Education-technology or edtech companies have mastered the art of wooing investors. The numbers are telling. In less than three months into the new year, edtech ventures have garnered a whopping $686.32 million in 21 funding rounds, a steep surge from $450 million in 87 rounds in the entire 2019, according to data from analytics firm Tracxn.
The data reveals that Bengaluru-based companies attracted the lion’s share (approximately $944 million) of investments in the edtech space in the last one year, the highest across cities in India.
According to data Fortune India has collected, Mumbai-based startups were next in line: raising $109.3 million during the same period. Startups based in Gurugram raised a total of $33.19 million, coming in third. The data includes funding rounds between January 1, 2019, and February 29, 2020.
This year alone, Bengaluru-headquartered Byju’s raised about $500 million, says Tracxn, at an estimated valuation of close to $8 billion. Last month, smaller crosstown rival Unacademy raised $110 million in a funding round led by Facebook and General Atlantic. At the same time, Bengaluru-based interactive online tutoring platform Vedantu raised $24 million, led by global venture capital firm GGV Capital.
Can this buoyancy be sustained?
In the last few years, edtech companies have ramped up their interactive online tutoring content, targeting school students and candidates preparing for competitive examinations and government jobs across metros and tier 2 cities.
RedSeer Consulting, a research and advisory firm focussed on the consumer internet market, noted in its last year’s report that the first wave of edtech companies saw players focussing on high-quality content and live streaming, most often catering to metro/tier 1 users and in English as the major medium of instruction.
“However, our research on learners across market segments (K12, test prep, professional learning) clearly shows a strong need for vernacular education—something which most offline and online platforms fail to provide adequately as of now. Thus, there is a strong underlying need for digital education in vernacular languages,” the RedSeer report said.
Players such as Gurugram-based Doubtnut target students in smaller cities providing learning content in vernacular languages. In January, Doubtnut raised $15 million in a Series A funding round, led by Chinese investor Tencent. Existing investors Omidyar Network India, AET, Japan, Cure.fit co-founder Ankit Nagori, and Sequoia Capital India also participated in the funding round.
Online learning platform Adda247—which provides live video classes, on-demand video courses, mock tests and test prep focussing on examinations for government jobs—also caters to the vernacular segments, particularly the Hindi-speaking belt.
“Across the K12 and professional learning space, players with video lectures have been tailoring to blend English and Hindi in their delivery to drive customer engagement,” RedSeer said.
Other funding announcements this year for edtech startups include Testbook, which in January raised about $8.3 million in a Series B round led by venture capital fund Iron Pillar. The Mumbai-based online preparatory platform provides learning content and test prep for competitive government examinations. Noida-based edtech startup Classplus raised $2.5 million in a pre-Series A funding round from Blume Ventures, Sequoia Capital and others.
With funding available across the various stages of growth, only time will tell if edtech companies can maintain the momentum for the rest of the year.