Over 14 startups have raised funding since March 2020, as ed tech firms witnessed a massive boom in India post Covid.
Out of the 14 startups, at least 9 have raised seed funding, which means investors are willing to bet on early stage startups that can prove their worth during the coronavirus pandemic. Even in a challenging environment, Edtech is expected to remain a very hot sector of VC investment, said a KPMG report.
However, even before March, Byju’s raised $400 million and Unacademy raised $100 million in a round led by Facebook.
BYJU’S CONTINUING HOT STREAK
“The ‘Classrooms of Tomorrow’ will have technology at the core, empowering students to cross over from passive to active learning.” – Byju Raveendran, founder and CEO, Byju’s, said.
GROWING NUMBERS OF ED TECH FIRMS
As much as a month before the coronavirus lockdown was announced, schools and colleges across India were already shut as a precautionary measure to stop the virus from spreading. As the date for reopening kept getting extended, educational institutions in India realised they needed to switch their models of teaching to continue the education and so, they went online.Edtech startups are seeing their numbers grow by the minute. In March alone, Byju’s saw 6 million new students access free lessons on its platform. On the other hand, Unacademy recorded 1 billion watch minutes. Another edtech app Toppr saw 100% growth in free user engagement in March.
Another startup Lido, which raised funds in March, was looking to hire over 500 tutors across the country as it was doubling down during the edtech boom.
“The COVID-19 pandemic has enabled new opportunities for the edtech market in India. Besides formal education, the extracurricular segment (worth $10 billion) is also projected to experience a meteoric rise in the number of users, buoyed by the offline to online shift,” said Gaurav Jain, Co-Founder and Investor, Venture Catalysts, who has invested in the startup Qin1. The startup Qin1 is focused on providing extracurricular activities to children via a digital platform.
PROFIT MAKING NOT THE ONLY MOTIVE: FOUNDER, EduBRISK
“Many investors are coming with a profit motive but many others are coming forward to create an impact. That is to make education more equitable,” said Saiju Aravind. Aravind is the founder of Kochi-based online education platform EduBrisk. He added that his firm is supported by “investors wanting to make education affordable and provide quality education to people in general”.
ED TECH FIRMS: BUSINESS RIVALRY NEWS ALSO DOING ROUNDS
According to those tracking the segment, last year, Byju’s acquired US-based learning platform Osmo for $120 million as a part of its plan to expand globally. This was followed by the biggest deal in the Indian sector. This was Byju’s acquiring online coding platform WhiteHatJr for $300 million. Byju’s rival Unacademy has also picked up smaller start-ups. It includes PrepLadder, Kreatryx, CodeChef and Mastree.Additionally, Unacademy is one of the official partners of IPL. Byju’s was also said to be in the race for the title sponsorship. As of now though, Byju’s sponsors the pre-match and post-match shows.
EDTECH SECTOR BECOMING INVESTOR’S FAVOURITE
Venture Intelligence data shows that during January to July 2020, investors infused $998 million in 31 deals. The total number of deals reported in 2019 was 42 worth $404 million.
Tiger Global and General Atlantic invested $300 million and $200 million in January and February 2020, respectively.
The other top VC investments in the sector include Steadview Capital, Blume Ventures, Nexus Venture Partners, Sequoia Capital India. The list continues with General Atlantic’s investment of $110 million in Unacademy followed by GGV Capital, Coatue Management, WestBridge, Omidyar Network, Tiger Global $100 million in Vedantu.
Vedantu’s total fundraise crossed $200 million and the company’s valuation stood at $600 million. This made it second most valued Edtech company in India after Byju.
The third top deal was Foundation Holdings, Kaizen PE, Others investment of $47 million in Toppr.
The increase in investments comes on the backdrop of massive boost in online education since lockdown.
India’s education sector received $3.29 billion as foreign direct investment (FDI) between April 2000-June 2020. Of this, $2.12 billion was raised between June 2015-June 2020.
The government, too has recognised the opportunity. In the Budget speech for 2020-21, Finance Minister Nirmala Sitharaman had proposed up a setting. It was a “degree level full-fledged online education programme”.