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India’s edtech sector continues to see the impact of the funding winter, with the year-to-date (January-August) fundraising at $215 million, a drop of 30 per cent from the same period last year. In 2023, January-August saw a total fundraising of $307 million, according to the Tracxn Feed Geo Report: Edtech India 2024.
The Indian edtech ecosystem, with approximately 11,000 active companies, ranks as the third highest-funded globally in terms of total investment to date.
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The only silver lining for the sector is that the first-half fundraising of 2024 is better than 2023. The Indian edtech sector has witnessed $164 million in funding in H1 2024, a 96 per cent increase compared to the $81.9 million raised in H2 2023.
The sector is struggling due to macroeconomic conditions and a shift back to traditional learning as schools reopen. However, there is still strong demand for innovative online courses and professional upskilling programmes, particularly in areas where offline education falls short, offering some hope for continued growth.
According to the report, the Indian edtech sector reported the highest-funded quarter in Q3 2021 with an overall funding of $2.48 billion.
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Neha Singh, co-founder of Tracxn, said, "The funding levels are still below the highs of 2021, but 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."
The Indian edtech space has seen 24 funding rounds exceeding $100 million, but only four of these have occurred since the beginning of 2022. So far in 2024, there has been just one $100 million round. Despite the post-pandemic shift back to traditional learning methods, companies like Avanse, an online lending platform, secured $120 million in funding, and Lawsikho successfully went public in 2024. These developments highlight the potential for growth in niche areas within the broader edtech sector, said the report.
The majority of funding in this space has been seen in late-stage rounds, with a funding peak in 2021 and a sharp decline in 2023, dropping 94 per cent from 2021 and 88 per cent from 2022, with $187 million raised. In 2024 YTD, $166 million has been raised in late-stage rounds. Similarly, early-stage investments also peaked in 2021 and have steadily declined, with 2023 witnessing $96.4 million raised, an 85 per cent drop from 2022's $654 million.
So far, in 2024, early-stage funding totals $40.4 million. Seed-stage funding in India peaked in 2021 at $175 million but has since declined significantly. Funding for seed-stage rounds dropped to $8.5 million in 2024 YTD, marking a 76 per cent decrease from the $156 million raised in 2022.
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