The Future of EdTech Funding in India
Too Long; Didn't ReadDespite the downturn, EdTech continues to be an attractive investment opportunity for venture capitalists. The sector’s growth prospects remain strong, driven by the increasing adoption of technology and online learning, rising demand for upskilling and reskilling, and the growing number of K-12 and higher education students in the country. According to a report by Blume Ventures, the EdTech market in India is expected to grow at a CAGR of 39% to reach $10.4 billion by 2025. While I doubt they will concur with their report now and are likely to focus on alt sectors, the macro indicators underlying the EdTech investment outbreak in 2021 are still positive.
Dealroom reported a decline in EdTech activity in private and public markets in 2022 compared to the previous year due to several factors, including the pandemic-induced economic slowdown, rising inflation, and tighter regulatory scrutiny. The sector’s growth was partly fueled by the surge in online learning during the pandemic, and as things have started to return to normal, the growth has slowed down. This especially followed suit in India, where most EdTech companies saw themselves either running out of runway or raising down-rounds. The real status, of course, becomes clearer in the L2 divisions of the sector.