The Indian edtech sector, once the poster child of pandemic-era growth, has faced a dramatic downturn, highlighted by the spectacular fall of Byju’s. The industry’s challenges have raised concerns about sustainability, funding, and the long-term viability of online education in India. However, amid the turbulence, some startups are recalibrating, reducing losses, and even charting a path to profitability.
From Boom to Bust: The Byju’s Effect
A few years ago, edtech was a symbol of India’s startup success. Companies in this sector spent heavily on marketing, acquisitions, and customer acquisition, often at the expense of financial health. Byju’s, the largest player in the space, epitomized this trend with rapid expansion but mounting losses.
As the pandemic subsided and students returned to physical classrooms, the edtech bubble deflated. Investors, once eager to fund ambitious expansion plans, became wary of unsustainable business models. The funding winter forced several startups to lay off employees, restructure operations, or shut down. Byju’s implosion, burdened with debt, legal troubles, and governance issues, further damaged confidence in the sector.
Edtech’s Comeback: Revenue Growth and Profitability in Sight
Despite these setbacks, several Indian edtech startups have demonstrated resilience. PhysicsWallah saw its revenue soar by 160% to Rs 1,940 crore in FY24 and is preparing for a $500-million IPO, reflecting investor confidence. Adda247 recorded an 88% jump in revenue, reaching Rs 129.65 crore while significantly reducing its net loss. UpGrad, a leader in higher education and upskilling, posted a 30% year-on-year growth. Teachmint and Classplus more than doubled their revenues, signaling growing demand for tech-driven learning solutions. Vedantu saw a 21% revenue increase, while Google-backed Cuemath registered a 5% rise in revenue, cutting losses by nearly 43%.
The recovery is not just about revenue growth. LEAD School increased its revenue by 25% to Rs 370 crore while slashing its cash burn rate by 65%, turning Ebitda-positive in the first quarter of FY25. Great Learning, a subsidiary of Byju’s, reported a 23% revenue rise to $118 million while maintaining a positive Ebitda. Unacademy, despite a 7% revenue decline, managed to cut its net loss by 62%. Meanwhile, Eruditus, which focuses on executive education, posted a 15% growth to Rs 3,800 crore, generating an Ebitda profit of Rs 80 crore.
What’s Driving the Turnaround?
The sector’s renewed momentum can be attributed to a few major shifts. First, there has been a transition from aggressive expansion to sustainable growth. Startups have cut marketing expenses, streamlined operations, and prioritized core offerings. The focus has shifted toward unit economics and operational efficiency.
Second, the rise of the hybrid learning model has reshaped edtech’s future. While the pandemic pushed education entirely online, the long-term trend leans toward a blended approach. Startups are collaborating with schools, coaching centers, and universities to create integrated learning solutions.
Third, investor confidence is returning. Data from Tracxn shows that funding in the Indian edtech sector surged to $652.2 million in 2024, up from just $245.5 million in 2023. This renewed interest suggests that while investors remain cautious, they recognize the potential of well-managed, scalable edtech ventures. PhysicsWallah’s reported $25-million pre-IPO secondary funding round, valuing the company at $3.7 billion, is a strong indicator of investor faith in the sector’s future.
Is Edtech Still Worth the Bet?
Despite the resurgence, the industry faces challenges. Between 2015 and 2024, 2,780 Indian edtech startups shut down, with 2,150 of those closures occurring between 2020 and 2024. Many folded within 3-4 years of inception, with Maharashtra, Karnataka, and Delhi recording the highest number of shutdowns. Increased competition, funding slowdowns, and shifting market demands have contributed to this volatility.
However, success stories remain. PhysicsWallah, founded by Alakh Pandey in 2016, has transformed from a YouTube channel into a major edtech player focused on JEE and NEET preparation. The company recently confidentially filed draft papers for a Rs 4,600 crore IPO and boasts 55 lakh paid students, 4.6 crore YouTube subscribers, and over 130 offline centers. Similarly, Vedantu, specializing in K-12 and competitive exams, is preparing for an IPO of $150-200 million within the next two years.
Byju Raveendran: “Broke, Not Broken”
Amidst the sector’s transformation, Byju Raveendran has pledged a comeback. Once valued at $22 billion, Byju’s is now entangled in legal battles over $1 billion in unpaid debts. The company’s fall has sparked backlash, with critics accusing it of misleading customers and exploiting middle-class parents.
In response, Raveendran has accused the company’s lenders and interim resolution professional (IRP) of misconduct, claiming to have evidence of criminal collusion. While he remains optimistic, the road ahead for Byju’s is uncertain.
The Road Ahead: Can Edtech 2.0 Succeed?
The Indian edtech industry is evolving. Consumer preferences have shifted, regulations are changing, and competition remains fierce. The lesson from Byju’s collapse is clear: sustainable growth, financial discipline, and innovation aligned with real-world demand are crucial.
As startups refine their models and investors cautiously return, a new generation of edtech leaders may emerge—ones built not just on ambition but on solid business fundamentals.
