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Byju's, a struggling edtech startup undergoing insolvency proceedings, faces new challenges. Amazon Web Services and Vodafone Idea have halted their services due to unpaid bills. While AWS provided cloud services, Vodafone Idea was the firm's sole mobile network service provider. Byju's found it challenging to repay the loans it had obtained from US-based lenders. Over 10,000 people have been laid off in the last two years. Due to a severe liquidity shortage, salary reductions, and investor payment defaults, the company found itself in a risky scenario. Let's first understand the role of Byju's in the Indian Education System.
Byju's, Education Technology, and India's Educational System
India's educational system needs to be fixed. Government-run schools and universities serve a considerable proportion of the population but need more infrastructure. India's public education investment as a percentage of GDP has been about 3% for several years, which is lower than in many other nations with strong education systems. According to the Ministry of Education's 2022 report, more than 60% of government schools confront teacher shortages, affecting educational quality and student-teacher ratios. Furthermore, the obsolete syllabus and curriculum must provide students with the abilities required to meet the demands of the modern world. Furthermore, there is a severe scarcity of qualified teachers.
Role of Byju's in the Indian Education System
Ed-tech platforms such as Byju's, Unacademy, and others first tried to overcome these difficulties and were generally successful. They democratised education by giving flagship courses previously only available to the wealthy in Indian society. From K-12 to UPSC preparation, these ed-tech platforms could provide classes at a very reasonable cost and means to the general public.
Since early this month, the ban has apparently caused numerous crashes in Byju's mobile app and made its standard contact number inaccessible. While its website is still operational, server-related troubles have become more regular. Internal sources also stated that work at the firm has stopped, with several staff leaving the organisation and others actively seeking new possibilities. When contacted, Byju's denied the suspension of services, noting that its app and website are still fully working. The company said that it has transferred its databases to Google Cloud. Vodafone Idea and Amazon Web Services could not be reached for comment.
Approximately 400 ed-tech startups, including Byju's, Upgrad, Eruditis, Vedantu, and Physics Wallah, are based in India. Their big break came when the global pandemic of COVID-19 caused numerous schools, colleges, and other educational institutions to close. As every aspect of life moved online during the pandemic, internet connections, computers, and mobile phones soared. Students turned to online learning and rapidly adjusted to it. Over the epidemic years, there was a significant increase in the number of users on these networks. For instance, in just four months, Byju's user base is said to have grown from 20 million to 40 million. For any ed-tech company, achieving the growth trajectory that Byju's experienced during the epidemic would have required years. Sites such as Toppr and Unacademy have accomplished comparable successes.
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