New Delhi, Sep 4 (IANS): Total funding in the Indian edtech sector plunged 48 per cent this year, compared with the same period in 2022, and declined by 50 per cent against the same period in 2021, a report showed on Monday.

Only one over $100 million funding round took place this year (till August 7).

Most of the funding into the domestic edtech startups so far was secured in the second quarter, at $713 million, accounting for 73.4 per cent of the total funding raised this year, according to the data provided by Tracxn, a leading SaaS-based market intelligence platform.

The edtech market has been facing challenges attributed to decreasing demand for online education, ongoing funding constraints, rising interest rates aimed at controlling inflation, and economic uncertainties.

The number of funding rounds in 2023 experienced a drop of 77 per cent and 82 per cent, respectively, with the same period in 2022 and 2021.

Late-stage investments worth $879 million were recorded in 2023 so far, contributing to more than 90 per cent of the total funding, which is also a drop of 23 per cent compared with $1.14 billion raised in the same period in 2022.

Early-stage investments worth $75.7 million were recorded in 2023 (year-to-date), an 88 per cent drop from $618 million raised in the same period last year, the report showed.

No new unicorns emerged in this sector this year, as against two new unicorns in the same period last year.

Among cities, Bengaluru takes the lead in terms of total funds raised till date, followed by Mumbai and Gurugram.

In the last two years, We Founder Circle, Peak XV Partners and MMPL Trust, were the most active investors in this space. We Founder Circle, IPV, and LetsVenture were the top seed investors, while Peak XV Partners, Better Capital, and AngelList were the top early-stage investors.

MMPL Trust, WestBridge Capital, and The Chan Zuckerberg Initiative were the top late-stage investors, the report said.