Most online articles claim EdTech is new, but it’s not. EdTech is an ecosystem that uses technology to deliver education. A 90s school’s computer lab could be an EdTech.  Few people knew in the 1990s that smartphones would have more gigabytes than computers. If modern devices are compact and pocket-friendly, shouldn’t education and its delivery be the same? Check out below to learn more about the Edtech Business Model. 

Education apps benefit kids and organizations, which is why entrepreneurs are clamoring for venture capitalists to fund the future, or present, of 21st-century teaching, EduTech.

EdTech apps, including educational apps for kids and organizational learning, have become one of the most lucrative and attractive Edtech Business Model for innovators and investors. Few industries can survive the COVID-19 pandemic and maintain their promising growth. Why do we say that?

  • Grand View Research estimates that the global education technology market will grow 19.9% from 2021 to 2028 from USD 89.49 billion.
  • According to HolonIQ, global digital education expenditure will reach $341 billion by 2025, driving education startups and kids education app startup ideas. 
  • However, this accounts for only 4.4% of the industry’s projected expenses. 

On whiteboards, internet business opportunities seem immensely promising, but when it comes time to execute, they become a nightmare. Think about the following sub-verticals, which e-learning startups are using as a model for their portfolio of educational app development. They can also be interpreted as promising ideas for educational applications that will undoubtedly succeed in the future.

Growth in Interest for EdTech 

Every aspect of our lives is being changed and impacted by technology every day. But businesses are also changing and can’t afford to turn a blind eye. It’s not just our lives. The Organization for Economic Co-operation and Development (OECD) predicts that in the next ten years, technology will change 1 billion jobs or roughly one-third of all jobs worldwide. 

The “World Economic Forum Annual Meeting” projects that by 2022, about 42% of all core competencies thought to be necessary for jobs will have changed. Only technology can provide such a rapid and inevitable upskilling revolution in a practical manner.

The US spends an average of $12,624 per student in schools, which is the fifth-highest amount among the 37 other developed nations in the Organization for Economic Co-operation and Development (OECD), according to the Education Data Initiative.

Based on an analysis of Pitchbook data, Reach Capital reports that U.S.-based education technology companies raised over $3.2 billion in investment capital in the first half of 2021.

It might be an anomaly, though. What if, just by coincidence, rumors fueled by venture capital had created a buzz somewhere? We can put this evaluation to the test using a litmus test. 

We selected three well-known educational startups for our experiment that are opportunistically developing their Edtech app business models. One way to assess the level of demand for their services among the general public would be to observe the impact of their virtual education startups amidst the COVID-19 pandemic.

Chegg, Ltd. 

  • This startup in education technology offers a full range of digital learning solutions in its product suite. Chegg reported US $132 million in revenue in the first quarter of 2020, during a period when companies are begging for government assistance to stay afloat.
  • On April 13, 2020, Chegg made its most recent investment when Frank Financial Aid raised $5 million.
  • They had 6.6 million subscribers by the end of 2020.

K12 Inc. 

  • An education management company called K12 encourages students to complete their kindergarten through 12th-grade curriculum online rather than in a traditional classroom. They are among the top educational apps for children because of their mission.
  • They made $257.2 million in revenue from their edtech business in the first three months of 2020. It is just slightly more than their $253.3 million in earnings during the same time last year.
  • In revenue, the online public school program brought in $228.3 million for the company as a whole. 
  • Reiterating why K12 is among the greatest educational apps for children, CEO Nathaniel Davis provided insights into user query trends for registration, which were high for both February and March.

2U Inc.

  • 2U sets itself apart from other education firms with its end-to-end learning channels, which enable non-profit academic institutions to provide online degrees.
  • For its B2B partners, it uses a Software-as-a-Service (SaaS) approach. 2U reported Q1 2020 earnings of $175.5 million in the United States. 
  • Its SaaS company brought in $118.5 million in sales. GetSmarter (short-term courses) and Trilogy Education (boot camps)—two purchases made by 2U—brought approximately $57 million in consumer spending. 
  • They are collaborating with Simmons University, an established client, to implement a digital undergraduate curriculum as part of their immediate objectives. In addition, during the COVID-19 epidemic, they introduced a video production solution called Studio in the Box, which let faculty members film training sessions from home. 

Trends Affecting the Edtech Industry

The gadgets are becoming more effective and intelligent. IoT is creating a dense network of interconnectivity that ensures the collection of huge data and allows AI to find ways to improve autonomous consumer experiences (CX). Speaking of which, Mixed Realities will improve the CX by giving EdTech a fresh perspective and accelerating its growth. 

The COVID-19 epidemic has hinted at a potential acceleration of Blockchain adoption. This might pave the way for the usage of distributed ledger technology in safe and decentralized data management. 

Worldwide Internet Adoption 

Approximately 4.88 billion individuals, or 62% of the global population, had an internet connection as of this writing. According to Cybersecurity Ventures, there will be 6 billion internet users worldwide by 2022—the year that the world’s population is predicted to reach 8 billion. It is predicted that there will be 7.5 billion internet users worldwide by 2030, which might account for 90% of the 8.5 billion people on the planet at that time. 

Digital education access would guarantee a global experience focused on B2C education delivery channels. 

Edtech solutions may be the answer to universal access to education as course materials are becoming more and more available from a distance. 

Textbooks and digital classrooms may lower publishing costs. Every student might get individualized instruction, with self-paced learning becoming the norm.

It is ideal for kids with impairments, for whom coming up with creative, specialized educational plans won’t be a problem any longer. In addition, it offers those with foresight equally rewarding online business options.  

Data-Driven Decisions 

The E-learning exercise’s base will be digital textbooks. Examining the trends in online education might provide valuable insights into how best to allocate the resources required for a fulfilling, multi-sensory experience. 

Personalized interactions would rise. The rapid advancement of big data, artificial intelligence, and machine learning means that content distribution will be more precise and error-free than in the past. 

Academic establishments are starting to acknowledge that data management has to be updated. Spreadsheets were insufficient in this situation; visualization tools have their role. 

When faculty members let predictive analytics to do its job, they can focus on what they do best, which is teach. 

Virtual Reality 

The gap between learning and doing is getting smaller thanks to virtual and augmented realities. Immersion learning, to put it briefly, is the method of teaching using AI and simulations. 

Younger generations might recall visiting a scientific park to see demonstrations of experiments. Now, you can virtually visit the park by donning a VR headset. 

One example is the Danish Business Labster, which creates virtual lab simulations for STEM (Science, Technology, Engineering, and Math) courses. It got $60 million in Series C investment in 2021.

Frontline employees in specialized trades may upskill using Interplay Learning, an online training platform, to become proficient in their jobs. It trained individuals using VR and 3D simulations, and in early 2021 it secured US $18 million in a Series B round of funding.

Augmented Reality 

Because augmented reality is compatible with smartphones, it has a greater chance of being widely adopted in the Edtech sector sooner rather than later than virtual reality. 

The BBC Civilizations AR app is the ideal illustration of this. 

Not to be forgotten, Niantic Labs, the company that created the augmented reality game Pokemon Go, received US $245 million at a US $4 billion valuation last year. It keeps collaborating in this area with charities to support AR education. 

Conversational AI 

Individuals are starting to regard voice-activated gadgets as a necessary component of their household tasks.

It is an example of conversational AI helping people, and the education sector may soon be using it. 

One such example is Cognii, which offers conversational AI solutions with open-format replies to enhance critical thinking for both business workers and K–12 students. 

Adaptive Learning

With adaptive learning, students receive instruction tailored to their individual needs through algorithms. 

  • But prior attempts by one firm, Knewton, to revolutionize higher education through hyper-personalized learning fell short of expectations and caused the company to lose its US $180 million funding. 
  • However, progressive measures are still being implemented. Quizlet is an AI-powered study aid for students. It determines each child’s most urgent requirements using machine learning algorithms and then customizes the experience to meet those needs. During the COVID-19 epidemic, Quizlet just concluded its Series C investment at a valuation of US $1 billion, indicating strong investor confidence. 
  • With comparable products on the market, Querium, KidSense, and Kidaptive are also competing and attempting to establish a name for themselves. 


The field of robotics in school management is also growing. 

  • The Roybi Robot, the company’s eponymous product, teaches STEM concepts to young children between the ages of three and seven. 
  • Roybi matches a child’s cognitive ability with pattern recognition using machine learning. The product recognizes that education must be tailored to each individual student and is not a one-size-fits-all item. It was listed as one of the greatest innovations of 2019 in TIME magazine. 
  • Robotify is a startup company located in Dublin that instructs kids in programming using hardware installations in classrooms. 


The decentralized foundations of blockchain technology may play a significant role in modernizing outdated educational infrastructure. Simultaneously, it may encourage students to work hard and receive recognition for accomplishments like earning a major degree in a certain field. In addition, it has the ability to handle data and secure it in unchangeable ways for the archiving of student records. 

  • The MIT Media Lab and the Learning Machine (now Hyland) came together to create Blockerts, an open platform. It may be used for a variety of tasks, including as storing and verifying information as well as issuing certificates and degrees. The platform may be recommended to prospective employers as a way to verify background information. 
  • A program called ODEM uses blockchain technology to match qualified teachers with students and working professionals. The details of a course are recorded using smart contracts. With time, the ODEM ledger identifies trends based on the courses each student has taken in the past and the instructors who instructed them. On the platform, ODEM tokens may be used for transactions. In order to demonstrate their knowledge and expertise, ODEM issues skill badges to the participant’s profile.  
  • The Appic Softwares-developed Nova Learning Management System makes it simple for instructors to publish their courses. However, the app makes it simple for students to sign up for and complete the course. Appic Softwares offered a solution that changed the edtech industry for the better.

Game-based Learning

Similar to immersive learning, gamification includes students in the process, making it an effective use of technology in education. Having been in use for 20 years, this approach is not new. Today’s online learning systems heavily utilize it since it is so useful.

I know you’re wondering what makes it work so well. In other words, you already know that playing is easy and fun, whereas learning is usually difficult. Therefore, most people think that gamification includes a broad variety of methods that might improve the user experience.

Gamification consists of two main components.

  • It is unnecessary to waste time and energy attempting to hold children’s attention since they are presented with a comfortable and stimulating setting from the outset.
  • Second, the adaptability of the platform makes learning enjoyable. Your creativity is the only restriction.
  • The clearest example of this is the project “Minecraft: Education Edition.” This well-known computer game, which has been effectively employed for educational purposes, is enjoyed by millions of kids. The versatility of this instrument makes it ideal for use in a wide range of subjects, such as geography, English, biology, chemistry, physics, and architecture.

After discussing what makes the EdTech industry a viable online education business model and what the future holds, an entrepreneur’s next course of action should be to be ready for a success-guaranteed entry into the market.

EdTech Business Models

During the pandemic, conventional institutions such as schools, colleges, coaching institutes, and others faced tremendous difficulty. As a result, the breadth of schooling expanded.  The learning class had to quickly upload all of their work on the internet in order to guarantee business and learning continuity, which made education easily accessible. These Edtech Business Model were already in place, but the pandemic problems caused them to explode.

Freemium Model

For startups, it’s a compelling idea since it enables you to establish your brand’s credibility and establish yourself as an authority in your field.

For instance, Coursera started off by providing free courses on a variety of subjects with the opportunity to earn a credential. With $210 million in investment, the business quickly became well-known as a leader in edtech and Edtech Business Model.

With this strategy, you may swiftly get a lot of traction and provide your product straight to the customer, cutting out the middlemen. The principal-agent dilemma in education has the drawback that your users are not your consumers.

The Edtech Market

In the absence of original material, you create a marketplace like Amazon where teachers may register to sell their creations. With this tactic, instructors may advertise their courses to a broad audience and the platform will keep a percentage of the sales.

Edtech Business Model by well-known Edtech startup Udemy has switched to a marketplace business model. Through the internet marketplace Udemy, companies and individuals may provide online courses. Its current value exceeds $3 billion. The Edtech Business Model of Udemy offers a wide range of tools for generating, promoting, and making money off of these courses and the learning resources that go along with them. They also take 50% of the course fee.

Institutional Model

One more conventional approach to selling to schools through district administrators is the top-down or institutional strategy. After calculating the market size, the target market volume is ascertained using the anticipated penetration rate.

A plan is developed to realize the potential income when the target market volume has been established. In order for this to function, a district or area head must make a single purchase for each school under its jurisdiction. One benefit of the top-down paradigm is that it permits districts to enter into large contracts.

Consumer Model

A new online education business model called the “consumer approach” enables schools to test a product for free before charging families to use it at home. This idea works best for companies that provide items that kids can use on their own. In this scenario, educational institutions function as efficient catalysts for consumer acceptance.

Establishing a “product loop”—teachers using the product with students in the classroom and then advising parents to have their kids use it at home—is crucial to this approach.

The advantage of this approach is that parents are more inclined to follow teachers’ recommendations for using technology at home since schools favor free, high-quality products, which can boost user adoption. The use of edtech devices for young children and kindergarteners is especially noticeable.

Sponsored Model

An interesting and novel strategy is one in which neither the parents nor the school bear the costs. s part of a corporate social responsibility (CSR) initiative, a business is invited to sponsor and contribute to the cost of product placement.

Offering a great product to schools at no cost has the advantage of relatively high utilization, which is all that counts to the sponsor. The sponsors can increase goodwill and brand recognition for their business.

Sponsored products, like GoNoodle, may significantly improve a business’s reputation. Teachers may access a vast video collection that inspires students to be engaged, imaginative, and love learning with the help of this Edtech tool. GoNoodle collaborated with important organizations including Tonies, No Kid Hungry, Nicklaus Children’s Hospital, and many more to provide their products for free. This helps to establish an equal classroom where those from lower socioeconomic backgrounds may study alongside those from higher socioeconomic backgrounds.

How to Create a Successful EdTech Startup Business Model?

Since the COVID-19 epidemic hit the world, interest in EdTech has increased.

EdTech enhances pedagogy and the learning process, hence enhancing the conventional educational system. Edtech is not limited to the education industry; it also includes working individuals in large corporations for corporate learning. Here are some guidelines to help you develop a winning Edtech Business Model.

Have a clear grasp of your user base: Although children or workers will use the app, parents or organizations will ultimately make the decision. 

Recognize the shortcomings or problems of the present Speak with your clients, find out about their problems, find out what they believe is missing from the present system, and find out which improvements they believe would improve their educational experience. In the end, develop a user persona to satisfy the demands of your clients. 

Construct an MVP Create an MVP containing your offering’s essential features or unique selling points before releasing a full-fledged application or solution to the market. Share the MVP with potential customers once it has been developed to see how they respond to it. Whether they have a favorable opinion of the product.

How Much Does It Cost to Create an EdTech Business App?

An educational app’s true cost has never been simple to ascertain because of a number of variables, such as the app’s complexity, features, and functionality, the operating system it uses, the length of its development period, and the cost of the development team, to name a few.

However, the price to develop a basic education app might be anywhere from $15,000 to $25,000+, depending on the business you pick. However, keep in mind that this is only an estimate and may change based on how many hours it takes to construct.


The EdTech sector will expand rapidly on a worldwide scale. The fastest-growing Edtech businesses, or Edtech Startups, especially in the US, China, and India, are receiving venture capital infusions, which suggests that parallel development sectors are developing between the West and Asia. 

We make this claim based on our examination of every Global Edtech Unicorn. Not only has online learning emerged from its obscurity, but it has also become a vast network of cutting-edge technology. Numerous edtech businesses have experienced success and failure.

Startups, or most startups, fail for a variety of reasons, not only in this industry but everywhere else as well. One of the main causes is that they overpromise by creating hype in the lack of solid information. BYJU’s, Udemy, Coursera, and Udacity are among the world’s most valuable Edtech companies because they swiftly recognized technology’s potential to cut education costs. Educational software developers must handle different languages, devices, remote access, and 24/7 availability.

Appic Softwares is a top choice if you need an Edtech App Development Company. Appic Softwares has an experienced team of developers that can create an ed tech app that will last for years to come.

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