The Indian edtech sector, once riding high on pandemic-driven demand, faced a significant downturn following the spectacular fall of Byju’s. The crash of the once-celebrated unicorn sent shockwaves across the industry, raising questions about sustainability, funding, and the very future of online education in India. However, the dust is now settling, and a new reality is emerging—one where edtech startups are recalibrating their business strategies, cutting losses, and even finding a path to profitability. Let’s explore more about it with TICE.
From Boom to Bust: The Byju’s Ripple Effect
A few years ago, edtech was the poster child of India’s startup success story. Fueled by aggressive expansion, sky-high valuations, and investor confidence, companies in this sector spent heavily on marketing, acquisitions, and customer acquisition—sometimes at the cost of long-term financial health. Byju’s, the largest and most well-known player in the space, epitomized this trend, growing at breakneck speed but also amassing enormous losses.
As the pandemic subsided and students returned to physical classrooms, the edtech bubble began to deflate. Investors, once eager to fund ambitious expansion plans, grew wary of unsustainable business models. The funding winter hit hard, and several startups had to lay off employees, restructure operations, or even shut down. The implosion of Byju’s, with its mounting debt, legal battles, and governance issues, only made matters worse, casting a long shadow over the entire industry.
But the narrative is changing. Several edtech companies have emerged stronger from the turmoil, proving that the industry still holds promise—provided it adapts to new market realities.
Edtech’s Comeback: Revenue Growth and Profitability in Sight
Despite the turbulence, many Indian edtech startups have posted remarkable growth in the past year. PhysicsWallah, one of the most talked-about success stories, saw its revenue soar by 160% to Rs 1,940 crore in FY24. The company, backed by WestBridge Capital, is even preparing for a $500-million IPO, signaling confidence in its long-term prospects.
Similarly, other edtech players have shown strong financial recoveries:
- Adda247 recorded an 88% jump in revenue, reaching Rs 129.65 crore while significantly reducing its net loss by 66% to Rs 101 crore.
- 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—profitability is also within reach for several players. LEAD School increased its revenue by 25% to Rs 370 crore while slashing its cash burn rate by 65%. The company turned Ebitda-positive in the first quarter of FY25 and is expected to break even for the full fiscal year. Great Learning, a subsidiary of Byju’s, reported a 23% revenue rise to $118 million while maintaining a positive Ebitda.
Even Unacademy, which saw a 7% decline in revenue, managed to slash its net loss by 62%, bringing it down to Rs 631 crore in FY24 from Rs 1,678 crore in FY23. 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 recent success of these companies is not accidental; it is the result of a significant course correction across the industry. Experts point to three key shifts that have helped edtech startups regain stability:
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A Shift from Growth-at-All-Costs to Sustainable Expansion
Gone are the days of unchecked cash burn and reckless spending on customer acquisition. Many startups have drastically cut marketing expenses, streamlined operations, and prioritized core product offerings. The focus has shifted towards unit economics and operational efficiency, ensuring that every rupee spent generates tangible returns. -
The Rise of the Hybrid Model
The pandemic forced education to move entirely online, but the long-term reality is more nuanced. The future of edtech lies in a hybrid learning model—a blend of offline and online experiences. Startups are increasingly collaborating with schools, coaching centers, and universities to create integrated learning solutions that cater to evolving student needs. -
Investor Confidence is Returning
The stabilizing market conditions are once again attracting investors. Data from Tracxn reveals 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.Notably, PhysicsWallah is reportedly raising a $25-million pre-IPO secondary funding round, with a valuation of $3.7 billion—a strong signal of investor faith in the sector’s future.
The Road Ahead: Can Edtech 2.0 Succeed?
While the worst may be over, the Indian edtech industry is still navigating challenges. Consumer preferences have shifted, regulations are evolving, and competition remains fierce. Companies that can strike the right balance between affordability, quality, and accessibility will have the best chances of success.
The lessons from Byju’s downfall are clear: growth must be sustainable, financial discipline is non-negotiable, and innovation must align with real-world demand. Indian edtech is not dead—it is simply evolving into a leaner, smarter, and more resilient version of itself.
As startups continue to refine their models and investors warm up to the sector again, the next few years could see the emergence of a new generation of edtech leaders—ones that are built not just on ambition but on solid business fundamentals.
