One thing today in tech – Edtech funding in India, especially early-stage, falls sharply in 2023
In today’s episode we take a quick look at edtech funding, from a report published by Tracxn. But first, a few headlines. Headlines Telecom operators in India want internet companies to compensate them for using their telecom networks, a recommendation they’ve made to the local regulatory body, echoing a viewpoint that is gaining some momentum in other parts of the world, TechCrunch reports. Pentathlon Ventures, an early-stage B2B SaaS-focused venture capital firm, has announced the launch of its second fund with a target corpus of Rs 450 Crore. The fund aims to invest in 25 B2B SaaS start-ups, the VC firm said in a press release. One thing today Now, after all the problems BYJU’s has faced, it might not surprise you that India’s edtech startups haven’t done very well this year, by way of funding, even though they were among the top three most funded geographies in this space, worldwide, in the first seven months or so of 2023, according to Tracxn, a leading provider of private markets intelligence in India. India’s ed-tech startups sector has experienced a declining trend in funding, similar to its global counterparts, according to Tracxn’s latest Feed-Geo report on the ed-tech startups landscape in India. Most of the funding into Indian ed-tech startups in 2023 so far was secured in the second quarter of the calendar year. Companies raised funding worth $713 million in Q2 2023, accounting for 73.43 percent of the total funding raised this year. This is also an increase of 37 percent compared with the same period last year. That said, total funding into the Indian ed-tech space plunged 48 percent to $971 million in 2023 between Jan. 1 and Aug. 7, the period for which Tracxn has compiled data for its report. edtech startups had raised $1.87 billion in the same period in 2022. The 2023 YTD funding is also 50 percent lower than the money the sector raised in the same period in 2021, according to Tracxn. The number of funding rounds in 2023 fell 77 percent and 82 percent compared with the same periods in 2022 and 2021 respectively. Late-stage investments worth $879 million have been recorded in 2023 so far, contributing to more than 90 percent of the total funding, which is also a drop of 23 percent compared with $1.14 billion raised in the same period in 2022 and a drop of 39 percent from $1.44 billion raised in the same period in 2021. Early-stage investments worth $75.7 million were recorded in 2023 YTD, an 88 percent drop from $618 million raised in the same period last year and an 82 percent drop compared with $414 million raised in the same period in 2021. Edtech startups raised $15.7 million through seed-stage rounds in 2023 between Jan. 1 and Aug. 7, a drop of 85 percent from $105 million raised in the same period in 2022 and an 83 percent drop from the same period in 2021. No new Unicorns have so far emerged in this sector this year, as against two in the same period last year. 2023 saw seven acquisitions, a 70 percent decline compared with 23 acquisitions in the same period in 2022 and 19 acquisitions in the same period in 2021. Among Indian cities, Bengaluru, far and away, takes the lead in terms of total funds raised till date, followed by Mumbai and Gurgaon. edtech startups in Bangalore have raised a total of over $8 billion as of Aug. 7, 2023, followed by Mumbai ($2.5 billion) and Gurgaon ($497 million). In the last two years, We Founder Circle, Peak XV Partners, formerly Sequoia India, and MMPL Trust, were the most active investors in this 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.