Certain parts of edtech were overvalued due to overestimation: Eruditus’ Ashwin Damera

Ashwin Damera, Co-founder and CEO of Eruditus, one of India’s highest-valued edtech companies, said that during edtech's heydays certain parts of the overall ecosystem were overvalued as founders and investors overestimated the market.

“Certain parts of edtech, especially K-12 (were overvalued). People thought schools are shut, everything is online, and they over-indexed to that, and once Covid receded, offline has come back,” said Damera in a panel discussion with YourStory Founder and CEO Shradha Sharma at TechSparks 2024 in Mumbai.

“Test-prep, very interestingly, continues to do well. It is the offline players who have gone from strength to strength, and there, we could actually say, that perhaps valuations have increased," Damera added.

Damera’s comments come at a time when funding to the country’s edtech sector has dropped from over $5 billion in 2021 to under $750 million in 2023, according to data available on Tracxn. In fact, funding to the K-12 segment, which had topped $4 billion in 2021, dropped under $300 million last year. With funding to edtech falling, valuations have also dropped substantially across verticals. 

Moreover, the K-12 segment has suffered the most amid worsening woes for BYJU’S, which was once India's most-valued edtech startup. However, Damera said that the higher education segment has largely remained insulated from the funding winter.

“I always tell people that the higher edtech segment is a secular goods story. The biggest impact of Covid is not on demand, its not like suddenly people started taking courses. It (impact of Covid) is on the supply side. Our universities realised that they have to be online,” he said.

“IIT Madras realised that a bachelor’s (degree) in business analytics or data science is something that they must do and that has led to some of our growth and that must continue. Some fuzzy valuations have happened, but in higher edtech and test prep, growth will continue for years to come."