Edtech startups like Byju's, Unacademy look to draw up a code of conduct

New Delhi | Bengaluru: India’s largest EdTech startups including Byju's, Unacademy, upGrad and Vedantu have grouped together to adopt a self-regulatory code and will adhere to a “common code of conduct,” they said in a letter to the union ministry of education sent on Monday.
This move by the consortium of fifteen companies—that have set up an autonomous body called the ‘India EdTech Consortium’ under the aegis of the Internet and Mobile Association of India (IAMAI)-- comes at a time when the threat of regulatory oversight looms large over the fast-growing sector. Last week, the union education minister Dharmendra Pradhan, said that his office is in talks with the ministry of law as well as the ministry of electronics and information technology to work out a regulatory policy for the EdTech sector.

In its missive to the government, the industry grouping said it would also establish “a two-tier grievance redressal mechanism to ensure that business is conducted with high transparency and with customer interest in mind.”

ET has reviewed a copy of the letter.

Other EdTech firms that have joined the IEC include Careers 360, Harappa Education, Times EdTech & Events Ltd, Simplilearn, Doubtnut, Classplus and Toppr, with more companies expected to “come on board,” sources told ET adding that the managing committee for the grouping will be finalised this week.

This move, a first by Indian EdTech companies, comes amid a growing chorus for regulation of the sector, which has gained from a major tailwind since the onset of Covid-19 in India with students signing up for online courses in huge numbers.

Karti Chidambaram, Member of Parliament for Sivaganga in the Lok Sabha pitched for the need to regulate the online education sector in Parliament last month.

Soon after, the government spoke about the need to regulate the sector.

“We are not against their business growth. But there cannot be a monopoly and students can’t be exploited,” minister Pradhan said last week.


Core areas of concern

Industry executives in the know told ET that the EdTech firms are primarily focusing on addressing two core areas --no misleading advertisements and avoiding misleading payment structures—as they seek to assuage government ire. The code is also aimed at ensuring appropriate and ethical sales practices, marketing communication, fair practices on financing, loans and refunds.

“The top companies have held several discussions on these issues following the government’s note. A major area that needs to be addressed is how these online courses are sold and parents should know the full details of it. The new self-regulatory code will aim to address that,” said one person cited above.

“With the sole purpose of improving the delivery of education services, it is now crucial for us to foster and sustain stakeholder trust by safeguarding their interest,” said Mayank Kumar, cofounder and MD of upGrad and cochair of the EdTech committee at IAMAI.


The industry executives are also looking to ensure fair and transparent functioning of a robust grievance redressal mechanism, with escalation to an Independent Grievance Review Board with independent members, sources added.

For instance, consumers have alleged that some education companies have sold certain courses on a monthly renewal basis but the financing or loan arranged for it extends for up to three years.

Amid the surge of Covid19 in the last two years, online education has emerged as a connecting bridge to access flexible and quality education for students as well as working professionals.

upGrad was one of the new EdTech startups to have become a unicorn in 2021. Elsewhere, industry leader Byju’s spent more than $2 billion on acquisitions buying Aakash Institute and Great Learning among others even as it continued its fund-raising spree.In total, EdTech startups saw funding of over $4 billion on 2021 and $2.1 billion in 2020 compared to $393 million in 2019 and $675 million in 2018, according to data from Venture Intelligence.

Divya Gokulnath, cofounder of Byju’s said, “We are completely aligned with the government's principles on safeguarding consumer interests and welcome the creation of guidelines that help students reach their learning goals in a manner that makes them future ready and conceptually strong."

Some of these startups are also actively seeking to hire senior public policy executives in the national capital to liaison with government officials as the sector gains more spotlight.


"We are not against their business growth. But there cannot be a monopoly and students can't be exploited," minister Pradhan said last week.

Industry executives in the know told ET that the edtech firms are primarily focusing on addressing two core areas—no misleading advertisements and avoiding misleading payment structures—as they seek to assuage government ire. The code is also aimed at ensuring appropriate and ethical sales practices, marketing communication, fair practices on financing, loans and refunds.