The funding boom in the edtech sector in 2021 was reflected in FY21 salaries of the founders of edtech startups
Founders of top eight edtech startups received a total gross salary of about INR 14 Cr in FY21
Founders of newly-turned unicorns LEAD and PhysicsWallah received INR 1.07 Cr and INR 75 Lakh, respectively, as gross salary in FY21
The edtech sector was one of the fastest growing sectors in the country’s startup ecosystem for the past two years. The stay-at-home mandates during the pandemic led to schools, colleges and tuition centres shutting down, which resulted in students flocking to these edtech startups.
The boost provided by the pandemic to the sector was also reflected in the salaries of top executives of these startups, with founders of eight major edtech startups earning over INR 14 Cr in gross salary in FY21.
While BYJU’S cofounder Divya Gokulnath was on the top of the list, taking home INR 1.94 Cr in gross salary in FY20, Unacademy’s Gaurav Munjal stood second with a gross salary of INR 1.58 Cr in FY21.
It must be noted that BYJU’S is yet to file its audited financials for FY21, hence the startup’s FY20 numbers have been considered for this article.
While founders of LEAD – Sumeet Mehta and Smita Deorah – received INR 1.07 Cr each as gross salary in FY21, newly-turned unicorn PhysicsWallah’s founder Alakh Pandey took home a salary of INR 75 Lakh during the year.
One of the reasons behind such high salaries could be the large amount of funding received by these startups during the period. As students took to edtech startups in 2020 and 2021 for their learning needs, investors cut big cheques to these startups to make the most of the exponential growth.
This is clearly reflected in the data of the number of funding deals in the sector. In 2019, before the onset of the pandemic, edtech startups raised $440 Mn across 49 deals. However, the deal count, as well as the funding amount, rose substantially in the pandemic-ridden next two years. In 2020, edtech startups mopped up $1.4 Bn in funding across 103 deals, while the number further increased to $4.7 Bn in funding across 166 deals in 2021.
The rush of investors in the edtech sector can also be gauged from the fact that six of the seven edtech unicorns joined the coveted $1 Bn valuation club during the pandemic.
However, the party didn’t last long, and the year 2022 is turning out to be a tough year for edtech founders. With the opening of schools and colleges following a decrease in Covid-19 cases, many edtech startups have seen a decline in the number of students using their platforms. Besides, fear of a global recession amidst the ongoing Russia-Ukraine war, rising inflation and tightening of monetary policies have led to a sharp decline in funding.
As the cash-burning edtech startups failed to secure funding, many of them resorted to cost-cutting and employee layoffs to extend their runway. The Indian edtech startups have laid off around 4,000 employees in 2022 so far.
While many edtech startups are looking at potential acquisitions by bigger firms to remain afloat, two of them, Udayy and Crejo. Fun, shut their operations in 2022.
Many edtech startups have also come up with new products, like Unacademy’s Relevel, to achieve profitability. However, only time will tell if these efforts will be enough to heal the woes and yield results or if the edtech startups would have to resort to more drastic measures.
Update | 21st August, 14:45 IST
FY21 compensation of Mukul Rustagi and Bhaswat Agarwal of ClassPlus includes a performance bonus of INR 50 Lakh each.