Investment in the Edtech Sector Continue to Soar

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Indian ed-tech startups raised USD 4.7 billion in 2021, up from USD 2.2 billion in 2020. This made ed-tech space the third most funded Indian start-up category, only behind e-commerce at USD 10.7 billion and fintech at $8 billion.

VC-backed companies in the education space raised more than $20 billion last year, up from around USD 14.6 billion in 2020, per Crunchbase data. The sector also saw a number of high-profile companies exit to the public markets, with companies including Coursera, Udemy and Duolingo doing initial public offerings.

Now, the space is primed for investment across the board, according to Amit Patel of education-focused investment firm Owl Ventures. A shift is underway in India’s education landscape: online learning was once shunned but is now the top priority for all education stakeholders.

Tom Singlehurst, Global Head of Education Research at Citi, commented that the ”increasing interest in Edtech as a significant opportunity for VCs mirrors growing interest in education from public market investors. This interest incorporates not only an appetite for an area which exhibits strong underlying growth on the back of digitisation/technology adoption but also, importantly, a growing need for public market investors to find areas where their capital can also effect broader societal change. Edtech fits the bill on both counts.”

The backdrop is one of the largest education industries in the world, featuring 360 million learners as of this year according to PGA Labs. The majority of these are in the K-12 segment, while the rest are spread across pre-school, college and corporate education. Historically, regulations in this mammoth sector have been stacked up against online education, for security and legitimacy concerns.

The foundation for the edtech funding boom was laid years ago. With more investment in technology infrastructure for schools over the past decade, edtech companies can now scale, he said. 

Some of those investments in infrastructure include government investment in connectivity and devices for schools, such as broadband internet, tablets and mobile connectivity. And more connected students with devices means more customers. 



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