Right from raising fresh rounds of funding, to adding new users, to talks of consolidation, Indian online education sector has been abuzz this year.
According to a Venture Intelligence report, online education sector in the first half (H1) of 2020, raised USD 795 million compared to USD 108 million it attracted in the same period last year, representing a whopping 636% year-on-year increase.
Byju’s, the only Indian edtech unicorn company yet the most valued globally—at about USD 10.5 billion—led the funding in this space with a USD 200 million round from Tiger Global in January this year, meaning that a quarter of the funding in edtech sector in H1 went towards the Bengaluru-based company.
Other notable edtech investments in the H1 2020 include infusion of USD 110 million from Facebook and General Atlantic in Unacademy, South Korean fund KB Global’s USD 6.8 million in Bengaluru-based edtech startup Vedantu. Both the startups cater to K-12 students and offer live tutoring. Unacademy is currently looking to raise another USD 110 to 150 million seeking a valuation of a billion dollars.
The increase in venture capital backing of edtech companies comes at a time when Indian technology startups have been struggling to raise money. The same Venture Intelligence report said total funding in technology startups fell by 11% to USD 4.1 billion in the first half of 2020 compared to USD 4.6 billion in H1 2019.
Even before the COVID-19 outbreak that made online learning a trend worldwide, global funds have been particularly bullish on India’s edtech sector, which is expected to reach USD 1.96 billion in size by 2021.
Now as schools remained closed due to India’s efforts of trying to contain the spread of COVID-19, edtech startups opened up their platforms making courses available free of cost. Edtech majors such as Byju’s, Unacademy, Vedantu, Toppr, and others saw a staggering increase in their new sign-ups. While Byju’s claimed it has witnessed a 60% increase in the number of new students, Unacademy recorded a 3x growth in its free live classes and claimed it’s clocking 30 million minutes of watch time every single day.
VCs have witnessed the value of enabling remote tuition using technology and startups’ ability to handle the surge in traffic. As these companies gain the confidence of investors as well as users, the market is now slowly moving towards consolidation.
Currently, both Unacademy and Byju’s are competing to acquire a two-year-old startup Doubtnut. The New Delhi-based company that helps students solve mathematics problems in their local language, raised USD 15 million in its Series A round in February led by Chinese internet giant, Tencent.