Spike in VC investments in ed-tech startups

Data from Venture Intelligence research has pointed out that in the first six months of 2020, venture capital firms (VCs) have shown a clear preference for ed-tech startups with US$ 795 million raised compared to US$ 108 million in the year ago period. In fact, it is the only sector besides healthcare to report a growth in number of deals.

These startups have already mustered around US$ 795 million (25 deals) funding in H1 compared to US$ 296 million in H2 2019 (23 deals) and US$ 108 million (19 deals) a year ago. These were largely driven by Byju’s, which attracted a US$ 200 million investment from Tiger Global in January’20 and an undisclosed amount of funding from BOND. Unacademy, too, succeeded in raising US$ 110 million investment from Facebook and General Atlantic.

While there were 393 deals worth US$ 4.6 billion during H1 2019, H1 2020 (data till 26 June) recorded 272 deals raising $4.1 billion across sectors. During this period, most sectors raised funding before the full impact of the pandemic started in April. The study also found out that ecommerce reported a 70% dip in deal sizes and half the number of deals compared to the same period last year.