Edtech In 2025: The Rise After The Fall?

In 2024 the lines between edtech and offline education services companies became blurred more than ever. If we were talking about acquisition of schools, colleges and tuition centres by edtech startups in 2020 and 2021, the last two years turned the narrative — with edtech startups  on sale, looking to get acquired by offline education companies.

And this meant that the relevance of edtech was also up in the air for most of last year. Most edtech platforms had overlapping products and services and overestimated the total addressable market (TAM) particularly as the long-term impacts of the pandemic receded

The biggest impact was the downfall of BYJU’S, but ripple effects have been felt across the industry. Even as the investments in the edtech sector recovered to some extent in 2024 compared to a year ago, they were nowhere close to the peak of 2021 and 2022. And it’s been slow growing, which has impacted profitability as well. 

The disruption from GenAI is also yet to be felt fully in edtech, as use-cases are still evolving.

Even so, 2025 promises to be not as bleak as 2023 and 2024 for the edtech sector. The year may also throw some surprising trends for the sector including the first public listing, but the resolution of the various issues at BYJU’S and the future of the company will also be keenly watched.  

As we look ahead to 2025, here’s what investors, industry experts and edtech founders told Inc42 about the year ahead for India’s edtech industry.

The End Of The BYJU’S Saga 

The fallen edtech giant pretty much dominated the headlines in the edtech sector throughout 2024, but all for the wrong reasons. 

With numerous legal conflicts in the US and in India from creditors, investors and vendors, the edtech giant went into insolvency proceedings last year and this has diminished the hopes of a revival in 2025.

Even as CEO Byju Raveendran continues to talk about a comeback and with speculation about another education venture, the company seems to be on its last legs. 

Raveendran’s former close confidantes and BYJU’S investors say the chances of a comeback are slim to none.

“There are too many legal hiccups now in India. He has made enemies out of some of the biggest VCs and the legal authorities have already been after him. Even his impending arrest in case ED finds anything suspicious in the money laundering case is not ruled out. Hence at least in 2025, there is a limited chance of Raveendran’s voluntary arrival in India,” an investor in BYJU’S wishing not to be named told us.

The fate of the erstwhile $22 Bn company is the most pertinent question in Indian edtech today and could still spell more bad news for the ecosystem. 

The Supreme Court’s final decision on the petition filed by the US lenders is awaited. Plus, the NCLT’s earlier insolvency order against BYJU’S remains effective, and the possibility of the company being liquidated to recover debt and dues is high. 

In all likelihood, BYJU’S may be unable to find a potential buyer in the time that the resolution profession and the committee of creditors still has on their hands. And in this situation, any assets would be auctioned off by authorities, ending the tumultuous chapter of the edtech startup.

Do-Or-Die Battle For Unacademy 

The future of Unacademy comes up for debate every year, with speculation around a potential acquisition coming up in 2023 and also in 2024. 

Unacademy CEO and cofounder Gaurav Munjal had to deny reports about Unacademy’s acquisitions each time. However, according to multiple sources who have worked closely with Munjal, the company was unable to arrive at an agreement around the potential valuation of the deal with  K-12 Techno or Allen Careers Institute.

The test prep company, which once commanded a valuation of $3.4 Bn, was said to be in conversations with acquirers for a valuation of $800 Mn- $900 Mn.

“There were serious problems with Unacademy’s path to profitability and besides Unacademy Centres which contributed a majority of revenues to the firm, the online learning platform wasn’t exactly an industry breakthrough. The offer on the table was to merge with an offline education giant but with a steep valuation cut and that’s why the talks failed,” one of the sources quoted above added.

In December 2024, Munjal clarified on social media that Unacademy is not up for sale after the company saw a 30% growth in its offline learning business with unit economics improving considerably.

While the edtech startup witnessed a degrowth in its online test preparation business, unit economics of this vertical “improved significantly”, Munjal claimed.

Further, he said that cash burn at the group level has declined 50% this year and the company has a healthy cash reserve of $170 Mn with no debt and a runway of over four years.

However Munajl’s real test in 2025 would come how fast he is able to scale the Unacademy Centres which also had its share of problems in 2024 including teacher exodus and cutbacks. Besides this, the company has seen the exit of several key leaders in the past 18 months, which has put Unacademy in a leadership vacuum.  

Uncacademy as per our sources is now cutting costs and also strengthening its YouTube channel to improve acquisition of students. It is also training educators to meet the demands of the hybrid teaching model, where teachers are available both online and offline. Will these steps bring Unacademy back to its glory days? 

Physics Wallah’s $500-600 Mn IPO On The Cards 

Perhaps not surprisingly, Physics Wallah has emerged as the first among edtech companies in India to go for an IPO. 

On the back of a fresh $210 Mn Series B funding in 2024, expansion of its offline centres and addition of new verticals, PW ỉs on track to make the most of the positive sentiment in the public markets. 

PW on its part has started the leg work and has Axis Capital, Kotak Mahindra Capital, Goldman Sachs, and JP Morgan as the investment bankers for its IPO. It converted into a public limited company in December 2024.

The startup also appointed former Blinkit CFO Amit Sachdeva as its CFO in November 2024, in preparation for this public listing journey. Having already converted to a public limited company, PW would be looking to raise $500 Mn-$600 Mn through the IPO at a nearly $5 Bn valuation.

Sources told Inc42 that the edtech company is in the process of completing third-party audits of its books post which it plans to file its DRHP papers with SEBI. “This will take at least six months and the listing is likely to happen towards the second half of 2025,” one senior executive at PW said.

However with PW slipping into losses in FY24  and in the wake of its IPO ambitions in 2025, sources also said that the edtech firm will be strictly on a cost cutting drive in the run up to the IPO.

Gen AI Disruption To Deepen

Generative AI is both an opportunity and a disruption for the edtech ecosystem in India, and thus far we have only seen a glimpse of both these aspects.

In 2024, edtech startups looked to increase their adoption of open source large language models (LLMs) to bring in personalised learning modules, improve content generation, create better course structures and to reskill the workforce.

Two of the biggest edtech unicorns in India — upGrad and Physics Wallah — are well on their way to adopt LLMs at various levels to enhance user experience and simplify their operations.

Mayank Kumar, cofounder and MD of edtech giant upGrad, earlier told Inc42 that the edtech startup has adopted AI to ensure learners understand fundamental concepts more effectively. The startup is using AI to create curricula and enhance the content experience of students. Incidentally, Kumar stepped down from upGrad in 2024 to launch a new venture in the upskilling and job placements category.

Similarly, edtech major PhysicsWallah introduced an in-house AI platform fashioned “Alakh AI” which it claims serves as a personal AI tutor and assistant for students, enabling personalised learning and testing.

Industry analysts say that the edtech companies will continue restructuring their business models in 2025 driven by deeper GenAI adoption, which could also result in workforce reduction for educators and course creators. 

“Customer service is a huge workforce area in edtech which is to some extent now being replaced by AI chatbots. Further, AI assistants also allow educators to create content swiftly, reduce turnaround time for assessments and feedback. It also enhances real-time interaction with students,” a Bengaluru-based founder of an AI-first edtech startup told Inc42. 

Moreover, the government’s push to enroll more school students for AI courses under National Education Policy (NEP) is also expected to generate demand for AI tutoring, create opportunities for edtech startups in the K-12 space to offer personalised learning in AI courses as the demand picks up in 2025.

Consolidation Wave Imminent In Edtech 

According to Inc42’s Indian Tech Startup Funding Report, 2024, the year gone by saw investments into the sector significantly improve to $568 Mn from $283 Mn. However what is more interesting is that the investments in 2024 spread over 29 deals, whereas the deal count in 2023 was 47.

This indicates that growth and late-stage deals and large ticket sizes became the driving trend in edtech in 2024, spearheaded by Physics Wallah’s $210 Mn raise.

As investors largely focussed on sectors like fintech, enterprise tech, AI and ecommerce in the seed to growth stages, early stage edtech investments remained muted.

Investor caution was apparent throughout 2024 as the VCs wanted edtech founders to continue the push for stronger unit economics and path to profitability.

In terms of the M&A activity too, 2024 was a slow year, with Genius Teacher’s acquisition by Schoolnet India and Adda 247’s acquisition of test prep platform Ekagrata Eduserv being the only prominent deals.

“Investor sentiment in India’s edtech sector is shifting toward companies that exhibit resilience and sustainable growth. There has been a broader trend in the market, where investor caution has led to a preference for larger, fewer funding rounds, driven by the same focus on quality and stability in a challenging macroeconomic environment,” Ashwin Damera, founder and CEO of Peak XV-backed Eruditus, told Inc42.

However, industry watchers expect more M&As to get through in 2025 as smaller startups become streamlined thanks to the adoption of AI models and after cost-cutting in key areas. 

Analysts say that the bigger companies may keep an eye out for acquisitions in niche verticals as expansion will play out majorly in 2025. However, valuations may continue to see a big downward correction, relative to 2021-2022 numbers. 

“Investors are now looking for real growth metrics in any edtech up for sale instead of vanity metrics like MAUs, DAUs. They also need a track record of financial discipline over the last couple of years rather than a sudden dip in costs,” commented a veteran partner at an early stage VC firm.

Study Abroad, Upskilling To Shine Bright

Despite some headwinds in the edtech industry after the pandemic, some verticals have shown strong growth momentum including study abroad, education financing, upskilling and reskilling. That’s in addition to the persistent traction for test prep in India ever since edtech emerged in 2011-2012.  

According to government data, the number of Indian students studying abroad has significantly grown over the past few years from 907,404 in 2022 to 1.33 Mn in 2024 with Canada, US and UK as popular study destinations.

As per data collated by Prodigy Finance, engineering and MBA streams are extremely popular choices for Indian students going abroad, but as the education landscape evolves, many students are exploring courses beyond traditional STEM and MBA.

“2024 has been a pivotal year for the study abroad sector, driven by shifting global trends and evolving student priorities. Sustainability, digital tools for personalised guidance, and emerging non-traditional destinations have reshaped international education. Students increasingly seek interdisciplinary programmes aligned with global challenges like climate action, healthcare innovation, and tech-driven solutions,” Daljeet Sandhu, CEO of study abroad platform Dalton AI Portal said.

However, within this segment, challenges such as fluctuating visa policies and rising education costs are growth hurdles. Startups also need to capitalise on the hybrid learning opportunity in the global market. 

With AI/ ML continuously evolving the landscapes of different industries, upksilling and reskilling platforms will continue to show traction and grow in adoption. 

“In 2025, upskilling and reskilling will drive India’s edtech landscape. As AI, machine learning, and other cutting-edge technologies continue to disrupt industries, the demand for a highly skilled workforce is only set to surge. According to the Workplace Learning Report 2024 by LinkedIn, 4 in 5 people want to learn more about how to use AI in their profession which indicates an unprecedented need for AI-focused upskilling,” Eruditus’ CEO Damera said.

He added that the edtech companies will have to step up and offer tailored courses to fill an increasing demand supply gap in fields like data science, cyber security and AI.

[Edited By Nikhil Subramaniam]