdTech companies despite an unexpected catastrophe have not only been able to survive, but have prospered. The future is not yet mature, however, if we look at the present, we can indicate a few places in which the development of mobile apps for education will likely to boost resources.

The devices are becoming smarter as well as more effective. IoT is creating a vast web of interconnectivity , ensuring big data generation , and also allows Artificial Intelligence to identify improvement strategies for autonomous customer experience (CX). In addition, the CX will be improved by Mixed Realities adding a new dimension to EdTech and propelling its growth.

The Coronavirus pandemic has revealed indications of speeding up Blockchain’s adoption because of the fact that distributed ledger technology can be utilized for decentralized as well as secure management of data.

Gen Alpha (those born after the year 2010) may be the first generation to taste the initial versions of the technology that will take Edtech to the next level.


A. Global Internet Penetration

As of the date of this article, 4.88 billion people across the world can access the internet, which is six-two percent of globe’s population. Cybersecurity Ventures places the total internet users at 6 billion by 2022 at when the global population will be 8 billion. In 2030, the total number of internet users will be 7.5 billion, which could represent 90% of the 8.5 billion global population.

Digital access to education will guarantee a borderless experience, zeroing onto B2C Education distribution channels.

Learning materials are now easily accessible online, Edtech solutions could well become the ultimate solution for education and learning for all.

Digital classrooms and textbooks can cut down on the cost of publications. The curriculum could be customized to each student’s needs, with self-paced classes becoming standard.

It’s a great fit for children who have disabilities, who require educational programs that are individualized will not be a hassle for them anymore. Equally, it provides rewarding online business opportunities for those with a sense of.

B. Data-Driven Decisions

Digital textbooks can be an ideal starting point in the effort to organize the E-learning. The ability to track online learning patterns could provide a unique opportunity to maximize the resources needed for an enjoyable, multi-sensory experience.

Customized experiences will increase. Because of AI, ML and Big Data rapidly evolving the delivery of content will be free of hiccups and more personalized than ever before.

Universities are waking up to the fact that data management must be retrofitted. When spreadsheets were sufficient visualization tools are required to step into.

If the predictive analysis is allowed to its own devices faculties can focus on what they excel at, i.e. to instruct.

C. Virtual Reality

Augmented and virtual Realities are reducing the distance between learning as well as experiencing anything. In short Immersive learning is the method of imparting learning and education through simulations and AI.

The millennial generation will remember visiting a science-related park for an experiments. Put on the VR headset and you’re transporting yourself to the place.

Danish-based startup Labster is one of the points in case it creates virtual laboratory simulators that are suitable for students of STEM (Science Technologies, Engineering, Math). In 2021, the company raised US 60 million through Series C financing.

Interplay Learning is an online training platform designed for skilled tradesmen improving frontline workers’ competence. It makes use of VR or 3D models for training and raise US $18 million in its the Series B round, which will be announced in the early 2021st.

D. Augmented Reality

Augmented Reality has a greater probability of being adopted in the Edtech market prior to VR because of its capability on smartphones.

An excellent example could be an app called BBC Civilizations AR app.

Don’t forget, Pokemon Go was an AR-based game and its creators, Niantic Labs, raised U.S. $245 million at the time of a US valuation of $4 billion in the year 2000. The company continues to work with non-profit organizations in the field to help educate with AR.

E. Conversational AI

The majority of people are now using the Voice-Enabled device as a regular element of their daily chores.

It is a model for the use of AI in conversation helping humans, and its use in the education industry will soon be in progress.

Cognii is a perfect example of its conversational AI, which has products for students in the K-12 age range and corporate professionals that provide open-format responses to enhance the quality of their thinking.


F. Adaptive Learning

Learning through adaptive learning is a delivery method in which algorithms adapt the learning according to the individual student.

However, earlier attempts to attract students from students to higher education using personalized learning, developed by one startup Knewton was not able to meet expectations which led to the company’s US $180 million funding down to the floor.

Yet, steps towards progress are still being taken. The Quizlet AI is an software which aids students with their academics. It makes use of machine learning algorithms to recognize the urgent needs of each child , and adjusts the experience accordingly. Quizlet recently concluded the Series C round with a value in the region of US 1 billion in the COVID-19 pandemic, showing high confidence among investors.

G. Robotics

Robotics is also seeing a surge in the field of education management.

Roybi is a firm that has its nameake product called the Roybi Robot aiding infants 3-7 years old to master STEM capabilities.

Roybi utilizes computer-aided learning (ML) to align the cognitive abilities of the child through patterns that are recognized. It recognizes that learning isn’t one size fits all clothing and must be individualized. It was included by TIME publication as among the top inventions of the year.

H. Blockchain

Blockchain’s decentralized foundations could prove crucial in improving the outdated education infrastructure. Additionally it will encourage students to give their best effort and be recognized for, instance, obtaining the highest grade in a particular field. In addition it manages the data and ensure it is secured in a way that is immutable, allowing students’ records to be preserved.

Blockerts is an open system that was created by the fusion with Hyland, the MIT Media Lab and the Learning Machine (now Hyland). It is a platform that can be utilized for many different purposes from issuance of certificates/degrees to recording and verification. Potential employers can be referred to the platform to verify background information.

ODEM is a blockchain-powered platform that connects working professionals and students with high-quality instructors. Smart contracts are utilized to keep track of the details of a particular course. As time passes the ODEM ledger identifies patterns in the past of courses that the students took as well as the classes that the instructors instructed them in. ODEM tokens are able to be used to make transactions through the platform. ODEM gives skill badges to the profile of the user, indicating their expertise and experience.

Nova Learning Management System created by Brisk Logic allows teachers upload easily their course materials. In addition it allows students to sign up and complete the course without difficulty. Brisk Logic created the solution that led to an optimistic approach to the area of education technology.

I. Gaming-based learning

Gamification, similar to immersion learning, can be a great way to make use of technology in Education because it engages students in the learning process. This method isn’t new, and has been utilized for over 20 years. Because it’s so useful, modern online learning systems make great usage of the technique.

You might be wondering what makes it so popular? Simply put you are aware that learning is never easy while playing is easy and fun. So, the majority people think that gamification is a many different strategies which can improve the user experience.

Gamification includes two key elements.

  • In the beginning children have a comfortable and stimulating environment, which means there’s no need to put in the effort and time trying to keep them interested.
  • The platform’s flexibility lets you learn in a way that is fun. It is unlimited in your imagination.
  • For instance, the project “Minecraft Educational Version” is the most definitive example of this. Children around the world play the game on computers that is used successfully to teach children. Its appeal lies in the fact that it is able to be utilized to every subject such as geography, architecture English biology, culture Chemistry, and physics.

We’ve now examined what makes this EdTech sector a lucrative business model for online education and what to expect from the future of this sector and the next course of action for entrepreneurs is to plan for a guaranteed success in the industry.

EdTech Business Models

Universities, schools, coaching institutes as well as other traditional institutions had to face huge difficulties during the this pandemic. This led to an expansion of the extent of education. In order to ensure learning and business continuity, the class required them to upload their entire works to the internet, which made accessibility to education easy. Here are some of the edtech business models that are before but have exploded due to the outbreak of pandemics.


Freemium Model

It’s a great idea for entrepreneurs since it helps you quickly build trust in your brand and establish yourself as a market leader.

As an example, Coursera began with free classes covering a variety of subjects with the option of buying certificates. The company quickly gained recognition as an edtech juggernaut due to the $210 million investment.

This method lets you create a significant amount of momentum quickly, and also offer your product directly to the consumer without intermediaries. The disadvantage of principal agents issue in education is that your customers don’t represent your customers.

Edtech Marketplace

If you don’t have your own content, you can set up an Amazon-style marketplace in which educators can sign to sell their work. This allows teachers to advertise their course to a broad audience. In addition, the platform gets a share of the profits.

Udemy is an incredibly well-known Edtech business that has changed to the model of a marketplace. Udemy offers an online market place that permits people and businesses to sell their online courses. It’s now worth more than $3 billion. Udemy is responsible for 50 percent of the cost of a course and offers a variety of tools to monetize marketing, distributing, and creating these courses as well as their educational materials.

Institutional Model

The top-down model, also known as the institutional model is the more traditional approach to selling to schools via district managers. The amount of market to be sold is determined by the expected penetration rate and the market size is initially determined.

After the market size is established and a plan for achieving the revenue potential is developed. It is achieved with a district, or area chief making one purchase across all of the schools that are under its supervision. The top-down model is advantageous because it allows districts to sign large contracts.

Consumer Model

The approach of the consumer is an innovative online education business model that permits schools to test the product without cost before charging families to use the item at home. This approach is most for businesses that offer products that children can use on their own. In this scenario schools serve as the main source for the adoption of consumer products.

In this way it’s crucial to establish the “product loop” between home and school that allows teachers to make use of the product with students in class and instruct parents to let their children use it at home.

The advantage of this approach is that schools will prefer items that are free (high-quality) products, which could increase the number of users who use it and also make parents more likely to follow their teachers in their recommendations for the use at home of technology. The increase in adoption is especially evident in the edtech tools for kindergarteners and toddlers.

Models Sponsored by Sponsors

A novel and fascinating strategy is one that no school or parents are responsible for the cost. Instead, a business is hired as a sponsor and assists with the cost of product placement that is typically done in conjunction with a corporate social responsibility (CSR) initiative.

The benefits are that when you provide an excellent product to schools at no cost The utilization of the product will be high, and that’s everything to the sponsors. Sponsors have the chance to create brand awareness and build goodwill for their business.

Sponsored products, like GoNoodle can boost an organization’s image enormously. The Edtech product allows teachers access to a vast video library, which encourages children to be creative, active and to enjoy learning. To offer their products at no cost, GoNoodle worked with significant institutions, No Kid Hungry, Nicklaus Children’s Hospital, and many more. This is a part of the creation of an educational environment that is equal that allows the less fortunate to learn alongside the wealthier students.


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