Funding for Indian Edtech sector increased by 96%, long-term outlook is positive

During the January-June period of this year, the Indian edtech sector received $164 million in funding, a 96% increase over the $81.9 million raised during the same period previous year. 

According to Tracxn, a SaaS-based market intelligence platform, with almost 11,000 active companies, the ecosystem is the third most funded internationally in terms of total investment to date.

With six unicorns, the domestic edtech market is now the second largest in the world, behind the US. Neha Singh, a co-founder of Tracxn, claims that the industry has demonstrated incredible flexibility in response to shifting market dynamics.

Even if financing levels are still below 2021 highs, the industry's rise in 2024 so far suggests that investors are becoming more interested again, particularly as businesses return to traditional teaching techniques while embracing digital advancements, she said.

Even with over 11,000 businesses in operation, the industry is having trouble because of the macroeconomic climate and the return to traditional education as schools reopen.

There is, however, still a good chance for growth because there is a significant need for creative online courses and professional upskilling programs, especially in fields where offline education is inadequate.

In the first half of 2024, the edtech industry showed notable resiliency, according to the research. Only four of the 24 funding rounds totaling more than $100 million in the sector have taken place since the start of 2022. There has only been one round totaling more than $100 million this year. Most of the money in this field has come from late-stage fundraising rounds.

With over 64% of all funds raised, Bengaluru leads the edtech space, followed by Delhi and Mumbai. The research stated that despite present difficulties, the industry benefits from high demand, technological advancements, and laws that are in its favor, such as the National Education Policy 2020.

India's Test Prep sub-sector, which was previously a $7 billion investment hotspot overall, has suffered a dramatic fall in terms of edtech sub-sectors. The top three overall investors are Blume Ventures, LetsVenture, and Wellfound.