1. Home
  2. Blog

How to Start an Edtech Company and Win?

how to start an edtech company

EdTech, a combination of the words education and technology, is a digital education model wherein computer hardware and software are combined with educational theory and practice to impart knowledge and skills. Generally, EdTech businesses use this model to facilitate learning. 

While major players have contributed significantly in establishing this industry, there is still room for improvement and a huge demand for EdTech products and services. The expected growth rate of this industry for the next five years is 17%. This makes it a very promising market, with many EdTech entrepreneurs trying to break into the industry.

If you are an EdTech entrepreneur, an investor interested in education, or a business-oriented individual seeking lucrative ideas, this article will help you by offering a comprehensive guide detailing:

  • The current and forecasted overview of the EdTech industry
  • Why it is an excellent time to penetrate this market
  • Various options for funding your venture
  • The technology stack required for a minimum viable EdTech product
  • Steps on how to start an EdTech company
  • Important do’s and don'ts.

EdTech Market Overview

Although EdTech was huge even before Covid-19 hit, the pandemic has highlighted this education model in a way where it seems like a necessity rather than an alternative.

A significant share of faculty across the globe has exhibited the willingness to support digital educational models. The market is projected to grow at 5.08% CAGR by 2022, making it worth $234 billion, as per the forecast. Investors have shown incredible confidence in this sector, with Byju’s receiving $200-300 million and Yuanfudao raising $250 in funding, according to Statista.

In fact, with EdTech, it is no longer just students enrolled in schools or degrees who can benefit from eLearning.  Professionals across a diverse range of industries are also using such services. Did you know that PwC, Deloitte, Amazon, JPMorgan Chase, IBM, and Walmart all offer courses and training programs to their employees? EdTech is not limited to educational institutions anymore and has major international players in the user base - thus confirming that it is high time to build an EdTech company.

Today, this industry worth $89.49 billion consists of Learning Management Systems (LMS), mobile applications, web-based learning platforms, webinar services, etc.

If you are uncertain regarding your EdTech idea, book a consultation session with us. Our experts can aid you in determining the potential of your brainchild, given the market situation.

The Most Successful EdTech Companies

Let’s consider a few of the most successful names in the EdTech market and the competitive edge that has enabled them to thrive in an ecosystem where even companies with close to $95 million in funding had to shut down their operations.


Among highly revered names in the industry, Coursera is a top provider of MOOCs (Massive Open Online Courses) and boasts a user base of over 77 million. The platform has collaborated with prestigious universities and organizations such as Yale, Stanford, Google, and IBM to produce high-quality educational content accessible worldwide. It has also been able to obtain funding of more than $145 million from leading venture capital firms, including GSC Capital, Kleiner Perkins Caufield & Byers, and Laureate Education Inc.


At a whopping $16.5 billion, Byju’s is the most valued EdTech firm in the world today, along with being the most valuable Indian startup. With personalized learning programs, individual attention, and creative visualization of content, the company has been able to gather a large and diverse customer base. This is why you’ll find study material ranging from government exams and state boards to kids’ learning.

Strongly committed to its vision of “Education for All,” Byju’s believes in the democratization of education and continues to make dedicated efforts to teach students in geographically remote areas or those belonging to underserved communities.


Categorized among the global leaders in education technology, Udemy offers its 40 million users over 155,000 courses in over 65 languages. Not only does it provide education to school, college, and university level students, but it also gives professional training to its 7,000 plus enterprise customers.

Other popular names in the world of education technology are Skillshare, Chegg, and Duolingo, all of which have millions of users.

What’s interesting to note here is that all of these best eLearning platforms offer a mix of free and paid study material. While the free content garners users and repute, the paid material generates revenue - a business model widely followed in the EdTech domain.

Why Should You Launch an EdTech Startup?

If you’re debating whether to start an educational technology company, learn a few reasons why such a venture is the need of the hour - whether you look at it from a business perspective or through a humanitarian lens.

  • Transformation of The Learning Landscape

E-learning is being incorporated in education at a rapid pace in 2021, owing to the digital transformation in education. 72% of schools already use cloud technology, with 57% allowing the students to use mobile devices in the classroom and 48% providing online classes, a survey revealed. If statistics are to be believed, this trend will only go upward, so there is no time better than now to invest in EdTech.

Additionally, this industry is making education accessible at any age in any place. The attainment of education no longer comes to a halt after university. In fact, this very idea of education as a life-long process is being reinforced by major corporations worldwide that are heavily investing in the training of their employees. PwC, in 2019, announced $3 billion for this same purpose.

  • The Market Is Not Saturated Yet

To give you an estimate of how this industry is accelerating, know that the education technology industry is expected to grow to an $8 trillion market by 2025! This domain is still underfunded, there is a massive opportunity for growth with unexplored EdTech business ideas, and you can make your mark with an array of exciting technologies: artificial intelligence, gamification, blockchain, and augmented/virtual reality, to name a few.

  • Low Initial investment

The cost of starting an EdTech company today is relatively low owing to the increase in open-source software as well as highly feasible outsourcing companies. You can now build an E-learning website for 20-50% less than what it used to cost a few years ago. Additionally, the operational costs are also low. For example, eBooks can easily be mass distributed, revised, and published without incurring significant costs.

  • Attractive Investment Option

Since the market is still very welcoming and a highly profitable business can be started at a low cost, investors are finding this industry very attractive. However, since they have started to invest heavily in EdTech, they have gotten more selective about who they choose. Thus, the true test of your abilities here would not be to convince them that EdTech will be profitable; rather, your EdTech product will be profitable out of a plethora of emerging startups.

Over the years, with our vast portfolio of EdTech projects, we have identified the factors that investors focus the most on when it comes to a startup requiring funds. Drop us a message to learn how you can score the investment you’re aiming for.

  • Democratization of Education

While this may not be a monetary advantage, it is still among the top merits of an EdTech startup. Education is a basic human right, and this model has made education accessible to everybody, irrespective of financial, social, and cultural backgrounds. What was previously available only to those who could afford its high cost is now being offered to anyone with an internet connection with a few clicks. Hence, EdTech aims to develop a relatively fair playing field when it comes to education.

How to Fund the Launch of an EdTech Startup

how to start an edtech startup

One of the prime tasks that need to be accomplished before you can launch an EdTech startup is to arrange funds. 

1. Loans

Loans can be obtained from nearly any bank. Certain government and state initiatives make it easier to get funding. While the lender will have no control over your business and the payments are often simple monthly installments, there is interest charged on the amount lent. The loan has to be returned - sometimes along with collateral - irrespective of the success of your business.

2. Investment

There are two options here: angel investors and venture capital funding. Angel investors are extremely wealthy individuals using their own money, whereas venture capitalists invest on behalf of other individuals or companies.

The merit to this type of funding is that almost any amount of money can be obtained, the investors might come with networking opportunities, and if the startup fails, the investment money doesn’t have to be returned. However, you need to prove that your idea is viable and it will make a significant return on investment. More importantly, investors provide money in exchange for a stake in the venture, which means that, proportional to their shares, they will have control over your business.

3. Grants

Numerous organizations and institutions worldwide provide financial assistance for educational purposes or offer general-purpose grants for commercial reasons. The upside to grants is that this money does not have to be repaid. The downside is that you have to fulfill the criteria to be eligible for the grant, and your education startup ideas must be as per their requirement.


Bootstrapping refers to the approach of solving a problem with existing resources. This means using any financial resources you currently possess. The benefit of bootstrapping is that you maintain all control of your company since no other entity has any stake in it. However, the drawback is that, quite often, it is not possible to collect the required amount from one’s own resources.

That being said, if this option is feasible for you and you are willing to take the risk of self-funding, it is highly recommended to launch an EdTech company with bootstrapping since you’ll retain the power to make any and all decisions regarding your business.

5. Crowdfunding

A relatively unique take on funding, crowdfunding is a model where funds are raised by collecting a small amount of money from numerous people. This is usually done in exchange for rewards or non-monetary bonuses. With the drastic growth of the internet over the last few years, this approach has gotten exceedingly popular. In fact, in 2016, crowdfunding equity exceeded venture capital funding.

While this method lets you have full control over your business, it is necessary to offer a very strong business proposition and a vision the donors can relate to. This is where effective marketing comes into play - completely random strangers over the internet can fund your entire venture in just a few weeks, but you need to motivate them to do so. Otherwise, if the crowd does not pledge the required amount, you will get nothing out of crowdfunding.

Some popular crowdfunding sites include Kickstarter, GoFundMe, Patreon, and Indiegogo.

The right funding strategy depends upon your financial health, priorities, and startup requirements. With our vast experience in building EdTech products, we can help you choose the correct approach to fund your company.

Technology Stack for Starting an EdTech Startup

Whether you will build an EdTech startup completely yourself or hire developers, and whether you will create a learning management system or are looking into developing an educational app, there are certain tools and technologies that will power the software your customers will use. Optimizing this "stack" of technologies can mean the difference between a successful and failed product.

  • For the frontend, use the latest versions of HTML, CSS, and JavaScript. It is also a good idea to use a frontend framework to get server-side rendering, flexibility, better support for mobile development, top-of-the-line performance, and productivity. Highly in-demand frontend frameworks include React, Angular, and Vue.
  • Consider the kind of data you will be storing and whether a relational database is more feasible for it or if a non-relational database would optimize data storage better. Popular choices are MySQL and PostgreSQL on the relational side and Redis or Memcached for non-relational storage.
  • When selecting a backend framework, consider factors such as usage and purpose, deployment patterns, ease of installation, core library, and documentation. Popular backend frameworks include Django, Rails and Node.js.

As a use case, let's consider an EdTech web-based application. A highly recommended and optimized technology stack for it would be a PERN stack based on the following tools/technologies.

  • PostgreSQL (relational database)
  • Express (web application framework)
  • React (frontend framework)
  • Node.js (backend framework)

6 Steps to Start an EdTech Company

While details such as a business plan, a business model, and a marketing strategy are all undeniably important, here are the focal steps to concentrate on to get your startup up and running.

1. Conduct Market Research

No matter how profitable and necessary a business venture seems to you, it is incredibly important to conduct market research when considering launching your venture. Trends change, forecasts are altered, market dynamics shift, and key players enter and exit the market. Therefore, thorough research is required to ascertain if it is the right time to step into a certain market.

For EdTech, the time has never seemed better. The stellar forecasts promise a $234 billion industry in 2022 that is expected to grow at a rate of 17%. Coupled with this, the pandemic has accelerated the already steep growth of the industry. The low costs, added convenience, high accessibility, and a wider range of options offered by EdTech have made learners eager to use this mode of education. There can hardly be an easier and more profitable opening than what is here today.

2. Settle on a Niche

EdTech is a vast ecosystem of learning that consists of numerous sub-domains, models, and divergent technologies. Therefore, do not mistakenly assume that a single company can be well-equipped to handle all that this field encompasses. The goal here is to find and specialize in your own niche. If you promise to deliver an all-in-one solution, the public would likely be very skeptical of it - especially since you are a new entrant. However, if you offer a specialized product or service by adding your own unique spin to it, it is more likely to succeed.

Some helpful tips here include conducting research on competitors, analyzing their public financial records, breaking down their available market strategies, and understanding the tools and technologies they employ. This will give you a deeper comprehension of your own future roadmap.

3. Decide on a Value Proposition

A value proposition is more than just a statement describing your business. It's a make-or-break deal in the way that it highlights your competitive advantage. Why should users consume your product instead of your competitors'?

When crafting this statement, decide what aspect of your product intrigues your customers the most - functionality, design, pricing, variety, etc. - and then make it your selling point.

4. Develop an MVP

When you lay the technical foundation to create an EdTech startup, bear in mind that you have no idea how your company would perform and how the market would receive it. Hence, to mitigate your losses and any potential risks, develop a Minimum Viable Product (MVP).

This is an early version of the product with only the most necessary features and functionality. The aim here is not to impress the users but gauge how they respond to the product. Their feedback then guides modifications in the product. This way, the product is tested in the market in real-time while minimizing any risks and costs associated with a focus on design and additional features.

It is not uncommon to partially outsource the development of an MVP to minimize resource usage. You can have a detailed discussion with us to identify how much of your EdTech MVP can be outsourced.

5. Raise the Required Funds

Once all else is decided, raise sufficient funds to progress your venture to the next stage. The five main funding methods have been described in detail earlier in this post. Make an informed decision regarding this crucial step by carefully evaluating the pros and cons of each alternative.

6. Regularly Incorporate Feedback

If there's one thing to pay attention to when it comes to your product, it's the feedback. Whether it comes from fans of your products or in the form of criticism from your rivals, listen to how your work is being critiqued in the real world. Next, assess the strengths you need to amplify and the weaknesses you have resources to eliminate.

Our Expertise in E-learning Industry and Advice About Starting an EdTech Company

Having created numerous successful EdTech projects and after assisting various clients with their EdTech products, we have gathered some useful advice to remember when you set out to create an EdTech company.

  • Make sure you are solving a real problem eLearning is facing. 42% of startups fail simply because they do not address a real need. Before focusing on the functionality of your product and investing resources into developing them, determine whether there exists a large need for the solution you are offering.
  • Price your product in accordance with market trends, competitor prices, user affordability, and estimated profitability in the domain. Do not keep the prices too low to attract customers at the expense of facing loss, and do not aim for too high a profit by selling a product so expensive that customers do not consider purchasing it.
  • Customer retention is key in any business. Devise engaging marketing strategies to keep the customers returning to your product. Furthermore, pay attention to customers who have had a very positive experience with your product and exclusively target dedicated efforts towards them in the form of personalized recommendations or discounts and offers, etc.
  • Whether you have an in-house technology team or have partnered with a vendor, ensure robust and scalable technology for your business. No matter how innovative and competitive your product is, if the user experience is marred with time delays, unavailability of the website/application, or lags in content buffering, they will be put off from using it.

If you're uncertain how to price your EdTech product, what kind of technologies to utilize, or how to retain your customers, we're here to help.


The takeaway here should be that if you're considering how to start an EdTech startup, you have to analyze every aspect thoroughly - market statistics, merits and demerits of stepping foot in the industry, detailed plan of activities, funding opportunities, technology stacks, the do's and don'ts, and much more. Notwithstanding how lucrative the market appears currently, it will not give space to an ill-prepared newcomer.

We understand that this can be a daunting process, especially if you wish to focus on your product and not the other business details. Have a consultation session with us to see how we can be of service to you.

Subscribe to our newsletter

pros and cons of react js
prev postAdvantages of React JS and Why We Like It [Based on Our Experience]
next postTop 10 Weightiest LMS Functional Requirements
lms functional requirements
0 commentsSign in to leave a comment