I will be shattered if another billion dollars comes to education startups: Ronnie Screwvala

UpGrad founder Ronnie Screwvala

Edtech startups don't need the kind of money that investors pumped into them and the sector will grow irrespective of whether it finds favour with VCs yet again, Upgrad founder Ronnie Screwvala told Moneycontrol.

"This entire sector will grow regardless of whether VCs come or not… I will be very shattered if another billion dollars comes into this sector, it will spoil the sector all over again. Right now, solid companies are being built," he said.

Upgrad, an online platform for upksilling and higher education degrees, itself has raised $265 million to date, according to the company.

Its last funding round was in 2022 when it raised $210 million at a valuation of $2.25 billion, led by ETS Global, one of the world's largest providers of global entrance tests like GRE and TOEFL, and Bodhi Tree, an investment vehicle set up by media veterans Uday Shankar and James Murdoch, among others.

However, the ongoing funding winter and Byju’s woes have collectively hit the Indian edtech ecosystem hard.

As a result, funding into the country’s edtech industry, which had been a standout performer during the pandemic, dramatically plummeted to $712 million in 2023, down from $5.33 billion in 2021 and $2.9 billion in 2022, according to data by Tracxn. Last year, the number of funding rounds in edtech companies slumped to 69 from 364 in 2021 and 242 in 2022.

“Fifty percent of the whole dark clouds has been on this one company. And that can't kill an entire sector. Edtech was invented by the Byju's and the Unacademys of the world because they wanted to raise money. Today, if you want to go out and raise money, everyone will say Ed-AI,” said Screwvala.

According to Screwvala, the K-12 segment of the edtech sector has attracted disproportionate attention and funding, whereas most of the value lies in upskilling as employers are increasingly recognising and rewarding certifications from online platforms.

“The K-12 sector  ran away with the headlines, unfortunately. It is the lowest outcome and impact sector, whether we like it or not. Fundamentally, the K-12 sector can get disrupted the least because schooling as a curriculum hasn't changed in 100 years around the world. And, it's not going to change,” he said.

“You can only do augmented but it is not a business that is huge, except when it comes to test prep. So, the context of K 12 is augmented, and that's a very soft feeling. You can't measure outcomes. The ROI is low, and fundamentally, the spender is the parent,” he added.