India’s edtech learns a lesson

Hello,

This week, public sector lenders SBI and PNB drafted a playbook to tap the country’s Rs 1.2 lakh cr ($14.3 billion) M&A market. This hints at large domestic banks actively structuring for a wave of buyouts and consolidations, while assessing financing and competitive appetite across sectors.

Meanwhile, the Indian central bank proposed a 70% cap on financing for acquisitions which would change transaction/sponsor economics. Let’s watch how this develops.

Also, KKR and ChrysCapital dominated the news: KKR is returning $350 million in carry after its Asia fund underperformed, spotlighting tighter LP scrutiny across the region. In contrast, ChrysCapital surged ahead, leading a ₹6,000 crore-plus bid for Nash Industries and closing a record $2.2 billion.

Finally, Blackstone might acquire 80.15% of Aadhar Housing Finance with regulatory approval.

I hope you enjoy this week’s roundup – please connect on LinkedIn to discuss your next M&A deal.

Let’s dive in.

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Market Trends

India’s edtech learns a lesson

When India’s edtech boom peaked circa 2021, the sector seemed unstoppable. The pandemic had forced 250 million students online, venture funding poured in, and valuations ballooned on the promise that digital learning would forever change education delivery. 

But like most pandemic darlings, the sector’s growth story is now undergoing a painful correction.

Globally, the market remains on a long-term growth curve. According to optimists, it might expand from $250.16 billion in 2024 to $721.15 billion by 2033, nearly triple its size as adoption deepens across preschool, K–12, higher education, and upskilling. 

Yet HolonIQ, in 2022, said global edtech VC funding had halved (49%) year-on-year to $10.6 billion, down from $20.8 billion in 2021. This was caused by the collapse of the mega-rounds of $100 million+ from 53 in 2021 to just 20 in 2022. 

India, which had been the third-largest recipient of global edtech capital after China and America, felt this correction deeply. It has attracted around $10.5 billion since 2021, but only around one billion in the past two years.

Still, India counts over 16,000 budding and growing edtech companies, of which more than a thousand are venture-funded, with cumulative funding at $12 billion. 

There have been three IPOs showing the ecosystem hasn’t gone to seed completely and what’s emerging are cash-efficient firms which might just outlast the overfunded giants.

Byju’s bubble

No story captures overreach better than Indian edtech firm, Byju’s. Once valued at $22 billion, the company’s collapse has become a Harvard study in hyper growth gone wrong. 

Its downfall stemmed from opaque governance and reckless acquisitions, such as WhiteHat Jr. and Aakash Educational Services, financed through debt. As post-pandemic demand waned, Byju’s failed to manage cash flow, delayed financial filings, and alienated investors. 

Layoffs, board exits, and lawsuits followed, a dramatic reversal for a company that once shone with startup ambition.

Byju’s also misread the market’s cultural shift: parents and students, fatigued by screens, began returning to offline coaching, exposing the fragility of edtech models that were purely digital and aggressively priced.

Regard PhysicsWallah: Founded by Alakh Pandey, PhysicsWallah represents the opposite end of business. Built on affordability and teacher-driven trust, PW reached profitability early by combining low-cost digital courses with offline study centres across Tier-II and Tier-III Indian cities.

While the $100-million it raised at a $1.1bn valuation (when it became a ‘unicorn’) in 2022 was modest, its fundamentals were stronger than Byju’s: positive cash flow, measured expansion, and deep student engagement. 

Comparatively, Byju’s raised over $5bn from investors including Tiger Global, General Atlantic, Sequoia, and Qatar Investment Authority deploying much of it for expensive acquisitions such as of Aakash, WhiteHat Jr., etc – before filing for bankruptcy. 

PW’s has planned its IPO for about a year from now. It could restore investor confidence in India’s edtech narrative.

From form to content (or scale to substance) 

Vanity valuations are giving way to sustainable business models anchored in meaningful, tangible values like pedagogy and teacher credibility, enabled by tech. With AI, adaptive learning, and varied Indian languages content, opportunity remains vast. Hybrid classrooms will remain indispensable. The edtech players that balance ambition with accountability will define the sector’s second act.

In other words, India’s edtech story may be shifting from scale to substance or from less heat to more light.