The sector significantly turned its attention to digital advertising with a rise of 74 percent in ad insertions from 2021.
The year 2021 was the most stellar year for Indian startups when we talk about funding. Startups were able to secure a total funding of about $42 billion last year, a report by Orios Venture Partners stated. Compared to that, a heavy dip in investor interest was witnessed in 2022. Data platform Tracx confirmed that the overall funding dipped by 35 percent in 2022 (till December 5) and stood at $24.7 billion.
In the startup ecosystem, one of the most explosively growing sectors has been edtech. The third most funded sector in 2021, edtech, raised $4.7 billion last year. However, the funding plummeted significantly in 2022. Till October 2022, the funding in the sector plummeted by 38 percent, from $3.98 billion last year to $2.43 billion.
This sharp decline in funding also led to a sharp decline in the advertising spending made by the sector collectively. Data shared by AdEx India - A Division of TAM Media Research found out that the ad volumes for edtech dropped by 40 percent in 2022 in comparison to 2020 for television.
When comparing with 2021, the ad volumes dropped further by 62 percent in 2022 for edtech category.
The picture for the two major mediums of advertising, TV, and digital, for edtech is very different. "The advertising trend on the digital medium was exactly opposite to that on television. The ad insertion (frequency) of the ads from edtech category grew exponentially over a period. The ad insertion in 2021 grew by 36 percent and in 2022 by 110 percent over 2020 for the edtech category," the report states.
While over 70 unique edtech advertisers spent on TV advertisements in 2022, the number of advertisers in 2021 was well over 90. BYJU's held the majority share in this category. Its share grew from 34 percent to 49 percent in terms of total ad spends from 2021 to 2022. Whitehat Jr, one of the most prominent startups in 2021, had a share of 28 percent in the total ad spends on television advertising in 2021.
However, witnessing a sharp decline in funding and a subsequent mass layoff, the company had a tough time in 2022. This led to a decline of about 22 percent in their share in TV ad spends, standing at 6 percent in 2022.
2022 saw LEAD School becoming a unicorn. Their ad spends also increased on television advertising in 2022, making them the second largest TV advertisers in 2022. LEAD School commanded a 9 percent share in the total ad spends on TV.
While TV advertisements were dominated by BYJU's, the biggest name in the space, the digital space saw significantly greater participation from the other players in the space. BYJU's commanded 15 percent of the share, Interviewbit 10 percent, upGrad 6 percent, Udemy 5 percent, and Whitehat Jr had a 5 percent share in digital advertising. The number of total unique advertisers also grew from over 2600 to about 3150 in the digital space.
The other two edtech unicorns, Vedantu and Unacademy, ranked between 10 to 20 on both TV and digital ads in both years.
Considering the ad volumes in the months of September, October, and November 2022, the ad volumes for BYJU's were the highest. The market leader spent the most on TV advertisements in November, during the Indian festive season. Unacademy only spent on TV advertisements in October, while Vedantu didn't advertise on TV during the period.