Ed-Tech in 2024: Only for Profit and Misuse, or There is Hope?

September 17, 2024 — during an event, I reached out to some fresh college students about their studies and career plans, and what they thought about AI in education and how ed-tech was impacting their studies.

While there was a lot of positivity about AI in education & learning, the ed-tech business that focused on "offering" online study help seems to have fallen apart in both value and confidence. Over the years, the trend has clearly been suggesting that the ed-tech sector is facing a profit paradox. But how and why did this happen?

I’ve been watching ed-tech grow and evolve for years. From its early, idealistic roots to the powerhouse industry it is today, I've always believed in the potential of educational technology to democratize learning.

We all hoped it would bridge gaps, make high-quality education more accessible, and provide tools that could reach students everywhere. But as I’ve seen up close, there’s been a troubling shift over the past decade.

For many in the industry, profit has overshadowed the mission of true learning. And as a result, students are being left behind, often treated as data points or, worse, as commodities to be traded and profited from. It’s an uncomfortable reality for anyone who’s watched ed-tech’s journey—and one I think we need to confront head-on.

After a lot of ponder, I decided to share two bits on this topic. Here I will share the real impact of this profit-driven focus on students and educators alike.

I’ll break down what’s going wrong with ed-tech, what’s at stake, and how the industry can pivot back to its original promise.

Profit Over Pedagogy

How did we even get there?

Education is a business. No doubt. But it is supposed to be non-profit making. And even though if you are making profit, you must be giving the value for money you are charging for.

Ed-tech, too, started with the right goals: expand access, reduce costs, and bring quality content to students around the world. But as investment dollars poured in from venture capitalists and private equity firms, I saw how quickly those goals shifted.

Around 2015, I began noticing that more and more ed-tech companies were prioritizing growth and profit over educational impact.

The pressure to scale and increase revenue led many of these companies to adopt business practices that, frankly, go against the core principles of education.

Take, for example, the rise of subscription-based learning tools.

Initially, these tools were billed as affordable alternatives to traditional resources, but they quickly turned into profit machines, charging students every step of the way. Suddenly, education was becoming more like a premium service, where only those who could pay more got access to the full experience.

It’s disheartening to see how the industry has moved from its mission to expand access to one that prioritizes exclusivity.

A Marketplace of Upsells, Data Sales, and Lowered Standards

The immediate fallout from this profit-first approach is visible—and concerning. In the short term, students face a series of obstacles that make learning more difficult and costly. Here are a few of the key ways I’ve seen profit motives compromise educational quality:

1. Tiered Access Models

One of the most noticeable trends is the tiered access model. It’s frustrating to see how many ed-tech platforms now limit basic learning tools to free users and reserve the essential features—like personalized feedback, interactive content, or practice exams—for those who pay. Education, which is supposed to be a right, is becoming stratified. It’s a tiered experience where students are left with incomplete learning resources if they can’t afford the premium packages. This freemium model is less about expanding access and more about creating a paywall.

2. Data as the New Product

Ed-tech companies are following a path similar to social media, treating students as data sources rather than learners. This has become particularly troubling as companies increasingly rely on data collection to boost revenue. I’ve seen firsthand how companies collect and analyze students’ personal data—learning habits, behavioral patterns, and even emotional responses—to target them with tailored upsells. Chegg, a company many students rely on, faced harsh criticism when it suffered multiple data breaches that exposed the personal information of millions. It’s disturbing to see that instead of creating a safe and enriching learning environment, these platforms have turned students into data points for profit.

3. Quality Takes a Back Seat

Then there’s the issue of quality. Companies are making cuts that sacrifice the educational value they provide. Algorithms and automated feedback systems, while convenient, cannot replace the depth and nuance of a real teacher. I’ve noticed that many popular platforms are now focusing on flashy engagement metrics instead of genuine learning outcomes. In language learning apps, for instance, gamified features encourage regular use but not necessarily real improvement in language skills. This obsession with engagement for engagement’s sake has made education feel less authentic and more like a tech product.

4. Manipulative Sales Tactics

The use of emotionally charged, often competitive, sales tactics to pressure parents and students into buying courses or upgrading to premium services have been really degrading experience to know of. These tactics aren’t just aggressive; they’re designed to make families feel like they’re missing out on critical educational advantages if they don’t buy in.

Sales representatives often frame these courses as essential tools for a student’s success, using phrases like “falling behind” or “keeping up with top performers.”

The underlying message? Without these courses, students risk being left out of the academic or career race.

I've also read about instances where sales teams target parents' natural anxieties, emphasizing how these products can "guarantee a brighter future" or "help secure top college admissions." It’s a calculated move to play on both students' desire to excel and parents’ desire to provide the best possible future for their kids.

This kind of emotional and competitive manipulation not only creates unnecessary pressure but also skews the true value of education, reducing it to a race rather than a journey. It turns what should be a supportive industry into a high-stakes marketplace, pushing parents and students toward decisions driven more by fear and FOMO than by actual educational need.

Scandals, Frauds and Ethical Breaches

If you think this sounds bad, let me share a few recent examples that underscore just how serious these issues have become. These scandals reveal the extent to which some ed-tech players are willing to compromise ethics for profit.

Byju’s Financial and Governance Turmoil

Byju's was one of my clients and a name that everyone trusted. But it is now also a prime example of a company caught in greed and ambition.

Once valued as a top ed-tech player in India, Byju’s has recently faced a series of scandals related to financial mismanagement. I’ve watched this unfold, and it’s been shocking. Major investors, including the Chan Zuckerberg Foundation, are now calling for founder Byju Raveendran’s removal due to governance issues. Byju’s rapid expansion was fueled by external investments, and this saga shows how quickly things can fall apart when profit outpaces purpose. All they now have are loans, ligitations and curses of victim parents to whom they sold inferior products.

Chegg’s Data Security Breaches

Again, another of my clients (sorry!), Chegg, which is another major player in the ed-tech field known for its textbook rentals and study tools.

The FTC revealed that Chegg has repeatedly failed to secure students' personal data. I’ve read the FTC’s findings, and it’s clear that Chegg’s approach to data security has been lax at best, negligent at worst. This wasn’t just an oversight—it’s part of a larger trend where student data is treated casually. It’s alarming to think that a platform designed to support students has instead put them at risk.

Edmodo’s Unauthorized Use of Children’s Data

Edmodo is another troubling example. This platform, marketed as a safe space for younger learners, was recently found in violation of COPPA. The FTC reported that Edmodo collected data on children without parental consent—a clear breach of trust and legality. It’s disappointing to see a platform that parents rely on for safety and educational support instead manipulating that trust for profit.

Unacademy’s Financial Decisions and Questionable Spending

Unacademy, the wannabe academic replacements to schools at bare-minimum cost, is another major player in India’s booming ed-tech market.

It has attracted attention not just for its growth but also for its financial and operational choices, sparking debate over whether it’s prioritizing education or profit.

In recent years, Unacademy has poured significant funds into marketing strategies more commonly seen in consumer brands rather than educational institutions.

The company spent heavily on celebrity endorsements, including signing cricket legend MS Dhoni as a brand ambassador, and has sponsored high-profile sports events. Critics argue that such moves do little to support students and suggest that funds could have been better invested in enhancing educational resources.

Furthermore, Unacademy has aggressively acquired several educational platforms and companies, including WiFiStudy, PrepLadder, and CodeChef. While these acquisitions expanded its market reach, they’ve also raised questions about whether Unacademy is staying focused on its core mission of education or simply aiming to grow its market share.

AI Integration and Ethical Concerns

The rise of AI in ed-tech comes with its own set of ethical questions. I’ve seen how powerful AI can be in tailoring learning experiences, but without strict oversight, the risks are high. Privacy concerns, data misuse, and biased algorithms all pose threats to students. The industry must tread carefully here, because if used irresponsibly, AI could cause more harm than good.

Unchecked Profit Model

So where does this leave us? If we don’t course-correct, the future of ed-tech is bleak. The profit-driven model we’re seeing today could lead to systemic consequences that undermine education as we know it.

1. Widening Inequality in Access: We’re already seeing how tiered access widens the gap between students who can afford premium services and those who can’t. This model undermines the promise of equal opportunity that ed-tech was supposed to fulfill.
2. Loss of Trust: Each new scandal damages public trust. As someone deeply invested in this field, I worry about the long-term impact of these breaches of trust. Parents and students are already skeptical, and without corrective action, they may turn away from ed-tech altogether.
3. Self-Sabotage: There’s a real risk that students will simply look for alternatives. Free and open-source learning tools are gaining traction, and they often prioritize quality over revenue. If the big players don’t address these issues, they may find themselves outpaced by competitors who put learning first.

Let's Fix Ed-Tech

I still believe in the potential of ed-tech. But we need to change course, and fast. Here are some of the ways I believe we can bring ed-tech back to its core purpose:

• Transparent Pricing Models: Ed-tech companies need to stop with the paywalls and hidden fees. It’s time for fair, honest pricing that makes quality education accessible to everyone.
• Ethical Data Policies: Protecting student data should be a top priority. Companies need robust security measures and strict adherence to data privacy regulations to earn back public trust.
• Focus on Quality: We need to get back to creating real educational value. The flashy engagement metrics don’t mean much if students aren’t learning. Companies need to reinvest in quality content and real pedagogical support.

For me, ed-tech has always been about one thing: making high-quality education accessible to all. I know the industry can do better, and I believe it’s possible to balance profit with purpose. But we have to remember that students are more than just users or data points—they’re learners. And it’s our job to make sure they get the education they deserve.