Indian online higher education market to reach 5 billion USD by 2025

Online higher education is emerging as the fastest growing sub-segment of the edtech sector.

The user base for online higher education grew by 75 per cent in 2021, despite a three times growth in the average ticket size compared to the K12 segment.

In fact, the market size for online higher education in India is now comparable to the largest edtech segments (K6-12 including test preparation), the report showed.

According to Bengaluru-based market research firm RedSeer, the macro-economic factors that will drive this growth include relaxation in regulations governing degrees, supply-side capacity gaps, realisation of the need for higher education among students and professionals, and transition to the credit system.

“India’s booming edtech market, which saw multiple startups and increased funding during the pandemic, is expecting further boost on the back of growth in higher education and lifelong learning segments. It’s safe to say that online higher education has impressed us all by emerging as the fastest growing sub-segment,” said Abhishek Gupta, engagement manager, Redseer.

The unbundling of courses and democratisation of access unquestionably boosts the demand for online higher education and also increases the completion rate.

Another growth driver is the supply-side capacity gaps.

India has supply-side constraints in education infrastructure (especially for specialised courses). Transition to the credit system as well as the realisation of the need for higher education by students and working professionals is further contributing to the boom in this sector.

The market for online lifelong learning also will expand further with “further push after Covid as the economic uncertainty further establishes the need for continuous learning,” the report said.

Apart from Covid, existing skills getting increasingly redundant, job creation lagging behind new additions to the workforce annually, and a mismatch between industry requirements versus education curriculum in colleges are the other reasons for growth.

The findings also saw that there was a steep uptake in M&A (mergers and acquisitions) activity as well in the online higher education segment.