Ed-tech start-ups pocket $2.2 bn in funding this year: Report

Indian ed-tech start-ups cornered a chunky $2.2 billion in funding in 2020, led by the K-12 and test preparation segments, according to a report by IVCA-PGA Labs. This is a substantial increase compared with investments worth $553 million that such companies garnered in 2019.

The increasing investor appetite for the sector is not surprising, given that the pandemic led to a significant increase in demand for ed-tech services. Students across the country signed up for such platforms to make up for lost school hours.

Byju’s alone secured over $1 billion from investors this year and is understood to be negotiating another $200 -million deal. In an interview with FE in late September, founder & CEO Byju Raveendran had mentioned that the company added more than 25 million free users in the last five months compared with just above 40 million in the first four-and-a-half years. “Students who benefited by accessing the content signed up for subscription,” the CEO had said.

Unacademy raised over $300 million so far this year across three rounds from investors, including SoftBank, Facebook, Tiger Global Management and General Atlantic. The firm also turned unicorn in September after SoftBank led a $150-million investment in the company. Ed-tech firm Eruditus raised a fresh $113 million while Vedantu bagged $100 million in funding led by US-based Coatue earlier this year.

The K-12 and test preparation segments jointly secured $1.98 billion from investors. The continued learning segment received investments worth $142 million. Investors infused $84 million into the higher education tech category. The pre-K and B2B segments attracted $12 million and $7 million in funding respectively, the report showed.

Experts point out ed-tech is growing on the back of changes in the approach to education and the rapid rise in use of smartphones. The potential of the market is huge. As of FY20, India’s education market stood at $117 billion with 360 million learners. The market is expected to grow at a CAGR of 14% each year to touch $225 billion by FY25.