Indian edtech funding plummets by 48% in 2023 compared to last year

According to a report released on Monday, total funding in the Indian edtech sector has seen a significant decline this year. Funding has fallen by 48% compared to the same period in 2022, and by 50% compared to the same period in 2021. Only one fundraising round worth more than $100 million has been recorded so far this year, up until August 7th.

The majority of funding in the domestic edtech market has been obtained in the second quarter, amounting to $713 million. This accounts for 73.4% of the total capital raised in the sector this year. However, the edtech market has been facing various challenges, such as a decrease in demand for online education, ongoing funding constraints, rising interest rates as a measure to control inflation, and economic uncertainties.

The number of funding rounds in 2023 has declined by 77% and 82% compared to the same period in 2022 and 2021, respectively. Late-stage investments in 2023 have reached $879 million, contributing to over 90% of the total funding. This marks a decrease of 23% compared to the $1.14 billion raised during the same period in 2022. Early-stage investments in 2023 amount to $75.7 million, which is an 88% drop from the $618 million raised during the same period last year.

This year, no new unicorns have emerged in the Indian edtech sector, unlike the same period last year when two new unicorns were recorded. In terms of total funds raised, Bengaluru is leading among cities, followed by Mumbai and Gurugram.

Over the past two years, We Founder Circle, Peak XV Partners, and MMPL Trust have been the most active investors in the edtech space. We Founder Circle, IPV, and LetsVenture were the top seed investors, while Peak XV Partners, Better Capital, and AngelList were the top early-stage investors. MMPL Trust, WestBridge Capital, and The Chan Zuckerberg Initiative were the top late-stage investors, according to the report.