After a phase of bankruptcies and sharp consolidation, India's edtech sector is showing signs of revival, with startups raising more capital in the first half of the year than they did in all of 2025.
Investments into the country's edtech firms surged to $178 million in the first half of calendar 2026 from $73.3 million in the same period last year. This is also higher than $155 million raised in entire 2025, according to data intelligence platform Tracxn.
The jump in funding could be an early sign of revival in the battered edtech sector, where annual investments remained far below the 2021 peak, when the industry attracted around $4.1 billion capital at the height of the pandemic.
Investments have since plunged as pandemic-driven demand for online learning cooled and students returned to offline classrooms, dropping even below the previous decade-low of $235 million in 2016 to just $155 million in 2025.
Byju's shadow
Experts, however, cautioned that despite the visible recovery, the industry’s reset triggered by the scrutiny around bankrupt edtech major Byju’s is far from over.
“The Byju's episode genuinely hurt investor trust—it showed weak governance, questionable accounting, and a habit (not just at Byju's, but across the sector) of using inflated numbers like GMV instead of real revenue,” said Milan Sharma, founder and managing director of 35North Ventures, a sector-agnostic pre-seed fund.
“The money flowing in now is going to companies with cleaner ownership structures, more honest reporting, and a clear path to making profit. The extra scrutiny hasn't gone away… We're past the worst of it, rather than fully past it.”
Since 2022, Byju's, once considered the poster child of India's edtech sector, has witnessed a dramatic downfall amid corporate governance failures, insolvency proceedings, and legal battles across jurisdictions.
This included a bitter legal dispute with US lenders over a $1.2 billion term loan. In May 2026, a Singapore court sentenced Byju's founder to six months in jail for contempt of court, which the firm and its founder has challenged.
Despite the continued scrutiny, some investment rounds went as high as $50 million, helping boost the sector's overall funding during the first half of the year.
In March, edtech startup Edubuk, which provides technology courses, raised $50 million from Nimbus Capital. It was followed by Exxat, which raised $45 million, and upGrad, which raised $38 million.
In comparison, the largest funding rounds in 2025 were modest at around $30 million, with Seekho raising $28 million and Propelld securing $30 million.
Mint reported in March that edtech firm upGrad has signed a term sheet to acquire rival Unacademy in a 100% share-swap transaction, signalling a potential consolidation move in India’s struggling online education sector. In December, Physics Wallah raised its stake in Xylem Learning to 77.27% with an investment of ₹122.9 crore, according to media reports.
Meanwhile, the average cheque size in seed rounds in edtech has declined drastically to $0.8 million so far this year from $3.6 million during the same period last year, according Tracxn, impacting the quality of companies ready to raise larger rounds in the upcoming years.
“While seed-stage rounds remain relatively small, investors writing larger cheques increasingly expect companies to demonstrate meaningful progress toward profitability or at least operational sustainability. They want evidence that the business can eventually scale successfully rather than relying indefinitely on external funding,” said Anupam Shukla, partner at Pioneer Legal.
Shukla added that firms that have undergone the correction and bolstered their fundamentals are seeing investor interest, particularly at the growth stage.
While the rise in overall funding signals some renewed investor interest in the sector, investors across the board agree that there is greater emphasis on sustainable business models and unit economics.
“Valuations are more sensible now, and the companies that survived had to show real numbers — actual revenue and retention, not just fast growth at any cost,” said Sharma of 35North Ventures.
The activity in early stages, if any, is limited to the growing adoption of artificial intelligence in education, with a new generation of founders building AI-native learning products.
“There's a new wave of companies that are coming that use AI or make education content in a snackable format. That's where most of the dollars have gone through,” said Marmik Mankodi, vice-president of investments at Blume Ventures.