The edtech industry has experienced rapid growth in recent years, especially during the COVID-19 pandemic, and 2024 is set to change significantly.
The region’s hyper-growth mindset was fueled largely by venture capital (VCs) firms, the lure of technology-driven disruption, and the rush to capitalize on the surge in demand caused by the pandemic.
However, in 2024 this hyper growth mindset began to change. The industry shifted away from its earlier obsessions and began to place more emphasis on efficiency, profitability, and delivering meaningful value—setting the stage for sustainable growth that is built upon over time.
This change reflects not only caution but also a sign of maturity. And yes, nudging some investors didn’t hurt either.
One cannot talk about valuations and investors without mentioning BYJU’S. Once the poster child of Indian edtech’s explosive growth, BYJU’S has seen its valuation plummet amid ongoing legal battles and bankruptcy-related proceedings. With 2024 serving as a turning point for the broader edtech industry, the company’s struggles have become a cautionary tale for the sector.
“We are honestly tired of hearing about BYJU’S,” says an edtech founder, who wished to remain anonymous, “The BYJU story has already made an impact in the edtech space; the industry, investors and ecosystem have moved on to a great extent.
The funding problem remains
As the edtech ecosystem strives to move forward, it continues to face challenges such as funding.
Vikram Gupta, founder and managing partner of IvyCap Ventures, says the challenges the edtech sector has faced this year are not just a result of internal struggles, but rather entrepreneurs’ difficulty in raising capital.
“Investors stayed away from the sector, trying to understand what was really going on. In the process, entrepreneurs who were in the midst of growth really suffered a lot,” adds Gupta.
Although funding in India’s edtech sector showed a slight improvement in 2024 over the previous year, driven by large rounds from companies such as Alakh Pandey-led Physics Wallah (PW) and Ashwin Damera-led Eruditus, overall funding levels remained significantly lower than previous years. .
But those big funding rounds, while positive, reflect a targeted recovery for specific players rather than a broader revival across the sector.
Gupta says investor confidence is “very cautious” about the broader opportunities in the edtech sector, and it will take time before investors start writing “big checks.”
He added that it also differentiates the type of investors in the sector. For example, “impact-oriented capital” may continue to flow, while “high-return-oriented capital” may remain on the sidelines.
“In 2025 the sector will start opening up opportunities in various ways, but I expect this to happen only in the second half of the year,” Gupta noted.
As entrepreneurs face challenges in raising the next round of funding, Gupta suggests that whatever business model they pursue, they must be highly capital efficient. If their “survival” depends on securing the next round of capital, this will pose a significant issue.
Edtech entrepreneurs “have to have profitable business models” – this will be “key in this space”, he insists.
Design: Nihar Apte
A new chapter
The days of reckless spending and unchecked ambition are waning in this new edtech chapter—though some outliers remain.
Edtechs have moved towards building flexible businesses, prioritizing disciplined financial management and thoughtful scaling. With investors demanding not just promises but proven paths to profitability, startups are reimagining their strategies, creating sustainable foundations for the future.
“This year, the industry has moved beyond surface-level adjustments and embraced a holistic approach to increasing operational efficiency while staying true to its mission of creating long-term value,” says Krishna Kumar, founder and CEO of SimpleLearn.
Kumar adds that the most important thing for edtech companies this year is the realization that education is not a short-term venture but a long-term commitment.
Shantanu Rooz, founder and CEO of TimLiz EdTech, highlighted that the edtech industry has matured significantly this year as it shifted from “vanity metrics” like user engagement and downloads to real financial metrics and sustainable growth.
While top-line growth for edtech companies has slowed and is expected to moderate in FY25, players such as Eruditus, PhysicsWallah (PW), upGrad, LEAD Group, and Simplilearn are focused on achieving EBITDA profitability or breaking even. Some have even seen early signs of success in certain quarters.
For one name on that list – PW – it would mark a return to profitability. The firm, once hailed as the only profitable edtech unicorn, slipped into the red in FY24 and FY23 (after revised figures), due to a sharp increase in expenses.
AI blocker
While most companies are reining in their spending, one area where investment is flowing freely is artificial intelligence (AI). In particular, generative AI (GenAI) has emerged as a game changer in education, with the potential to revolutionize how students learn and how edtech works. AI also brings the promise of cost reduction.
Simplilearn’s Kumar highlights GenAI as a major disruptor in education, with its growing adoption among edtech companies, enabling more personalized learning experiences will remain a key focus moving forward.
“As AI becomes more integrated, using GenAI will no longer be just a competitive advantage – it will be a necessity. Companies that do not adopt AI will struggle to compete,” he asserted.
This trend points to a future where AI-powered tools will be indispensable, not only in traditional education but also in corporate training, upskilling and lifelong learning.
“The increasing use of AI and data analytics has enabled educators to better align content with the evolving needs of learners and employers, making skills more targeted and effective,” comments Mayank Kumar, co-founder of upGrad.
The hybrid model continues
As AI makes strides to solve educational challenges, the real test for edtech companies lies in their ability to continually innovate in ways to meet the evolving needs of students while also driving engagement and retention.
For the last bit, the offline channel — the second frontier for edtech firms and the first, traditional frontier for education companies, especially in the K-12 and test-prep segments — comes into play. Edtech companies are expanding their offline presence through hubs and touchpoints, moving beyond the online space to provide more personalized, face-to-face learning experiences, and building stronger community engagement.
Simplilearn’s Kumar said a continued focus on hybrid learning, combining online and offline elements to provide a more flexible learning experience, will be a key strategy going forward.
He noted that while offline learning will continue to be important in areas such as test preparation, hybrid models are expected to become the norm in many segments.
Edtech players such as PhysicsWallah and Unacademy have made significant investments in recent years to expand their offline presence, and continue to do so.
While the offline channel for PW is growing rapidly, its online segment still accounts for more than half of revenue, with a 55:45 split between online and offline.
Meanwhile, Unacademy co-founder and CEO Gaurav Munjal said the company’s offline center business recently grew by 30%, while both channels showed significant improvement in unit economics, but the online exam preparation segment declined.
TeamLease Edtech’s Rooj believes the future embraces multiple formats—online, offline, blended, on-the-job, and colleagues—each offering unique strengths.
Design: Nihar Apte
Mergers and Acquisitions
As companies navigate the challenge of finding the right business model amid tight investor funding, not everyone has the financial resources to endure for the long haul. It paves the way for mergers, acquisitions and consolidations.
Gupta says that some companies that struggled to raise capital in 2023 and 2024 are still facing problems. They may have pivoted to different business models, but many are likely to be acquire-hire in the future, while others may offer themselves for mergers and acquisitions, potentially at a discounted price, he adds.
“There are some startups that are already profitable. Some of these startups could have secured funding in a better market if not for BYJU’s situation. It is really unfortunate for competent entrepreneurs with strong business models whose funding prospects were affected,” explains Gupta.
SimpleLearn’s Kumar, who expects growth in 2025, particularly in the form of acquisitions, believes that as consolidation picks up pace, it will create more investment opportunities and make the sector increasingly attractive to investors.
He added that Simplilearn is actively exploring acquisitions to strengthen its portfolio and fill any existing gaps.
TeamLease Edtech’s Rooj expects a wave of small to mid-sized M&A deals with large, established players acquiring smaller companies. He elaborated that activity will likely focus on firms specializing in specific areas such as AI-powered learning platforms, employment solutions, and industry-specific upskilling programs.
However, M&As in the edtech sector often come with downsides, especially layoffs. These are driven by efforts to streamline operations, reduce redundancies and cut costs. Over the past few years, many startups, including Unicorn, have resorted to significant workforce cuts as part of broader cost-cutting measures facing losses.
This year too, the sector saw at least 250 job cuts, including some big names like Unacademy.
Roose believes that as the industry matures, layoffs will decrease, providing new job opportunities.
“As companies focus on growth opportunities, we anticipate increased hiring across the region, leading to net employment additions in edtech by 2025 as companies look to capitalize on the new industry’s potential,” notes Kumar.
what’s next
upGrad’s Kumar says that while measuring access to quality education remains a challenge, in 2025 it will be even more important to focus on outcomes in the education sector.
He adds that internship-driven learning will take center stage, giving students the hands-on experience they need to thrive in a competitive job market.
Supported by initiatives such as the Indian government’s internship and skills programs, there is increasing collaboration between edtech companies, academic institutions and corporates to ensure learning remains relevant and practical, Kumar explains.
(Cover image and infographics designed by Nihar Apte)