Growth in demand for online education in IT specialties began to slow down

The volume of the online education market in the first quarter of 2023 grew by 23%, the quarterly revenue of the largest specialized companies exceeded 25 billion rubles. However, its largest area, additional vocational education, grew by only 21%, while a year earlier the growth was 27%. Market participants note that the trend was influenced by the decline in the wave of demand for courses in IT specialties, which are no longer perceived by candidates as a guarantee of social guarantees, and by employers as a source of qualified personnel.

According to the results of the first quarter of 2023, the total revenue of the top 100 largest EdTech companies in Russia grew by 23% year-on-year and amounted to about 25.5 billion rubles, calculated by the Smart Ranking agency. The largest segment of the market – additional vocational education (FPE, share 33.6%) – grew by 21.2%. The growth of the segment slowed down: in the first quarter of 2022, it was 27%.

One of the reasons for the slowdown in the growth of FVE may be a decline in demand for training in IT specialties, according to Smart Ranking. Last year, there was a stable demand for training in IT professions, recalls Nikita Starun, director of strategic marketing at Skillfactory. Interest, according to him, was fueled by the topics of state benefits for IT specialists and the prospects for stable work and earnings that were constantly circulating in the public field.

By now the situation has changed. The topic of obtaining armor from mobilization has lost its relevance. And with the employment of graduates of online courses, everything was not so rosy. “The demand for courses in IT specialties has begun to decline, among other things, because the market now needs mid-level and above specialists, and now there are too many junior specialists who are trained by online courses, and they are no longer in demand,” explained representative of Smart Ranking. (About a similar personnel situation in the radio-electronic industry, which, however, has become the result of the latest trends not in online, but in secondary specialized education, Kommersant wrote on May 16.)

However, the IT-direction of FPE was not the only one, the demand for which is falling. “For example, demand for courses in programming, analytics, business and management decreased in March,” says Marianna Snigireva, CEO of the Netology educational platform. But in the areas of training in design and marketing, she says, the demand in March compared to previous months, on the contrary, increased. Sergey Popkov, co-founder and business development director of Skillbox, notes: “There is an increased demand for the Film and Music direction (+43% year-on-year), including due to the professions “producer of musical projects” (+57%), “director editing” (+18%)”.

The redistribution of demand leaves hope for market participants for the overall growth of the APE segment at the end of the year. Ultimate Education President Pavel Moseikin predicts that it could reach 25-30%.

In general, the online education market is developing, but is experiencing a period of lack of investment. Now investments in EdTech have not recovered after 2022, the venture capital market is on the verge of a recession, says Daria Ryzhkova, co-founder of the Smart Ranking agency: “Recovery will not begin until the second half of the year.” The driver of market growth could be a drop in interest rates on loans and installments, as well as the absorption of smaller players by large players, says Georgy Babayan, founder and head of the Elbrus Butcamp programming school. Smart Ranking predicts that the growth of the online education market in 2023 will be 20–25%, exceeding RUB 100 billion.

Julia Yurasova