While the Indian edtech startup ecosystem moved towards what some might call a recovery phase in 2024, with a surge in private investments as well as the first edtech startup listing in the form of PhysicsWallah, the momentum was all but fleeting.

Edtech startup funding plummeted by 56% year-on-year to $249 Mn from $572 Mn invested in 2024, as per Inc42’s Annual Indian Startup Trends Report, 2025. Funding for the sector, once the poster child of India’s burgeoning startup ecosystem, dropped to an 8-year low in the previous year.

Deal count in the sector also took a major hit in 2025, down 35% to 31 deals closed in the year under review from 48 in 2024. In comparison, 172 deals were closed in the edtech industry during its 2021 boom.

At the same time, M&As held comparatively steady at a mere five acquisitions in 2025, similar to the year prior.

It won’t be unfair to say that the ecosystem is yet to recover from the funding winter that rocked it in 2022. The same year marked the start of the series of troubles that led to the fall of edtech’s biggest unicorn, BYJU’S, which continues to grapple with troubles ever since. Issues also began piling up for other edtech majors like Unacademy and Vedantu.

The issues for major edtech names have had far-reaching implications for the sector as a whole. Coupled with a back-to-school mandate, many startups in the space struggled to find a footing amid growing irrelevancy and competition. These have contributed to the diminishing investor interest in the space.

“There seems to be a lot of apprehension against the sector because investors had already lost their hands in BYJU’S and Unacademy, companies had very large valuations, but there were no good solutions, because the model was inherently flawed,” early stage edtech startup Dalvoy AI cofounder Ritik Agrawal told Inc42.

So, is........

© Inc42