India has become the most important market for edtech-focused venture capital (VC) firm GSV Ventures, said its founder Michael Moe, exuding confidence in the country's edtech ecosystem, which is currently struggling with a range of issues including slowing demand and a worsening funding winter.
GSV Ventures, which has backed three of the country's seven edtech unicorns and three soonicorns (companies on the verge of becoming unicorns), will also be looking to set up an office space in the country to have a local presence, making it easier for the company to explore investments, Moe told Moneycontrol in an interview on the sidelines of the GSV Emeritus Summit.
“What I can tell you is the more I come here, the less I know. The reason for it, is because its (India's market is) complex and the only way we are ever going to really know it is by being here,” said Moe.
“We have an office in Abu Dhabi, which is like a short flight from here, but unquestionably we will be here (in India), have a physical presence in this large, complex but most important market for us. Its not just one important market for us but rather the most important market for us,” he added.
Moe’s optimism about India’s edtech sector contrasts sharply with the sector’s overall sentiment, as investors have stayed away from it in the last ten months. According to Tracxn data, edtech funding nearly halved to $3.12 billion in 2022 from the previous year. Most edtech companies, particularly consumer-facing edtech companies, have experienced a post-Covid pullback. With funding and demand slowing, edtech companies have laid off thousands of employees since last year.
Moe, however, believes that this is just a phase and it will pass. He said that GSV Ventures would continue to aggressively invest in edtech companies across categories including higher education, employment, K-12 (kindergarten), and test prep platforms. GSV Ventures also announced a Rs 50 crore investment in AdmitKard, an end-to-end admission services platform for students who wish to study abroad, at a post-money valuation of Rs 250 crore during the Summit.
“Nowhere in the world you have news publications headlining students doing well, that happens only in India. So learning is in their culture. There’s no other place that is as compelling as India for investments,” Moe said.
“Today we have put about $100 million in India. We have invested in about 11 companies. We are an early-stage investor and I believe that we have put in a significant amount of capital in the country. There’s no specific amount that I am earmarking, but I can say this space is significantly going to grow,” he added.
Moe also said that he believes that in a market like India, which is typically a low-income market, companies that can provide students with affordable education will fare well. He said that edtech companies should focus on subsidising and, in some cases, providing services for free in order to serve as a consumer acquisition engine.
He also said that Indian edtech firms should improve their content in order to increase student engagement. He believes that there is a lot of room for companies to innovate their offerings in order to keep students interested in their content.
“You cannot learn anything if you are not paying attention. We have a theme called visual learning, where we have something that students love. What do students love, they love to watch movies, so we have something called Hollywood meets Harvard. Perhaps you can have something called Bollywood meets whatever is the biggest university in India,” Moe said.
