Edtech's focus on profits, new niches sparks renewed investor optimism

Early-stage funding more than tripled to $303.2 million this year, from $100.7 million in 2023

- Mansi Verma

Even as the Byju's saga continues to unfold in courts, the rest of the edtech sector has moved on. Existing players have used the past fiscal to recalibrate growth strategies—shutting down unprofitable verticals and doubling down in profitable niches. In short, the Indian edtech sector went through an overhaul in 2024, with the next few years expected to throw up newer winners.

"There was the crazy pop (in 2021) and then there was the Byju's period. Now we're just seeing companies with their heads down, executing, driving to profitable growth. That is now the mantra," Deborah Quazzo, managing partner of edtech-focused investor GSV Ventures, told Mint.

As a result, investors have started reconsidering edtech investments. According to data from analytics firm Tracxn, the sector's total funding surged from $245.8 million in 2023 to $608.9 million in 2024.

Early-stage funding more than tripled, growing to $303.2 million this year, from $100.7 million in 2023. Similarly, late-stage funding surged nearly threefold, rising from $95.5 million to $263.3 million. Volumes went up as well. The number of early-stage rounds rose from 15 to 20 and late-stage from 6 to 10.

This follows over two tough years for edtech, marked by waning investor confidence due to declining post-pandemic demand for online learning, a shift to profitability, and the collapse of Byju's. Funding plummeted from its $4 billion peak in 2021.