GSV Ventures to Boost Investments in India's EdTech Sector

By siliconindia  |  Thursday, 11 January 2024, 12:37 IST

GSV Ventures to Boost Investments in India's EdTech Sector
US-based GSV Ventures, exclusively dedicated to investing in global edtech companies, has expressed its intention to increase investments in India's challenged edtech sector. This sector has witnessed significant layoffs due to an extended period of funding constraints. Despite the struggles to raise funds amid a global economic slowdown, the venture capital firm remains optimistic about the edtech sector. GSV Ventures has previously invested in Indian startups like PhysicsWallah, Classplus, Apna, and LEAD School, managing assets totaling around $800 million.
Technology startups globally, including those in India, have faced challenges in fundraising post the subsiding of the COVID-19 pandemic, according to Deborah Quazzo, Managing Partner at GSV Ventures. Indian edtech startups, in particular, experienced a significant decline in funding, dropping from $2.6 billion in 2022 to $297.3 million in 2023, as reported by Tracxn. The edtech sector witnessed substantial growth during the pandemic-induced lockdowns, but with a return to pre-pandemic lifestyles, demand for online learning services decreased.
Quazzo highlighted challenges related to customer acquisition costs (CAC), stating that these cycles are common in business models where the cost of acquiring students can be a hindrance. Notable edtech companies like Byju’s, Unacademy, and Vedantu have been affected by the downturn, leading investors and firms to explore alternatives such as physical tuition centers and offline learning modes. Despite the sector's current state, GSV Ventures remains optimistic, viewing education and skills as long-term investment themes driven by increasing demand and a growing middle class.
GSV Ventures, known for its investments across the education spectrum from Pre-K to higher education, holds a diverse portfolio that includes US companies like Coursera, MasterClass, and ClassDojo. Quazzo emphasized her positivity regarding the Indian edtech sector, citing the government's strong interest, evidenced by initiatives like the National Education Policy (NEP), aiming to make pre-primary and foundational education accessible. The ongoing digitization trend and a young population in India further contribute to GSV Ventures' positive outlook on potential investment opportunities in the country. Quazzo expressed the belief that a high return on education over the long term will drive a high return on investment.

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