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India’s edtech sector, once the poster child of the pandemic boom, is undergoing a deep reset as investors and founders confront the limits of the online-only education model. The ongoing wave of mergers and acquisitions marks both a reality check and a potential path towards sustainability in a sector that has seen valuations tumble and funding dry up over the past two years. “Edtech had its best run during Covid as demand surged and valuations commanded a premium,” said Anil Joshi, Managing Partner at Unicorn India Ventures. “However, when the world returned to normal, many online-only models struggled with business sustenance. The correction was normal and anticipated due to lack of a sustainable business trajectory.” What is unfolding now, Joshi said, is not distress but evolution. “M&A in general happens to fill the gap in offerings. It’s a natural phenomenon to merge rather than build, and this is a good indication for the industry as it will help make businesses more sustainable as combined entities.” Venture participation in edtech has slowed considerably as investors turn cautious amid uncertain monetisation and slower growth. Yet, segments such as upskilling and competitive exam preparation continue to attract interest, thanks to clearer revenue visibility. “As models stabilise and see acceptance with a wider customer base, investor interest will revive. Education remains a large market and India’s demographics make it hard to ignore,” Joshi said. The recalibration is most visible in the latest consolidation buzz: reports suggest UpGrad is in talks to acquire Unacademy for around $400 million — less than half of the $900 million Unacademy has raised so far. The deal, if completed, will underscore how sharply valuations have corrected and how consolidation has become the sector’s most viable exit path before growth and IPO appetite return. Published on November 7, 2025
