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Indian Edtech Startup Fresh Start After pandemic in 2022

We are undoubtedly at a crossroads, even though it is in no way the end of edtech. In the past two years, edtech entrepreneurs have lofty goals and plenty of energy, but this celebration is coming to an end as even industry titans are looking for stability.

Edtech in pandemic

Every segment of the education market—from K–12 to skill development to test preparation and non–curriculum edtech—performed well during the pandemic, and for a moment, it appeared that this bellwether event may hasten India’s transition to a long-term edtech future. Unacademy, Eruditus, UpGrad, Vedantu, Lead School, and PhysicsWallah are only a few of the six unicorns that the industry produced between September 2020 and June 2022. India had just one unicorn in the years leading up to these two years.

What’s the stats say about Edtech

Along with valuation, finance increased significantly. The $12.7 billion in total fundraising for the year increased to $1.4 billion in 2019, accounting for over 10% of the overall capital, or $440 million, raised by edtech businesses. With $4.7 Bn raised from 165 deals in 2021, edtech had a 3x rise. After almost six months of the year, the funding amount has surpassed $1.9 Bn (up to June 18, 2022). If the present year is any indicator, the edtech sector does not appear to be on course to equal the speed of 2021.

EdTech fall in the last year

However, given that it is increasingly more difficult to acquire funding and contact students, edtech businesses are sort of in a short-term crisis. As can be seen, with over half of 2022 already finished, financing is only a third of what was observed in 2021.

Due to the erroneous growth strategy of collecting consumers at any cost without considering long-term sustainability, the few significant edtech companies that can afford a wait-and-watch approach are now cutting down from capital-intensive models while others are going through layoffs.

Layoffs of EdTech in 2022

Over 3,000 people have experienced direct effects from the edtech slowdown.

Rajeev Suri, the managing partner at Orios Venture Partners, believes that the ecosystem as a whole is experiencing short-term instability as a result of the current global situation. For many people, the current situation has become tense. And the causes are quite obvious. There is a conflict between Russia and Ukraine. Then, as a result of supply-side problems and growing demand, commodities prices surge. Additionally, the interest rate increase is upsetting the market, he added.

Backing Edtech Hope

UpGrad, an educational technology unicorn, just received $225 million from James Murdoch’s Lupa Systems and New Jersey-based Educational Testing Service, despite the much-discussed financing winter (ETS). Although the transaction has not yet been concluded, the company also plans to raise an additional $100 Mn at a higher value.

The most recent funding shows that investors still believe in edtech’s long-term promise. Many people believe that online learning will coexist alongside the conventional paradigm. Instead than spending money on marketing and aggressive expansion, edtech platforms should prioritise accessibility, high-quality content, and, most importantly, profitability.

Key to success for Edtech

Building a sustainable company model with a path to profitability and adding value to customers, whether through pricing or results, will be crucial for success. And only edtech firms that achieve success by innovation or tactic will stick with it over the long haul.

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