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Why are investors queuing up for edtech in India

  • October 28 2021
  • 5 mins

Why are investors queuing up for edtech in India

Indian startups claim to have raised $11-12 Bn funding in 2020 across 924 deals. However, the dark horse was ed-tech with a 225 % rise in funding than in the previous year. With the traditional offline education system shutting down during covid, 2020-21 is working out to be a big bang year for the ed-tech sector.

According to estimates, ed-tech startups raised more than $1.5 Bn across 100+ deals between the last 12-18 months, witnessing a whopping 225 % rise compared to the previous year. A year ago, many investors did not consider edtech in the top 5 investment sectors despite many startups available for consideration. Due to the new normal and china education system being revamped, the Indian ed-tech ecosystem has become a place for investors to queue up.

In the covid situation, most of the VC firms gathered around the big ed-tech firms for investment. With the addressable market growing phenomenally, paid subscribers and revenue of edtech ventures rose quickly. As per reports, since the lockdown was announced in March last year, BYJU’S added 33 Mn users (cumulative user base 75 Mn), and Unacademy’s user base grew to 40 Mn. It seems India has around 6000 registered edtech startups, and the number will rise exponentially due to the investor’s interest. The current time is a golden period for the ed-tech ventures; however, one needs to see what happens when offline learning returns. 

From Byju’s to Eruditus — now India has four ed-tech unicorns, thanks to a colossal fund flowing in since 2020, and it’s expected to continue for a time to come. India has already seen three ventures turn unicorn and one into a decacorn in the last two years. Analysts estimate that Teachmint, Classplus, Quizziz could enter the unicorn club in the next 6-12 months. India’s ed-tech sector is expected to keep gaining investor confidence, especially after China’s latest regulation has ordered all school curriculum and live tutoring ed-tech startups to go non-profit, which creates a big tutoring gap that Indian ed-tech startups can fulfill.

Indian ed-tech companies can soon claim to be the ‘tutor of the world’, with most of them expanding in global ecosystems. With a solid English-speaking population and tutors backed by access to capital and seasoned investors, the Indian ed-tech ecosystem is here to stay, scale and succeed.

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