After a year-long pause, GSV Ventures looks to invest in Indian edtechs in 2025

GSV Ventures, which invests solely in edtech companies worldwide, is set to ink two new deals, including one in India, which is expected to be announced in 2025, Quazzo told Mint.

Despite a positive outlook for the Indian market, the venture capital firm refrained from making any new investments in Indian edtechs during 2024, limiting its activity to a follow-on investment in Physics Wallah.

It had invested about $90 million in over 10 Indian startups, including Physics Wallah, Classplus, Lead and AdmitKard, till February 2023, Mint reported earlier.

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To be sure, India’s edtech sector has faced two challenging years, marked by dwindling investor confidence as post-pandemic demand for online learning faded, mounting losses from aggressive growth strategies, and the downfall of the industry giant Byju’s.

Meanwhile, the global edtech investor, managing assets worth $800 million, including a stake in Coursera, continued investing in US-based edtech companies such as Leland, Uplimit, and Doowii, among others, during the year. 

Renewed interest

However, Quazzo indicated a broader resurgence of investor activity in the Indian edtech sector in 2025. The expectation that Physics Wallah's public listing in 2025 will potentially pave the way for significant liquidity next year has spurred a renewed interest in the Indian market.

“Unlike the US market, which has become a market where only very big companies can go public, in India, the market is very receptive to solid companies that don't have to be multi-billion dollars," she said.

For Indian public markets, growth, profitability, sound fundamentals, and strong governance are important for a public listing, Quazzo added.

Also Read: Indian edtech startups niche down into nursing, allied healthcare upskilling

Mint reported in October that several venture capital firms are encouraging some of their trophy assets—even early- or mid-stage startups—to go public. “It's going to be a very attractive option for edtech companies," Quazzo said. 

She expects their three to four portfolio companies to plan for a public listing in the next 24 to 36 months.

As many as 76 firms had gone public as of 9 December 2024, selling shares worth ₹1.34 trillion, Mint reported, citing data from Prime Database.

Positive funding environment

Varun Gupta, managing director and head of Southeast Asia, digital and technology investment banking, Avendus, agreed there was a renewed interest this year on the back of a couple of large funding deals in the sector.

Physics Wallah raised $210 million in September, while Eruditus followed with a $150 million funding round in October. The sector's total fundraising in 2024 surged to $608.9 million from $245.8 million in 2023, showed data from analytics firm Tracxn. 

“Good outcomes with the top three to four assets in this space in terms of good funding rounds in the near term and IPOs in the next couple of years will pave the way for continued interest for high-quality assets in this space," Gupta added.

Also Read: IIT graduates flock to edtech: A new career frontier with high salaries

Quazzo, however, expressed concerns about fewer startups coming forward to raise capital. “We’re not seeing as many startups as we typically have. Part of that is because the availability of capital hasn’t been as strong—capital tends to attract more startups," she said.

“Another factor is the concern about whether a company can find a space where they won’t be disrupted by OpenAI, Google, Anthropic, or others launching products that could put them out of business," she added.

The venture capital firm is exploring more investment opportunities in the intersection of AI and education.

“We’re focusing on what moats can be built around AI... We are trying to figure out where you might have a protected and proprietary place to build a business that won't be impacted by one of the bigger horizontal players who has incredible distribution and scientists," she added.