Edtech Firms Must Work Out a Code of Conduct, Says TV Mohandas Pai
In a candid discussion, TV Mohandas Pai, a distinguished investor and former director at Infosys, shared his thoughts on the challenges and responsibilities facing edtech companies today. Emphasizing the need for sustainable revenue models, Pai underscored the importance of edtech firms delivering real value to their students. “The important thing is they have to work out their revenue model,” Pai mentioned, querying the value proposition edtechs offer to justify their pricing and the additional services they provide.
With the return to traditional classroom settings post-Covid-19, the spotlight on educational technology companies has only intensified, particularly around how they adapt to changing learning environments. Pai pointed out the significant role of human teachers in a child’s education, implying that digital platforms cannot wholly replace the personalized guidance and mentorship that in-person schooling often provides. “School education is different,” Pai stated, highlighting the critical need for direct communication between teachers and students in the educational process.
The landscape for edtech startups has been challenging, with fluctuations in sales and investor sentiment marking the recent years. From a surge in funding during the pandemic-driven shift to online learning to a more sobering current state of investments, the sector has seen its fair share of highs and lows. Data indicates a stark drop in funding from the peak in 2021 to significantly lower levels in the subsequent years.
Moreover, Pai touched on the subject of corporate governance, advocating for higher standards, especially for companies considering public offerings. His insights came from his recent experience on the advisory council of Byju’s, an edtech firm grappling with governance issues, where he was invested in bolstering the company’s corporate governance framework.
Pai refrained from commenting on controversies surrounding Byju’s. Instead, he extended his critique to the broader startup ecosystem, citing the need for responsible oversight by independent directors. His comments follow a scenario where regulatory actions against companies like Paytm highlighted the urgency for robust governance practices across the board.
Industry experts align with Pai’s perspective on prioritizing corporate governance to navigate the challenges faced by the edtech sector. With shifts in valuation and increased scrutiny, a clear emphasis on transparency, efficiency, and accountability becomes paramount for startups to thrive and regain trust among stakeholders.
Reflecting on his investment venture, Pai shared insights into the journey of Aarin Capital, the venture capital fund he co-founded. Discussing the fund’s strategy moving forward, he outlined a phase of divesting, underscoring a successful investment track record that includes a mix of media, engagement, and learning platforms.
The current investment climate, as Pai notes, is one of caution, with Indian investors particularly hesitant amidst a broader scarcity of capital inflow. This observation sheds light on the challenges and opportunities that lie ahead for edtech firms and the broader startup ecosystem in adapting to a dynamic financial landscape.
In conclusion, Pai advocates for a collective effort among edtech firms to establish a code of conduct, emphasizing self-regulation as the path forward. His call to action not only underscores the need for ethical business practices but serves as a reminder of the edtech sector’s inherent goal: to meaningfully improve education through innovation and responsibility.
