Indian ed-tech startups were just a few years ago hailed as torchbearers of change, innovation, and convenience. They promised to level the education field, bridge the learning gap, and revolutionize the traditional education sector. A surge of heavy funding, paired with the urgency of the pandemic, helped ed-tech startups in India grow rapidly.
As the dust settled, a different picture emerged. Entrepreneurs who once promised to revolutionize learning for millions are either scaling down or shutting operations completely. Investor sentiment has settled, and founders are revising strategies. The numbers paint an even more discouraging picture. 2,780 Indian ed-tech startups have shut down in the past decade, with 2,150 ceasing operations between 2020 and 2024 alone.
Pandemic and Ed-Tech’s Short-Lived Boost
Indian ed-tech startups saw an unnatural rise as a result of the COVID-19 outbreak. While the nation was under lockdown and schools were shuttered, these online education platforms saw an unanticipated spike in users. As their values increased, startups like Vedantu, UnAcademy, and Byju’s made billions of dollars.
Necessity drove the surge, not lasting consumer preferences. As the pandemic ended and authorities lifted the lockdown, the cracks began to show. Parents sent their children back to school, coaching centers resumed operations, and users unsubscribed and deleted these online learning platforms. Funding for edtech startups plunged by 88% year-on-year, falling to $283 million in 2023. As the artificial demand started shrinking, companies struggled to explain their inflated valuations.
When Growth Overtakes Profitability
Most Indian Ed-Tech startups made the common mistake of chasing growth over profitability. The companies spent heavily on campaigns, discounts, and advertisements. The amount invested in getting a customer was far more than what they got from that customer. Instead of building a strong financial foundation, the focus was shifted to flashy numbers and metrics. App downloads, number of students enrolled, and number of views were highlighted. India’s five ed-tech unicorns, Unacademy, PhysicsWallah, Vedantu, Eruditus, and upGrad, collectively spent over ₹2,250 crore on advertising and promotions in 2022 alone.
The industry’s fixation on total addressable market projections overlooked the actual behaviour of Indian consumers. Despite the country’s massive student population, the willingness to pay for digital education remained limited, especially when free alternatives existed.
Quality Over Convenience
The ed-tech downturn has highlighted the irreplaceable value of traditional classroom learning and offline coaching centers. Studies conducted by educational research firms have consistently shown that students in physical classrooms demonstrate 23% better retention rates. Digitally simulating the human element of teaching remains challenging. Because they provide individualized attention, peer rivalry, and controlled learning environments that apps just cannot match. Offline coaching centers like Allen, Aakash, and Narayana have managed to hang onto their market share. In contrast to even the most advanced AI-powered platforms, teachers in physical settings can modify their teaching strategies in real-time.
The Byju’s Effect
Byju’s ascent and decline serve as an example of the larger issues facing India’s Ed-Tech sector. With a valuation of over $22 billion, Byju Raveendran’s Bangalore-based business was once the bright spot of India’s Ed-Tech industry. However, its rapid expansion was accompanied by a number of issues. The company began going public due to excessive spending, its ambitious expansion strategy, dubious sales tactics, and growing losses.
What occurred to Byju’s rocked the entire ed-tech industry. In 2023, BYJU’S encountered several challenges, including layoffs and legal troubles, which had a domino effect on the edtech sector. Funding for the sector stagnated, and confidence declined significantly.
Mass Layoffs and Broken Hopes
The wave of mass layoffs that followed the sector’s correction severely impacted the ed-tech workforce. In its most recent wave, Unacademy alone eliminated 250 jobs, joining the 1,000 workers it had already let go during earlier reorganizations. Throughout several rounds, BYJU’S laid off almost 2,500 workers, and Vedantu laid off 624 workers. According to industry estimates, between 2022 and 2024, prominent ed-tech companies together laid off about 10,000 staff.
The data reveals a troubling pattern in termination distribution: marketing and sales departments bore the brunt, accounting for approximately 60% of all layoffs, followed by content creation teams at 25% and technology roles at just 15%. This lopsided impact exposed how heavily these companies had invested in customer acquisition machinery rather than core product development, with some firms spending up to 80% of their budgets on marketing during peak growth phases.
Vedantu, UnAcademy, upGrad and Others
The financial data from major ed-tech companies reveals that the crisis is beyond just layoffs. Unacademy’s losses extended to ₹2,849 crore in 2023, a 57% increase from the previous year, while its revenue declined by 32% to ₹591 crore. Vedantu’s financials declined even more, with the company spending ₹466 crore in 2023 against revenues of just ₹57 crore, representing a staggering loss-to-revenue ratio of 8:1. UpGrad, despite its positioning in the higher education segment, saw its consolidated losses surge to ₹1,200 crore in FY23, while its revenue growth slowed to single digits after years of triple-digit expansion.
Even the once-promising PhysicsWallah, which had maintained profitability for years, reported its first-ever losses of ₹318 crore in FY23 as it scaled operations. These numbers underscore how the entire sector’s unit economics were fundamentally flawed, with companies burning cash at unsustainable rates while struggling to generate meaningful revenue per user.
The Regulatory Awakening and Accountability Crisis
The ed-tech sector’s troubles have also exposed deeper issues around regulatory oversight and corporate governance that were previously overlooked during the growth euphoria. The Ministry of Education has now initiated stricter guidelines for online education platforms, including mandatory disclosure of teacher qualifications, course completion rates, and refund policies. Consumer protection agencies have received over 15,000 complaints against ed-tech companies in the past two years, ranging from misleading advertisements to predatory lending practices targeting parents.
The lack of standardized curriculum and assessment methods in online platforms has raised questions about the actual learning outcomes delivered. Many companies inflated their success metrics by counting free users and trial subscribers as “active learners,” creating a false narrative of impact. The sector’s reckoning has also brought to light the questionable practice of selling expensive courses to parents from lower-income backgrounds through aggressive sales tactics and easy EMI schemes, often without clear disclosure of the total cost involved. This regulatory awakening signals a shift toward more accountable and transparent business practices, but for many companies, these changes have come too late to salvage their operations.
The crash of ed-tech in India isn’t just a failure; it’s a lesson. The companies that survive this shake-up will be the ones that understand the Indian consumer, keep spending under control, and offer real value to students and teachers. Instead of trying to “disrupt” education, the future may lie in working alongside traditional systems, not against them. The race for scale is being replaced by a more thoughtful approach, where niche solutions and quality matter more than hype. The rise and fall of Indian ed-tech is a reminder that bold ideas and big funding aren’t enough. Long-term success takes local insight, smart strategy, and, most importantly, respect for how people learn.
