Why edtech is getting so little love from VCs in India

Despite the media hype, the edtech space in India isn't receiving enough VC funding, finds Tech in Asia

“India is the only country in the world which is trying to become a global economic power with an uneducated and unhealthy labor force,” says Amartya Sen in a recent discussion at the London School of Economics. The Nobel laureate and author of The Argumentative Indian is in the habit of bringing up inconvenient truths and this was one of them.

Professor Sen’s ironical point was that it couldn’t be done. India can’t sustain economic growth without improving the quality of its workers.
 

The media is full of stories about how edtech is transforming education in India, and how edtech start-ups are “raising millions to provide millions with world-class education.” The reality is sobering. Edtech, despite its great need and potential in India, isn’t setting the venture capital scene on fire.
 

According to venture capital analytics firm Tracxn, Indian edtech start-ups have raised $66 million in funding disclosed so far this year, which is nearly two-and-a-half times the $27 million invested in 2014. But it is still less than 1% of the total funding for Indian tech start-ups which has already crossed $7 billion this year. Besides, the top three funded edtech start-ups accounted for $40 million out of the $66 million invested in the domain – and only eight edtech start-ups had funding rounds of $2 million or more.
 

To put the Indian edtech scene into perspective, learning tech companies globally got $3.8 billion in funding in the first three quarters of this year, according to a white paper from Ambient Insight. In other words, India’s share of the global edtech investment pie is less than 2%.

This is an excerpt from Tech in Asia. You can read the full article here.