India EdTech investments record higher numbers exceeding past decade

EdTech investments

During 2020, many technologies and digital industries witnessed a hailstorm of investments mainly due to the worldwide lockdowns enforced as a result of the novel COVID-19 pandemic.

Thus, it comes as no surprise that EdTech was one of the industries that flew high during hardship-packed year.

India – one of the world’s largest consumer markets with 700 million Internet users – witnessed a sharp spike in EdTech investments throughout the year, collecting almost $2.1 billion compared to $1.7 billion in the entire previous decade, according to a recent study conducted by Mumbai-based e-learning research firm Anand Rathi Advisors Limited (ARAL).

ARAL also highlighted that the industry is on track to reach $12 billion by 2025.

The hike is mainly the result of India’s high population of youthful workforce, socio-economic indicators, rising urbanization, surging Internet users, and increasing amount of unemployment in the country are a few favorable factors which water the seeds of the rapidly evolving Ed-tech industry, the report noted.

An Increase in investor interest in the EdTech segment over the last five year has put the wind in the sails of the country’s e-learning industry. “2020 has seen a higher amount of total investments of USD 2.1 billion in the sector compared to investment of USD 1.7 billion in last 10 years combined,” ARAL said.

The study also highlighted the important effects of the COVID-19 pandemic that pushed the industry forward, since “with lockdowns making offline education ineffective, adopting online modes to continue learning was the next step enabling e-learning to gain a foothold in the long term.”

It is worth mentioning that the industry had merely gathered $553 million in 2019, according to according to Indian Private Equity and Venture Capital Association (IVCA) and PGA Labs data.

IVCA’s study reported that 92 EdTech players received funding during the entirety of 2020, out of which 61 of them received seed funding. “Byju’s and Unacademy raised the most capital, $2.32 billion and $354 million, respectively, while B2B EdTech received a total funding of $31 million in 2017-2020,” IVCA said.

It also estimated that the Indian education market is worth almost $117 billion with around 360 million learners reported in 2019-20. Breaking the sum down, $49 billion is spent on school educations – 66 percent of which spent on primary education, while 27 percent on secondary levels.

In parallel, $42 billion is spent on supplementary education, initially comprised of private coaching, and teaching sessions as well as test preparations.

“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. While these are testing times for so many entrepreneurs globally, EdTech in India has emerged a clear winner,” Rajat Tandon, president of IVCA said.

Private sector investments weren’t the only one who took note of EdTech’s growing popularity, with the Indian government increasing its budget allocation for the online education from $11.3 billion in 2018-19 to $13.2 billion in 2020-21, according to the report.

“Digitization 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,” Vaibhav Tamrakar, vice president of PGA Labs expressed.

EdTech investments in India attracted an increase in PE and VC players as a result of its segmentation and variety of players such as online tutoring and competitive exam preparation platforms.

In response to worldwide lockdowns, EdTech players have scaled up their offerings and innovative business models that cater to many unserved segments, the report highlighted.

“With an increase in focus on self-paced learning, an informed selection of tools/aids on top of better awareness & accessibility, and the idea of continuous learning beyond schools & colleges via professional education courses is driving innovations in the way learning content is being a consumer and delivered in India,” Madhur Singhal, practice leader, Education, Employment and Entrepreneurship, Praxis Global Alliance concluded.