The Edtech Bubble has burst

The term “education technology,” or “edtech,” refers to the application of technology to enhance instruction and learning. It can be found in a variety of formats, including gamification, virtual reality, online courses, interactive learning tools, and data analytics. Many people have asked what brought the rise of Edtech and there are quite a few things that did. One reason was The pandemic being used as an engine of expansion. When colleges and universities were forced to close, parents and students looked for tutoring through online learning sites. The demand for Edtech goods and services skyrocketed as a result. Another reason is Mobile Learning. A greater number of people, even those living in rural places, are now able to access online education because of the widespread use of smartphones and other mobile devices as well as the availability of reasonably priced high-speed internet. One other reason is that Edtech enterprises are valued at high levels; in 2021, an Edtech unicorn was valued at an average of $4.3 billion. This was a lot more than a unicorn’s typical valuation from other industries. The difficulty with Edtech businesses’ high valuations was that their financial performance did not support them. Edtech businesses were frequently valued more on their promise than on their current performance. Expectations not being met, investor fatigue and unsustainable expansion were some of the issues that resulted from this. 

What were the causes behind the burst?

-The pandemic’s end: As the virus has subsided, a growing number of pupils have resumed classroom instruction, which has decreased demand for Edtech services.

-Heightened rivalry: Many businesses are vying for a piece of the Edtech market, making it a congested field. As a result, there is now more competition, which is driving down margins and prices.

-Investor fatigue: Following years of massive capital inflows into the Edtech space, investors are beginning to get weary of the high prices and dearth of returns. Funding has slowed down as a result, which is hindering the expansion of Edtech businesses.

What is the future of Edtech?

Following the collapse of the bubble, investors exercised greater caution, which led to more reasonable expectations and valuations. To draw in funding, tech companies will in the future need to pass muster with investors.

-The collapse of the Edtech bubble will also result in a more streamlined Indian market, with only the most sustainable and profitable Edtech businesses remaining. This will lead to a more competitive environment where businesses will have to provide real value to customers.

-Online learning has become more popular in India and around the world as a result of the pandemic, and this trend is probably going to continue. This is caused by a variety of elements, including the rise in high-speed internet accessibility and the number of pupils searching for flexible and affordable learning options.


Although the Edtech bubble has burst, the industry in India still has a promising future. There are several indications that Edtech companies will be able to overcome the obstacles they confront, and the industry is ready for expansion. But to succeed over the long haul, Edtech companies need to concentrate on offering affordable, high-quality content together with regulation.