T P Venu: With the second wave of the Covid-19 pandemic, the Edtech sector is gaining traction. In the last few months many big as well as small-time players in the sector have raised funds.
Byju, Vedantu and Unacademy the big players have all raised funds with Byju leading the pack by raising $460 million to reach a valuation of more than $13 billion. Byju had raised more than $1 billion last year. It may be noted that out of the $2.2 billion raised last year, $1.35 billion was raised by Byju alone.
Unacademy joined the unicorn club last year after two rounds of fund raising which put the valuation of the company over $2 billion. Another edtech player Vedantu had raised $100 million last year as part of the series-D round, taking its valuation to $600 million.
According to industry leaders, the edtech sector would witness infusion of more funds primarily due to the increasing demand wrought by the second wave of Covid-19. Many states in India have already reverted back to online teaching.
According to Indian Private Equity and Venture Capital Association (IVCA) and PGA Labs data, Indian edtech startups raised over $2.2 billion in 2020 as compared to $553 million in 2019. Sources in the industry say that in the coming months, many small players too would be interested to raise funds.
Budget schools that were not interested earlier are now looking to scale up learning process by adapting to technology especially in Tier-II and Tier-III cities.
K-12 and Test Preparation companies accounted for the largest share of $1.98 billion, followed by Continued Learning ($142 million); higher education attracted an investment of $84 million, Pre-K at $12 million and B2B Edtech companies at $7 million.
As per estimates, the education market in India is expected to grow to $225 billion by FY25, a 14 percent CAGR over the FY20-25 period.
There is a surge in demand for augmented reality (AR) and virtual reality (VR) in the learning process. Artificial intelligence and data analytics-based solutions in the learning platforms would be used and this results in huge demand for edtech companies.