Unacademy, Byju’s success lifts fortunes of edtech start-ups
The success of education technology companies such as Byju’s and Unacademy has prompted investors to back emerging startups in the segment.
In February, Byju’s raised $200 million from General Atlantic at a valuation of over $8 billion, while Unacademy secured $110 million from Facebook and General Atlantic at a valuation of over $500 million. GGV Capital, among others, infused $24 million into interactive online tutoring platform Vedantu.
India saw 34 venture capital deals worth $399 million in the edtech space in 2019, according to Venture Intelligence. The top recipients of VC money were Byju’s, Unacademy, Vedantu, Eruditus and MindTickle.
“Byju’s has become a poster boy...and has shown that the model is commercially viable,” said Narayanan Ramaswamy, partner, national lead, education and skilling, KPMG in India.
However, the sector has its own challenges. Between 2014 and 2019, 4,450 edtech startups were launched in India but 1,150 shut shop, shows a report by Inc42 DataLabs.
G.V. Ravishankar, managing director of Sequoia Capital India LLP, which has backed Byju’s, Unacademy and Eruditus said: “Education is a space where Indian parents and students are willing to invest heavily. And, we expect several valuable companies will be built in this sector.”
“Immersive technology can today deliver high quality education for millions of students and professionals, in a manner that is scalable and affordable, and the rapid growth in smartphone penetration and access to low-cost internet have created a massive global education market that is attracting several investors.”
Sarvesh Kanodia, principal, Omidyar Network India, said: “Education is a large market with 260 million children in K-12 and another 35 million in higher education. Estimates suggest that in the K-12 space, almost half of the enrolled students opt for after-school tuitions. There are millions of students preparing for government exams or pursuing skilling courses to get better jobs. Schools and colleges have started investing in technology to improve their own quality. So, there is increasing scope for startups to coexist and succeed in the sector.” Omidyar has backed companies such as Doubtnut, Vedantu and Whitehat Jr.