Edtech startups attracted over USD 2.22 billion funding in 2020: Report
Indian edtech startups received a total investment of USD 2.22 billion in 2020 as compared to USD 553 million in 2019, reflecting the confidence of investors in the segment that has seen a huge surge amid the pandemic, a report by IVCA-PGA Labs said on Thursday.
The report, titled ‘The Great ‘Un-Lockdown’: Indian EdTech’, noted that Indian online education companies have raised USD 4 billion in the last five years (2016-2020) with companies like Byju’s, Unacademy and Vedantu accounting for the highest share.
In 2020, 92 players received funding, out of which 61 players received seed funding, the report by Indian Private Equity and Venture Capital Association (IVCA) and PGA Labs, said.
“Indian edtech startups received a total investment of USD 2.22 billion in 2020 alone, compared to USD 553 million in 2019. K-12 and Test Preparation companies accounted for the largest share (USD 1.98 billion), followed by Continued Learning (USD 142 million), Higher Education (USD 84 million), Pre-K (USD 12 million) and B2B Edtech companies (USD 7 million),” it said.
The report highlighted that Byju’s raised the most capital in the last five years at USD 2.32 billion (latest valuation at USD 12 billion), followed by Unacademy at USD 354 million (valuation at USD 2 billion).
It estimates the education market in India to be worth USD 117 billion with about 360 million learners in FY20. Of this, about USD 49 billion is spent on school education and USD 42 billion on supplementary education (private coaching and test preparation).
The education market is expected to grow 2x to USD 225 billion by FY25 at 14 per cent CAGR over FY20-25, it added.
“EdTech is one sector which goes in sync with the Moore’s Law, with the advancing tech, Education Technologies in India have become a change maker...EdTech in India has emerged a clear winner, this report also projects how new unicorns are being presented globally, putting India yet again on the globe in regards to tech, innovation and digital consumption,” IVCA President Rajat Tandon said.
Madhur Singhal, Practice Leader, Education, Employment and Entrepreneurship at Praxis Global Alliance, said large shifts in learner requirements is reshaping the education and EdTech landscape globally.
“With an increase in focus on self-paced learning, an informed selection of tools/aids on top of better awareness and accessibility, and the idea of continuous learning beyond schools and colleges via professional education courses is driving innovations in the way learning content is being consumed and delivered in India,” he added.
Vaibhav Tamrakar, Vice President at PGA Labs, said digitisation of educational institutions and learning ecosystem, continuous learning for employability and professional career growth, and student-lifecycle services such as student housing and Fintech in education are some of the whitespaces where the next EdTech unicorn can emerge from India in the next decade.
The report noted that the education sector has received growing attention from the government with budgetary allocation increasing from USD 11.3 billion in 2018-19 to USD 13.2 billion in 2020-21.
Lockdown imposed due to the spread of Covid-19 has increased the demand for EdTech products in India manifold, it added.
In response to the growing demand, EdTech players have scaled up their offerings and new players with innovative business models catering to unserved segments have emerged post-Covid-19, it said.
Also, the recently introduced National Education Policy 2020 is expected to give a fillip to EdTech (both, in the classroom and outside the classroom) due to increased focus on concept-based learning for students, the report added.