 "Over 2,000 startups in edtech sector shut shop in past five years")
India's once-thriving edtech sector is witnessing a significant downturn with 2,148 startups having shut operations in the past five years, according to data shared by Traxcn exclusively with Business Standard.
Edtech platforms, which witnessed unprecedented growth during the pandemic-induced lockdown, continue to face funding slowdown, shifting market needs, and operational challenges post-pandemic.
Based on the data from equity funding rounds, edtech startups collected $0.64 billion in 2024. This is significantly less than its high of $3.6 billion in 2021. Interestingly, the count of deadpooled companies was the highest in 2021, at 933.
Stating that adaptability and innovation remain key drivers of success in the edtech landscape, Ravi Kaklasaria, chief executive officer (CEO) and co-founder of edForce, a workforce upskilling accelerator, said, “The edtech sector has witnessed a wave of shutdowns as startups relying on classroom training and generic materials struggled to adapt to evolving demands. Many were caught in a burnout race, chasing unsustainable growth without innovating.”
According to the Tracxn Feed Geo Report: EdTech India 2024, at its peak in 2021, the sector raised $4.1 billion in 357 funding rounds.
While 2021 marked the highest-funded year for edtech, the third quarter stood out as the highest-funded quarter, attracting $2.48 billion. A total of 16,028 startups were founded in the country with companies largely located in Bengaluru, Delhi, Mumbai, Hyderabad, and Noida, the report added.
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However, the reopening of physical classrooms, coupled with reduced investor confidence, led to a sharp decline in the sector's fortunes.
Recently, Stoa School, an alternative business education platform, which was backed by Zerodha founder Nithin Kamath, announced its closure. Elevation Capital-backed Bluelearn, an upskilling and job search platform, also ceased operations in 2024.
Other startups that reportedly shut shop include QuizMind, Vedu Academy, and Tribac Blue, among others.
Besides the small players, major ones in the sector have also felt the impact. Byju's, once valued at $22 billion, faced multiple rounds of layoffs, restructuring exercises, debt issues, and legal troubles.
Similarly, as part of its restructuring efforts, Unacademy and upGrad streamlined operations and handed pink slips to several employees.
Going forward, experts predict a consolidation phase, with only innovation-driven, specialised companies likely to thrive.
Lloyd Mathias, an angel investor, said, “The edtech industry will move towards consolidation where large companies with deep pockets will establish/strengthen their online arms offering quality education while adding real-world value.”