Funding in India’s edtech sector seems to have bottomed out in 2023 as investors put $164 million in the first half of 2024, up by 96 per cent from $81.9 million invested in the second half of 2023, according to a report by market intelligence firm Tracxn on Thursday. Year-to-date funding in the Indian edtech sector stood at $215 million, showing a modest rebound from the $321 million secured by edtech startups in 2023.
However, the sector still has a long gap to cover up as funding in 2023 dropped by 87 per cent from $2.4 billion raised in 2022. Edtech funding had peaked at $4.1 billion in 2021. The sector currently has 11,000 active companies.
Funding in India’s edtech ecosystem plummeted post Covid as educational institutions reopening impacted demand for online learning coupled with the corporate governance issue and financial crisis faced by beleaguered edtech company Byju’s that hit investors’ confidence in the sector.
Speaking on the report, Neha Singh, Co-Founder, Tracxn, said, “The Indian EdTech sector has shown remarkable adaptability in the face of changing market conditions. While the funding levels are still below the highs of 2021, the sector’s growth in 2024 so far indicates a renewed interest from investors, especially as companies transition back to traditional learning methods while incorporating digital innovations.”
Stage-wise, late-stage funding saw $166 million while early-stage saw $40.4 million and seed rounds reported $8.5 million funding so far in the current year.
The report noted that despite the post-pandemic shift back to traditional learning methods, companies like Avanse, an online lending platform, secured $120M in funding this year while Lawsikho successfully went public.
Within edtech, funding in the test prep segment dropped to $8.5 million from $175 million in 2021 while the continued learning segment also saw a drop in investment from $517 million in 2022 to $20 million in the current year so far.
Blume Ventures, Wellfound, and LetsVenture were the top overall edtech investors while IPV, We Founder Circle, and EvolveX have been most active in the past two years in seed rounds.
Early stage segment had Blume Ventures, Alteria Capital, and the Michael & Susan Dell Foundation among top investors while late-stage deals were dominated by Trifecta Capital, Alteria Capital, and Stride Ventures.