Edtech Funding in the Covid19 Lockdown times

• 04/10/2020
•    

 The Covid-19 crisis has shrunk the investment intake for startups globally in 2020. In India, Venture Capitals (VC) investments have significantly fallen. If there is one sector that continues to see extraordinary growth during these times, it is the Education sector. With the Corona Virus locking down all Indian cities since the end of March, online education and e-learning platforms have become an alternate source and have exponential growth. And that did not come as a surprise, considering that around 1.5 billion students were stuck almost overnight as cities locked down and educational institutions closed.

 

The expeditiously rising graph of the edtech sector has been able to see an increase in interest from various investors. During the first quarter of 2020, edtech emerged as one of the hottest areas with Byju’s alone raising $400 million, while Unacademy was able to raise $100 million in a round led by Facebook. Nevertheless, out of various fourteen startups, at least nine of them were able to raise seed funding, which means investors are inclined to bet on an early-stage startup that can prove its worth during the Covid-19 pandemic.

 

As per reports, BYJU’S has continued its hot streak of attracting investors and would probably be able to raise another investment for about as much as a $10 billion valuation. BYJU’S reported that its last year valuation was around $8.2 billion. The startup is now reportedly ready to get an additional $400 million from its latest investors. Moreover, online education has seen a massive boost since the lockdown started in March 2020. Almost all other online platforms have opened up their content for free, making it more accessible for all students. ‘Even in a challenging environment, edtech is expected to remain a very hot sector of VC investment’, said a KPMG report.

 

 As per reports that came out in January 2020, 2019 had a total VC investment of $7 billion. It is expected to see much more significant growth in 2020, and with how the investors have come in, the assumption might just become a reality.

 

 

In April and May 2020 alone, various startups managed to raise over $50 million from various VC investments. A few significant recipients of these investments, as per data intelligence platform Tracxn, are as follows:

 

 

STARTUP	FUNDING DATE	ROUND	AMOUNT
Classplus	May 04, 2020	Series A	$9 million
Pedagogy	Apr 30, 2020	Seed	$400,000
Vedantu	Apr 24, 2020	Series C	$7 million
GUVI	Apr 23, 2020	Seed	$788,156
Lido	Apr 07, 2020	Series B	$7.5 million
Camp K-12	Apr 02, 2020	Seed	$4 million
Auxilo	Mar 26, 2020	Series B	$6.7 million
Univariety	Mar 20, 2020	Series A	$1.1 million
Vedantu	Apr 08, 2020	Series C	$7 million
Lido	Mar 30, 2020	Series B	$3 million

 

 

The growth in these start-ups

 

As much as a month before the Covid-19 lockdown was initiated, almost all schools and colleges across India were already shut as a prudent course of action to prevent the virus from spreading too much. As the dates for resuming schools and colleges in India kept getting extended, they realised that they needed to change their methods of teaching. In order to continue the education of students, most of them went online.

 

Edtech startups have seen their numbers grow by the minute. And they have continued to grow. In March 2020 alone, BYJU’S reached out to 6 million new students, and allowed access to free lessons on its platform, while Unacademy rearranged its 1 billion watch minutes. Toppr, another edtech app, saw almost 100% growth in its free user engagement in March 2020 alone. Lido, which managed to raise sufficient funds in March 2020, also went ahead and hired over 500 tutors across the nation as it was doubling down during the sudden edtech boom.

 

Some of the prominent investors are as follows:

 

INVESTORS	STARTUPS FUNDED
Blume Ventures	Unacademy MockBank
Sequoia Capital	BYJU’S Eruditus
Omidyar Network	Vedantu Whitehat Jr
Nexus Venture	Quizizz Unacademy
Saif Partners	Toppr Unacademy
Accel Partners	Eduprestine Vedantu
Innoven Capital	Flintobox Simplilearn
Helion Ventures Partners	Simplilearn Toppr

 

 

MillionCentres is one such startup that provides its user access to almost everything. From private tuitions, to live classes, from sports centres to various hobby centres, they have it all. They also provide for the best live class experience, with over 20,000 tutors and centres all across the nation. Dance, Yoga, Music and Photography are just a small part of their hobby centres.

 

There is no denying that the edtech sector has now become one of the most attractive sectors for VC investments. All these various startups’ investments present only one thing that India has started to move towards the analogy of acquiring education by any means possible. And unlike most other companies and startups, including Oyo, Uber, and Zomato, which are now cutting down their workforce, edtech platforms such as UpGrad, Simplilearn, Vedantu, and Dronstudy are looking at creating over 3,000 new jobs over the next twelve months.