India’s edtech sector enters model-led phase as funding falls, listings and acquisitions rise: Tracxn
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India’s edtech sector is moving from a funding-led growth cycle to a more model-led phase, with equity investment declining sharply even as public listings, acquisitions, and offline expansion gain momentum, according to a new report by global market intelligence platform Tracxn.
The report, From Funding-Led to Model-Led: Indian EdTech’s Next Phase, examines funding, company outcomes, exits and business-model shifts across India’s EdTech industry between 2021 and 2026 year-to-date. It found that annual equity funding fell from about $4.3 billion in 2021 to $214 million in the first eight months of 2026.
Despite the decline in overall capital, the median funding round reached a six-year high of $1.1 million in 2026, nearly twice the levels recorded in previous years. The sector has also entered its most active period for public listings and acquisitions, signalling a shift in how EdTech companies are accessing capital and creating value.
Fewer funding rounds, but larger cheques
India’s EdTech funding market has passed through two distinct phases since 2021. Annual funding dropped from $4.3 billion in 2021 to $265 million in 2023, before remaining within a range of $214 million to $622 million through 2026 year-to-date.
Funding has also become increasingly concentrated. BYJU’S alone accounted for 94% of the sector’s total funding in 2023 through a single $250 million round. In 2024, Physics Wallah and Eruditus together accounted for 52% of total sector funding.
The number of funded rounds, meanwhile, declined consistently, from 368 in 2021 to just 36 in the first eight months of 2026. While median round sizes remained relatively stable at between $407,000 and $557,000 from 2021 to 2025, the figure rose to $1.1 million in 2026.
Physics Wallah emerges as standout public-market success
Physics Wallah illustrates the changing dynamics of the sector. Founded in 2020, the company had raised $275 million in cumulative funding— the lowest among India’s six most-funded EdTech companies. Yet it was the only company in that group to complete a public listing, reaching a market capitalisation of $3.6 billion at its November 2025 IPO.
The ownership structures of other major players have evolved differently. Unacademy was acquired by upGrad in an all-stock transaction approved by India’s competition regulator in July 2026. Think & Learn, the parent company of BYJU’S, has remained under insolvency resolution proceedings since July 2024.
EdTech firms increasingly move offline
According to the report, every company covered in its business-model analysis now combines a digital platform with either a physical presence or an institutional partnership.
Physics Wallah expanded its offline footprint to 353 centres across India and the UAE by the end of FY26, compared with 198 a year earlier. Its offline enrolments rose to about 470,000 students.
Unacademy has taken a different approach, converting company-operated offline centres into franchise partnerships as it seeks to control costs and improve profitability.
The renewed focus on physical education is also attracting private capital outside the traditional EdTech funding cycle. Blackstone held a stake in Aakash Educational Services before BYJU’S acquired the test-preparation chain in April 2021, while Bodhi Tree Systems invested in Allen Career Institute in 2022. In July 2026, KKR-backed Lighthouse Learning agreed to acquire Pathways School Gurgaon, highlighting continued private-equity interest in offline education.
Tracxn recorded 94 acquisitions and seven public listings across India’s EdTech sector between 2021 and 2026. Five of the seven listings took place within a five-month period between July and November 2025, with market capitalisations ranging from $10 million to Physics Wallah’s $3.6 billion.
Among acquisitions, Simplilearn’s $250 million sale to Blackstone in July 2021 was the largest disclosed transaction during the period, followed by upGrad’s $218 million acquisition of Unacademy. Three of the five most notable acquisitions involved acquirers that themselves rank among the sector’s six most-funded companies.