Investors continue to make a rush for India’s growing league of edtech start-ups. According to data sourced from market research firm Venture Intelligence, firms operating in the space raised close to $4 billion in funding so far this year, surpassing last year’s total investment worth $2.21 billion. Analysts are betting on the space and do not expect the funding frenzy to slow down anytime soon. While the fund flow for established companies remains intact, the market is maturing and accommodating a bunch of emerging edtech platforms offering niche services, says Amit Nawka, partner (deals) and start-ups leader at PwC India.
Consider Bengaluru-based Teachmint for instance, which managed to bag over $100 million in total funding from investors within 16 months of launch. “Last year, the funding momentum was largely driven by big firms. But now the scenario has changed and investors are not shying away from backing new business models,” says Nawka.
The local edtech market was worth nearly $3 billion in 2020 and is projected to grow to around $10 billion by 2025.
There is no denying that Covid has been a tailwind for the sector. The pandemic has made digitisation of education a necessity, and industry experts believe a system of blended learning will persist even post Covid. Online learning offers students the flexibility to pursue a mix of courses at the same time. Unlike the West, institutional learning in India is bound by the relative rigidity of the curriculum. The cost of providing diversity of courses is high in the country. But, a student pursuing a bachelors in business studies can today subscribe to edtech platforms to take up additional courses like history or foreign language, says P.N. Sudarshan, partner, Deloitte.
“So far, digital learning was restricted to test preparation or upskilling. But now it is no more preparatory in nature. It supplements classroom learning,” adds Sudarshan. There is enough headroom for the market to grow. Higher education, for instance, has hardly been digitised, he says.
Edtech start-ups have significantly expanded the choice of subjects for learners and have made the process of learning more interactive. Also, many firms have partnered with leading Indian and global universities, broadening the scope for students. About 41% of India’s 1.3 billion population consists of individuals below the age of 18 years. Analysts estimate the total number of K–12 and higher education students to increase to nearly 320–325 million by 2025 from about 310 million in 2020.
PwC’s Nawka says the edtech space is booming with opportunities as both parents and students are now open to the idea of digital learning. “Even as schools reopen, students will use edtech services to learn new subjects like public speaking or creative writing.” Besides, edtech has been able to solve the problem of access to high-quality learning. Tier-II and III cities have historically had a dearth of good-quality teachers, prompting students to travel to big metros to sign up for classes.
Be it market leader Byju’s or Classplus which is helping educators take their offline institutes online, edtech firms are seeing a flurry of activities. Earlier this year, Eruditus and upGrad entered the coveted unicorn club.