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Online coaching for exams to public service feeds a $15-bn business

Thomas Abraham | Updated on September 04, 2020 Published on September 04, 2020

Circle of life: The business of coaching for competitive exams is valued at around $15 billion   -  S SIVA SARAVANAN

Students in towns big and small go online to prepare for competitive exams

* There are 30,000-odd coaching institutes across the country that are looking to go digital to reach students beyond the metro cities

* Edtech companies such as NeoStencil, Unacademy, TestBook, Gradeup, and VisionIAS help students access coaching classes online

* Coaching classes for competitive exams is an estimated $15-billion business

Growing up in Geedam in Dantewada, Chhattisgarh, Namrata Jain dreamt of joining the Indian Administrative Service. She was well aware of the respect officers of this elite service commanded in every town and village across India. But cracking the tough entrance exam, for which millions of young Indians prepare day and night annually, was easier said than done for a girl in Namrata’s circumstances.

The nearest coaching centre was in Dantewada district, around 20 km from her home. Living in an area prone to Naxal violence, it was difficult for her to join a coaching centre. She tried relocating to Delhi for a short period but returned unable to cope with the challenges of living alone in a metro city.

And yet, in 2018, Namrata not only cleared the Union Public Service Commission’s (UPSC) civil services exam, but also ranked No. 12 at the all-India level. Without stepping out of home, she attended the coaching classes conducted by Lukmaan IAS Academy through the Delhi-based online coaching hub NeoStencil India.

Set up in 2015 by Kush Beejal, an IIT-Bombay and IIM-Calcutta alumnus, NeoStencil was inspired by Beejal’s own struggles to prepare for competitive exams during his student days.

“After working as an investment banker and corporate finance manager, I decided to start something on my own. In view of the hurdles that my brother and I faced while preparing for competitive exams, I decided to enter the test preparation segment of the education sector and solve the problems faced by millions of students,” he says.

Connecting the dots

The first-rank holder in the 2019 civil services exam, Pradeep Singh hails from Tewri village in Sonipat, Haryana.

“Technology has bridged the gap between rural and urban students,” Singh, who also attended NeoStencil’s online classes, told BLink.

On one end are the 30,000-odd coaching institutes scattered across the country that are looking to go digital to reach students beyond the metro cities; and on the other are the millions of students who want to access these courses from their homes.

Bringing them together are companies such as NeoStencil, Unacademy, TestBook, Gradeup, and VisionIAS — all of which belong to the edtech sector, which harnesses digital technology to provide education services. This they do by first digitally enabling offline coaching institutes and then helping students discover these institutes and connect with them through their online platforms.

“When we were doing our pilot in January 2015, our technology was not up to the mark. Yet one student wanted to pay and prepare for UPSC on our platform. He was an investment banker in New York. That gave us confidence that we were adding real value to the user. Six months later, he became our first angel investor, and a repeat user for the next three years,” Beejal says.

Today, NeoStencil makes available teaching material from around 100 institutes in the form of live online classes — nearly 500 each year. “We are currently focusing on the government job [entrance] exams segment, which sees around 70 million applications every year,” says Beejal.

To secure a government job, every year an estimated 50 million Indians prepare for entrance exams for the UPSC, banking services and the National Defence Academy, among others. Another 10 million prepare for college entrance exams such as the Joint Entrance Exam (JEE) for IITs, National Eligibility cum Entrance Test (NEET) for medical and dental undergraduate courses, and Common Law Admission Test (CLAT) for law colleges. This, in turn, generates a demand for coaching classes, which is a business that is estimated at around $15 billion.

The size of this business is expected to grow even further due to changes under the New Education Policy that require students to take a common entrance test for college admission, instead of the existing system of relying on Std XII marks. Beejal plans to increase the number of coaching institutes on his platform to 1,000 and cater to more competitive exams in the coming years.

NeoStencil allows students to pick courses across institutes — for instance, history from Institute A and geography from Institute Y. It live-streams classes from the institutes.

Online coaching, Beejal says, has also allowed more women to join up. Female candidates make up 30-35 per cent of all applications for UPSC and other government jobs; at NeoStencil, nearly 50 per cent of users are women.

“This is a great validation of our platform... helping girls realise their dream of joining top jobs and institutes, which would otherwise be difficult for them in our conservative society, as it means relocating to coaching hubs,” Beejal says.

Last month, felicitating youngsters belonging to minority communities who had been selected to the civil services 2019 batch with the assistance of his ministry’s free coaching programmes, minority affairs minister Mukhtar Abbas Naqvi, too, had observed that “more than 50 per cent of these beneficiaries of scholarship schemes are girls”.

The free coaching under the ‘NaiUdaan’ and ‘NayaSavera’ schemes for minority communities covers UPSC and other competitive exams, he’d added.

A buzzing market

At NeoStencil, students pay anywhere from ₹3,000 to ₹1 lakh for a coaching programme. Students from needy sections and remote locations are given up to 30 per cent scholarships, says Beejal. He adds that the online courses help students save on the relocation costs they would incur if they moved to study at the coaching hubs in places such as New Delhi, Kota and Hyderabad.

With online coaching, students can also pursue a regular job simultaneously, thanks to the flexible schedule.

Of the more than 1.5 lakh students who have used the NeoStencil platform till date, more than 400 have entered the civil services.

Beejal believes the current economic situation will only serve to step up the demand for coaching services. “Amid the economic dip in India and rising job insecurity in the private sector, many undergraduates are looking to government jobs as a career,” he reasons.

Thomas Abraham

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Published on September 04, 2020
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