**Title:** EdTech Companies Shift Focus to B2B Amid AI Demand
**Meta Description:** EdTech firms are pivoting to B2B models, aiming for significant growth as corporations seek to upskill employees for the AI era.
**URL Slug:** edtech-b2b-growth-ai
**Headline:** EdTech Companies Embrace B2B Strategies to Meet AI Skills Demand
In a landscape where traditional consumer models remain popular, many companies are increasingly focusing on building their B2B (business-to-business) segments. This shift is driven by corporations eager to upskill their workforce for the artificial intelligence (AI) era and the growth of global capacity centers (GCCs) in India.
Mumbai-based upGrad, which has historically catered to consumers, anticipates that B2B will account for 30-35% of its business in the coming years, up from the current 20%. Similarly, Simplilearn, with offices in the US, Singapore, and Bengaluru, generates 30% of its revenue from its enterprise segment and aims for a balanced 50:50 split in the next two to three years. Bengaluru’s Scaler, which specializes in software development and data science courses, has recently launched a B2B vertical and expects it to contribute 10-20% of its revenues in its first fiscal year (FY26).
Scaler, traditionally a direct-to-consumer entity, is targeting companies with employee counts between 2,000 and 20,000, particularly those that have established GCCs in India. Co-founder Abhimanyu Saxena noted that many large enterprises outsource their software needs to Indian GCCs, making the training of GCC staff a significant revenue opportunity. Scaler has already secured contracts with several Fortune 500 companies, although specific names were not disclosed. The company reported an operating revenue of ₹384.5 crore for FY24, an increase from ₹316.6 crore in FY23, while also reducing its losses to ₹138.8 crore from ₹330.2 crore the previous year.
According to Amit Nawka, a technology deals partner at PwC India, if edtech companies can secure contracts with GCCs, they could potentially unlock substantial profitability. Meanwhile, upGrad has been strategically enhancing its enterprise solutions through mergers and acquisitions over the past three years. After acquiring Work Better and Centum Learning in 2022, upGrad consolidated its B2B offerings under the upGrad Enterprise brand in April 2024. CEO Srikanth Iyengar emphasized that the B2B segment will facilitate the company’s growth in international markets through partnerships with global organizations. He explained that while consumer programs allow for self-paced learning, enterprise learning is focused on speed and precision, enabling organizations to quickly equip their talent with necessary skills.
In FY24, upGrad achieved ₹1,875 crore in gross revenue, a significant increase from ₹1,530 crore in the previous financial year.
**FAQ Section:**
**Q: Why are EdTech companies shifting towards B2B models?**
A: EdTech companies are pivoting to B2B models to capitalize on the growing demand from corporations seeking to upskill employees for the AI era, as well as to leverage opportunities presented by global capacity centers in India.