Business: Blessings in disguise, Covid-19 makes edtechs flush with funds!
Virendra Pandit
New Delhi: One ‘side-effect’ of Covid-19 has been a sudden surge in remote learning due to the pandemic-induced prolonged lockdowns and other restrictions in India and other countries, forcing the education sector to adopt online classes in a big way.
The result: education technology (edtechs) startups have received huge funding across the world. They are the flavor of the investors’ season.
The pandemic has forced the world to turn to innovative technology tools to support learning and deliver education in the digital model as the traditional classroom model of physical presence virtually collapsed.
Investors discovered an opportunity in this crisis. Globally, edtech funding in the first half of 2021 has reached over USD 10 billion (Rs. 75,000 crores) in nearly 570 funding rounds, reports said on Thursday.
While funding for Chinese startups in the education technology sector plummeted, it increased in the case of edtech startups in the US, Europe, India, South Korea, Canada, and France.
In India, edtechs had received USD 2.22 billion (Rs. 16,480 crore) in 2020. Recently, the Ronnie Screwvala-promoted upGrad raised USD 185 million at a valuation of USD 1.2 billion, making it the newest unicorn startup.
In the last decade (the 2010s), edtech venture capital investments increased from nearly USD 500 million to USD 7 billion (2019). Investors had projected it to go up to USD 87 billion by 2030.
However, it already has reached USD 26 billion, and the current decade may end with investments to the tune of USD 150 billion, reports said.
In the first half of 2021, the world had 27 edtech unicorns and seen 53 mega-rounds of USD 100 million-plus funding. In business parlance, a unicorn is a startup with a valuation of USD 1 billion.
The latest startup expected to join the funding bandwagon is Eruditus which, according to media reports, is likely to raise USD 450 million from investors led by SoftBank Group Corporation, and Accel Partners, at a valuation of USD 3.2 billion. Some existing shareholders could also offload about USD 200 million stakes, the reports claimed.
India’s edtech giant Byju is upbeat. It is aiming to become one of the largest players in the space in the USA as well, with a target to hit revenues of USD 1 billion in the next three years, media reported.
The company wants to replicate the success of its India model and generate 25 percent of its overall revenues from the US in three to four years.
