Indian Edtech Sector Sees 96 Per Cent Growth In Funding, Long-Term Outlook Strong

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New Delhi: The Indian edtech sector witnessed $164 million in funding in the January-June period this year, a 96 per cent increase compared to the $81.9 million raised in the same period last year. 

The ecosystem, with approximately 11,000 active companies, ranks as the third highest-funded globally in terms of total investment to date, according to Tracxn, a SaaS-based market intelligence platform.

The domestic edtech space has six unicorns, becoming the second highest globally after the US. According to Neha Singh, Co-founder of Tracxn, the 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, she mentioned.

Despite having over 11,000 active companies, the sector is struggling due to macroeconomic conditions and a shift back to traditional learning as schools reopen.

However, there is still a 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 edtech sector demonstrated significant resilience in the first half of 2024. The sector has seen 24 funding rounds exceeding $100 million, but only four of these have occurred since the beginning of 2022. So far this year, there has been just one, more than $100 million round. The majority of funding in this space has been seen in late-stage rounds.

Bengaluru dominates the edtech space, accounting for over 64 per cent of total funds raised, followed by Delhi and Mumbai. Despite current challenges, the sector benefits from strong demand, technological advances, and supportive policies like the National Education Policy 2020, the report mentioned.

In terms of sub-sectors within edtech, India's Test Prep segment, once a funding hotspot with a total funding of $7 billion, has seen a sharp decline. Blume Ventures, Wellfound, and LetsVenture are the top overall investors.