It's battleground Kota for edtech firm Unacademy and traditional rival Allen

This is a fight where one can’t tell Goliath and David apart. If traditional NEET and IIT coaching institutions have on their side a massive network of brick-and-mortar classes as well as a decades-old reputation, the online newbies have on theirs, technology and institutional funding power. The constant tug-of-war between the two, which has been playing out robustly over the past few years, is now on Ground Kota.

The small city in Rajasthan has, over the years, earned the reputation of being the coaching capital of India, with students trooping over from every nook and corner of the country with a hope to excel in entrance examinations to IITs, NITs and medical colleges. There are various institutions in Kota that cater to these students, with rigorous class and test schedules. 

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The edtech firms have been gnawing into this space, helped amply by the pandemic that clipped the wings of the traditional players. Post pandemic, the dynamics have changed. The traditional players are back in action, with their regular physical classes as well as newly developed online facilities.

To beat the competition, edtech firms have been opening physical classrooms in a move that stumps observers — what’s the point of going online if you’re going to have brick-and-mortar classrooms anyway? The ‘hybrid’ theory doesn’t cut much ice.

What is more intriguing is the move of Unacademy, a leader among the edtech leaders, to open physical classes in Kota, the home ground of the traditional players. This set off a war of words that played out over angry notices and dire warnings about poaching of faculty.

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Unacademy’s plan

Edtech start-ups like Unacademy are struggling to maintain fund flow as the Russia-Ukraine war heats up, compelling them to not only cut down expenses but also look for new investment destinations. Unacademy’s latest valuation stands at $3.4 billion. The company recently sacked 600 employees and teachers to cut down its cash outgo.

Last month, Unacademy declared that it is entering the offline learning arena by starting its own coaching centres, launching one in Kota to start with. The SoftBank-backed unicorn is facing the heat from its No. 1 rival Byju’s, which recently took over Aakash Education for more than a $1 billion to foray into the offline education space.

Kota gameplan

At Kota, Unacademy promises to provide coaching for NEET-UG, JEE Main and Advanced, and foundation courses for classes 9 and 10. The firm has said it’s confident of enrolling at least 15,000 pupils in its first batch across centres in nine cities. Besides Kota, Unacademy plans to open centres in Ahmedabad, Jaipur, Pune, Patna, Lucknow, Chandigarh, Delhi and Bengaluru. Importantly, its centres won’t just operate through physical spaces, but will be a mix of online and offline (hybrid).

To rival established offline players like the Maheshwari Group-led Allen Career Institute, Unacademy says it will have state-of-the-art libraries, multi-functional cafés, well-equipped classrooms etc in multiple-floor buildings.

Meanwhile, Allen has been busy

The traditional players are not taking it lying down. Allen Career Institute, for one, raised Rs 4,500 crore ($600 million) to launch Allen Digital, with a mix of offline and digital learning options.

Anand Maheshwari, the managing director of Allen Digital Pvt Ltd, said the company wants to “achieve scale at a faster rate” while maintaining the quality of teaching. He further said the firm decided to expand into the digital world mainly because teaching options have multiplied manifold but variations in teaching methodologies leave students in a lurch. Allen Digital will try and bridge this gap, media reports quoted him as saying.

War heats up

While the press statements have been factual and polite, the messaging elsewhere has been less so. An internal video message shared by the Allen top bosses with their employees last month clearly warned teachers against leaving the institution and joining Unacademy for big pay packets. The clip has been widely shared on social media.

Media reports quoted Allen co-founder Brajesh Maheshwari as saying the tutors who leave under these circumstances will never be taken back and will be black-listed.

On June 14, Unacademy issued a statement, saying it has recruited some 30 tutors for its newly-launched Kota branch, which includes five teachers formerly associated with Allen.

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The underlying currents of tensions between the two big institutions were visible when the Unacademy statement cleverly mentioned the names of only those educators who had quit Allen.

Brajesh Maheshwari further said in his video message to Allen employees that the institution will give an ‘appropriate’ response to any educational platform that wants to poach its tutors. Accusing the ‘poached’ teachers of being ‘greedy’, he said that Allen has over 11,000 employees, and the departure of one or two would make zero impact. But the tone of the messaging belied the ‘zero impact’ claim.

In response, Unacademy sought police protection for the teachers that left Allen to join its team, said media reports.

It will take the rest of the academic year, and some, for the war to come to a logical conclusion.