After a year’s hiatus, GSV Ventures plans to invest in Indian edtech in 2025

GSV Ventures, which invests exclusively in global edtech companies, will sign two new deals, including one in India, expected to be announced in 2025, Quazzo said Mint.

Despite the positive outlook for the Indian market, the venture capital firm did not make any new investments in Indian edtech in 2024, limiting its activities to a follow-on investment in Physics Wallah.

As of February 2023, it has invested approximately $90 million in more than 10 Indian startups including Physics Wallah, Classplus, Lead and AdmitKard. Mint reported earlier.

To be sure, India’s edtech industry faces a challenging two years, characterized by falling investor confidence as demand for online learning recedes post-pandemic, mounting losses from aggressive growth strategies, and The collapse of industry giant Byju’s.

Meanwhile, the global edtech investor manages $800 million worth of assets, including a stake in Coursera, and has continued to invest in U.S. edtech companies such as Leland, Uplimit and Doowii this year.

renewed interest

However, 2025 will see a broader revival in investor activity in the Indian edtech sector, Quazzo said. Expectations that Physics Wallah’s public listing in 2025 could pave the way for a flood of liquidity next year have spurred renewed interest in the Indian market.

“The US market has become a market where only very large companies can go public, whereas in India the market is very receptive to strong companies that don’t need billions of dollars,” she said.

Kwazo added that growth, profitability, good fundamentals and strong governance are important for public listings in India.

Mint It was reported in October that several venture capital firms were encouraging some of their flagship assets, even early- or mid-stage startups, to go public. “This will be a very attractive option for edtech companies,” Quazzo said.

She expects three to four of their portfolio companies to plan to go public within the next 24 to 36 months.

As of December 9, 2024, as many as 76 companies have gone public, selling shares worth $1.34 trillion, Mint The report cited data from the Prime database.

Positive financing environment

Varun Gupta, managing director and head of Southeast Asia digital and technology investment banking at Avendus, agrees that there has been renewed interest in the space this year thanks to several large funding deals in the sector.

Physics Wallah raised $210 million in September, while Eruditus raised $150 million in October. Total funding in the industry surged from $245.8 million in 2023 to $608.9 million in 2024, according to analytics firm Tracxn.

“Good results from the top three to four assets in the space in terms of good recent funding rounds and IPOs in the coming years will pave the way for continued interest in quality assets in the space,” Gupta added. .

However, Quazzo expressed concern about fewer startups coming forward to raise funds. “We’re not seeing as many startups as we normally would. Part of that is because the availability of capital isn’t as strong – capital tends to attract more startups,” she said.

“Another factor is concern about whether companies can find a space that won’t be disrupted by products from OpenAI, Google, Anthropic or others that could put them out of business,” she added.

The venture capital firm is exploring additional investment opportunities at the intersection of artificial intelligence and education.

“We’re focused on what kind of moat you can build around AI… We’re trying to figure out where you might have a protected and proprietary place to build a business without being subject to larger lateral The impact of being one of the participants. Incredible distribution and scientists,” she added.