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The Indian startup ecosystem is reportedly one of the top three funded geographies in 2023 YTD in the edtech space, next to the US. Despite this, this space has reportedly experienced a declining trend in funding, similar to its global counterparts.
According to a Tracxn report released on Monday stated that total funding in the Indian edtech sector fell 48% this year compared to the same period in 2022, and declined by 50% as against the same period in 2021, while the number of funding rounds in 2023 YTD experienced a drop of 77% and 82% compared with the same period in 2022 and 2021 respectively.
The report further revealed that most of the funding into Indian edtech startups in 2023 so far was secured in the second quarter. This space observed funding worth $713 million in Q2 2023, accounting for 73.43% of the total funding raised this year. This is also an increase of 37% compared with the corresponding quarter last year.
Moreover, late-stage investments worth $879 million have been recorded in 2023 so far, contributing to more than 90% of the total funding, which is also a drop of 23% compared with $1.14 billion raised in the same period in 2022 and a drop of 39% 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% drop from $618 million raised in the same period last year and an 82% drop compared with $414 million raised in the same period in 2021, it added.
The report also found that no new Unicorns have so far emerged in this sector this year, as against two new Unicorns in the same period last year. Additionally, 2023 YTD witnessed seven acquisitions, a 70% decline compared with 23 acquisitions in the same period in 2022 and 19 acquisitions in the same period in 2021.
Furthermore, among Indian cities, Bengaluru 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 August 7, 2023, followed by Mumbai ($2.5 billion) and Gurgaon ($497 million), the report revealed.
“Despite the current challenges, there are reasons to remain optimistic about the edtech sector’s role in transforming education in the country. With the right support and a continued commitment to innovation, it has the potential to drive meaningful change in India’s educational landscape,” said the report.
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