Plenty of courtships, but no one's tying a knot in Indian edtech

Mint

8 hours ago

India's mid-stage edtech startups are finding no takers. Once the darlings of investors in 2021, Indian edtech firms—especially in the series A to C stages—are now struggling to raise fresh funds or secure strategic buyers, Mint has learnt.
Startups at these stages recorded just three deals totalling $9 million so far in 2025—a staggering drop from $852 million across 50 deals in 2021—according to data provider Venture Intelligence, on the back of slowing demand for online learning and adjacent edtech models post-pandemic.
As venture capital dries up, many of these companies are increasingly turning to larger peers for potential mergers or acquisitions to survive and scale. 'We're witnessing a surge in M&A interest across both digital and brick-and-mortar education segments… Smaller companies recognise that joining a larger platform can offer better exit potential," said Varun Gupta, managing director at Avendus, who advises on edtech deals.
Gupta noted that several bootstrapped assets—those built with little or no external capital—have scaled profitably and are now attractive M&A targets.
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Despite increased conversations, deal closures remain elusive. Only seven M&As have occurred in 2025 so far, compared to 46 in 2021.
M&A activity in edtech has sharply declined since its peak four years ago of 46 deals worth $3.36 billion. In 2022, deals remained high at 49, but their value dropped to $1.05 billion. The slowdown deepened in 2023 (23 deals, $104 million) and 2024 (12 deals, $138 million). In 2025 so far, only seven deals worth $37 million have been recorded, reflecting continued caution and consolidation.
The average size of such deals has also nosedived—from $73 million in 2021 to $5.2 million this year.
Unfinished agenda
Some recent deals that did close include Imarticus Learning's $6 million acquisition of MyCaptain and FinX's $2 million buyout of BSE Institute. 'Market conditions, such as economic climate and investor sentiment, often lead to valuation disagreements, making negotiations complex. For example, median revenue multiples for edtech companies were around 1.6x in Q4 2024, reflecting a cautious approach by investors," said Nikhil Barshikar, founder and CEO, Imarticus Learning.
However, many high-profile acquisition talks are falling through. After an unrealised deal with Allen, Unacademy is now looking to hive off Airlearn, asMintearlier reported. Similarly, Simplilearn, another company said to be exploring a sale,Mintreported earlier, has not found any takers yet.
Well-capitalised players, or potential buyers, are approaching M&As cautiously.
Physics Wallah's negotiations to acquire Drishti IAS fell apart recently, Entrackr reported last week.
Others are choosing to grow organically. 'There are too many companies in each segment of the sector, many without sustainable or scalable business models. What the industry needs now is a period of contraction," said Ronnie Screwvala, chairperson and co-founder, upGrad.
'This means to hold on for the next 18 months to see who will be around without funding, as many will perish," he added. Since 2021, close to 16 funded edtech players like Stoa, Dojo, Bluelearn and Udayy have shut shop, Tracxn data showed.
Screwvala also warned that prematurely consolidating with startups that lack viable business models may lead to larger issues later.
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Akshay Chaturvedi, founder and CEO of talent mobility platform Leverage.biz, said he dropped acquisition plans after evaluating two companies earlier this year after failing to reach an agreement on valuation benchmarks. He declined to name the firms, citing confidentiality.
'We're evaluating companies, but there's continued back and forth on valuations as many are missing their revenue and profit targets," said Chaturvedi. He is looking for acquisitions to grow in Europe and Southeast Asia, and other markets in the revenue range of $10-15 million.
What's blocking deals?
The hesitation stems from both valuation mismatches and concerns over stable profits in these companies. 'Non-scaled business models don't lead to meaningful or long-term value-accretive M&As. These often turn out to be top-line buyouts that eventually fade, as they aren't sustainable or profitable," said Screwvala.
He added that in many of these cases, the growth trajectories look unusually steep and have, in most cases, tapered off. Many startups that raised capital in 2021 at inflated valuations are now unable to justify them with current metrics, making acquirers hesitant.
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Still, investors believe the M&A logjam will ease in the next few years, for firms in the $100-500 million valuation range that have achieved scale. 'We think strategic or financial transactions are a possibility in the coming years…Most of the companies with decent scale—$25 million revenue—are breakeven and/or have cash to get to breakeven," said Mujtaba Wani, principal at GSV Ventures, an edtech-focused global VC firm. 'So the catalyst for M&A will have to be individual initiative."