India’s EdTech sector is witnessing a resurgence as global demand for upskilling and technological education rises, particularly in the face of AI-driven job transformations. By 2030, nearly a third of the world’s jobs are expected to be reshaped by artificial intelligence and other technological advancements. This trend is fueling the growth of EdTech, especially in India, where a vibrant ecosystem of educational technology providers is gaining momentum.
Recent Major Investments in Indian EdTech
After a challenging period marked by a global funding downturn, India’s EdTech industry is making a comeback with Mumbai-based Eruditus leading the charge. The executive education provider raised $150 million in a Series F round this month, led by TPG Rise Fund, boosting its valuation to $3 billion. Eruditus plans to use the funds to expand globally and invest heavily in AI to enhance its offerings.
upGrad, South Asia’s largest EdTech company, also secured $60 million from Singapore’s sovereign wealth fund, Temasek, at a valuation of $2.25 billion. The company will use the funding to extend its university and corporate upskilling courses across multiple regions, including the UK, US, and India.
Another key player, PhysicsWallah, which caters to K-12 students with a focus on preparing for engineering and medical entrance exams, raised $210 million at a valuation of $2.8 billion. The platform is addressing the demand for high-quality basic education, particularly in northern India.
Growth Opportunities and Challenges for Indian EdTech
India’s EdTech boom, driven initially by the pandemic-induced shift to online learning, faced a downturn when students returned to traditional classrooms. Despite this, the demand for skilled professionals in India’s growing digital economy remains strong, creating an ideal environment for startups to thrive.
Key factors driving EdTech growth in India include:
- A rapidly increasing number of internet users, projected to reach 900 million by next year.
- A young population eager for online content and mobile-first learning solutions.
- Government initiatives aimed at promoting e-learning and digital education.
However, the sector still faces significant challenges, such as:
- Limited internet connectivity in rural areas.
- Cultural resistance to remote learning, especially in favor of traditional education models.
Despite these hurdles, the India Brand Equity Foundation (IBEF) sees a strong opportunity for EdTech to fill the gaps left by under-resourced schools and teacher shortages, particularly in urban areas with smaller populations.
Global EdTech Market and India’s Position
According to Research and Markets, India’s EdTech sector, currently home to around 4,450 startups, could be worth $10.4 billion by next year. Tracxn, an Indian data and market research firm, ranks India as the third-highest funded EdTech ecosystem globally.
While 2021 marked a peak in funding for the sector, with investments reaching $4.73 billion, funding significantly dropped in 2022. The sector only managed to raise $215 million through August 2023. This decline led to increased consolidation, with startups like Adda247 acquiring competitors to strengthen their positions.
Reevaluating Risks in Emerging Markets
Despite concerns about investing in emerging markets, data from the Global Emerging Markets Risk Database (GEMs) challenges these perceptions. GEMs revealed that the risks of lending to non-investment grade borrowers in markets like India are comparable to those in developed countries, with default rates around 3.6%, on par with companies rated B by S&P or Moody’s.
As India’s EdTech sector continues to grow and attract significant investments, it is well-positioned to play a pivotal role in the country’s education and upskilling ecosystem.
