Education technology or EdTech, is one of the most exciting sectors in the economy, with the potential to impact billions of lives. We are on the verge of a revolution in the adoption of these technologies, impacted by the Coronavirus. Most of the students have been undertaking classes from home through digital tools, educators have shifted towards digital delivery of education. The EdTech market was a rising tide before the pandemic but Coronavirus has been a tidal wave that has accelerated the adoption of technology and the firms are expecting the trend will remain at higher levels after Coronavirus passes.
The crisis has shrunk the investment appetite for startups globally and the venture capital (VC) investments in India have fallen sharply to $2.2 billion in the first quarter of the year, according to KPMG’s Venture Pulse report. However, startups in Ed-tech and gaming will attract VC funding as they were already gaining stream pre-COVID-19 and the lockdown has further accelerated adoption in India. Deep tech will continue to attract investments as most business models have enterprise clients and there are tailwinds in the B2B segment.
As said by Rohit Sood, Investment Professional at Bertelsmann India Investments, India has done well against other emerging markets and continues to find allocation among global investors. India’s recovery cycle from the imminent recession and the investor sentiment towards China will be impacting this trend.
The startups in Ed-tech, gaming, digital health, SaaS, direct-to-consumer brands, SME tech, and agtech are having higher than usual business these days. Products and services which help to digitalize SME has become an interesting space, especially given the massive economic role played by SME in India and Southeast Asia.
Consumer and industry adoption of digital and digitalization of businesses accelerated the consumer behavior changes that could have taken five to ten years. This is especially evident in the uptick we are seeing in hyper-growth segments like online learning, gaming, and digital health.
Indian gaming startups are another segment witnessing a skyrocketed increase in user engagement. The digital products that can reduce costs and drive efficiency, improve collaboration, enable remote work, and enable all things contactless, will become essential for every business in the world and each of these areas will lead to a large number of new Indian startups.