The Indian Edtech sector has shown signs of recovery, although it has so far a slump of 48 percent in 2023 compared to the previous year, according to a report from Traxcon, a company for intelligence in the world market. The latest report offers a valuable insight into the Edtech sector of India, which has witnessed a financing crisis in recent months.
The international Edtech market has recently been found various challenges, including a reduced demand for online education, financial limitations, an unprecedented increase in interest rates and a serious economic crisis. This has also influenced the Edtech sector in India. However, the sector has shown an excellent resilience and unique growth potential, according to Tracxn's latest Edtech India – Feed Geo report.
The financing trends of the Indian Edtech sector in 2023
The Indian Edtech sector managed to collect a total financing of $ 973 million between 1 January 2023 and 7 August 2023. However, the reported figures indicate a decrease of 48 percent compared to the year ago $ 1.87 billion. Furthermore, the total amount of funds fell by 50 percent compared to the same period in 2021. Moreover, the number of financing rounds in this period fell by 77 percent and 82 percent compared to the same period in the 1920s and 2021 respectively.
Investments in the late stage that form 90 percent of the total edtech financing was registered at $ 879 million and the number fell by 23 percent compared to the figure of the previous year of $ 1.14 billion. The amount of investments in the early stage saw a steep decrease because the figure was $ 75.7 million, which indicated a decrease of 88 percent compared to the $ 618 million figure that was collected in the same period last year.
Q2 Recovery: a glimmer of hope for Indian edtech startups
Despite the enormous decreases of the financing received by the Edtech segment in the country, there is still some hope for recovery, because the second quarter of FY24 turned out to be a game changer for the domain. Most financing received by Indian Edtech startups were protected in the Q2 of FY24. In the second quarter of the FY24, the sector acquired financing worth $ 713 million, which so far forms 73.43 percent of the total financing. Moreover, the figures also indicate a huge increase of 37 percent compared to the same quarter in 2022.
