The once unstoppable growth of the Indian edtech industry has faced a continuous slowdown in fund traction. 2023 has been a roller-coaster year with declining deals and funding. Tracxn’s data reveals a significant drop in 2023 to USD 712 Million, compared to USD 2.9 Billion in 2022. The substantial drop in the edtech market has been attributed to decreased demand for online education, ongoing funding constraints, higher interest rates aimed at controlling inflation, and economic uncertainties.
Investor Approach
The number of funding rounds also dwindled, mirroring the overall trend in the startup ecosystem. This decline reflects a cautious approach adopted by investors, prioritising profitability and sustainable growth over unchecked expansion.
“The recent ‘funding winter’ has been a wake-up call, signalling a return to the foundational principles of business: profitability and sustainable growth. Investors and founders alike are learning that while innovation drives progress, it cannot come at the cost of fiscal prudence,” said Anirudh A Damani, Managing Partner, Artha Venture Partners.
Startups in this Report
- Offee – Outcome-based assessment platform that harnesses AI & IoT for exam management.
- YardErp – Customizable All-In-One Education ERP
- Klassroom Edutech – Klassroom Edutech is a hybrid tutoring platform.
- Techmaghi – Edtech platform that assists people in upgrading their abilities through technology.
- MedLern – MedLern is a digital learning solution for hospitals and healthcare professionals.
- OckyPocky – An interactive and personalised language learning app for preschool kids.
- BetterSpace – A mental health technology startup on sexuality, disability and mental health education and consultancy.
- YouVah – YouVah provides real experience to high school kids through training & internships.
- ZuAI – ZuAI is an AI-powered self-study app for Indian students, offering personalized learning, practice questions, and explanations for CBSE, ICSE, and state board curriculums.
- CENTA – An accreditation, job, and development organization for teachers and school leaders.
- The 1% Club – An exclusive members-only community dedicated to assisting the rising middle class in becoming part of the top 1%.
- ATREE – A non-profit organization that engages in implementing environmental and sustainability interventions.
- Airblack – Airblack offers online courses for entrepreneurs, designers, teachers, artists and engineers.
- TestnTrack – TestnTrack is a mobile-based assessment platform for schools, coaching and institutes.
Quick Glimpse at the Q4 2023 Funding
Sub-Sectors Attracting Interest
Despite the funding slowdown, certain edtech sub-sectors continued attracting investor interest. Elearning and Skill and Training are two prominent sectors continuously in the funding traction throughout the year. However, the fourth quarter did not witness a single deal in the education financing sector, which was among the top sectors to gain traction during the first three quarters.
Top-Funded Sectors and Regions
eLearning continues to be among the top-funded sectors, with 50% of deals from the eLearning industry, while Skilling and Training is the most funded sector. Regionally, Karnataka, Maharashtra, and Haryana are the top three funded states.
Total number of deals and amount of funding
The edtech sector raised USD 7.054 Million with 14 deals in the fourth quarter of 2023.
Top segment by the number of deals and funds invested
eLearning with 7 deals and Skilling and Training with USD 5.897 Million.
the region with the highest number of deals and the total sum
Karnataka with 4 deals at USD 1 Million, including 3 deals having undisclosed amounts.
Top 3 deals by value for Q4 2023
- Airblack: $ 3.929 Million
- The 1% Club: $1.19 Million
- CENTA: $1 Million
Future of EdTech
As we embrace continuous learning and readily accessible knowledge, the ed-tech sector is set to become more engaging, flexible, and driven by proactive AI. The penetration of AI in education will enhance productivity and redefine the learning experience. Microlearning will also take centre stage, providing comprehensive information with minimised effort in less time. Furthermore, upskilling and reskilling will be prioritised, offering flexibility to integrate education into learners’ routines seamlessly, said Prateek Maheshwari, Co-Founder, Physics Wallah (PW).
To help you better visualise the Indian EdTech funding scene, here’s a list of Indian EdTechs funded in Q4 2023. The list comprises all details of the funding round in the Indian edtech sector for Q4 2023.
