New Delhi, September 03: India’s EdTech industry is getting more selective and business model driven. The average deal size, public listings and acquisitions are gaining significance as overall funding has declined significantly, says a new Tracxn report.
Tracxn’s From Funding-Led to Model-Led: Indian EdTech’s Next Phase report shows that total funding for EdTech fell from approximately $4.3 billion in 2021 to $214 million in the first eight months of 2026. Even with this decline, the median funding round grew to $1.1 million in 2026, almost double the average deal size from the previous five years.
The number of funding rounds dropped from 368 in 2021 to 36 in the first 8 months of 2026. The money is now directed at fewer companies. For example, BYJU’S made up 94% of the sector’s total funding in 2023 with a single $250 million round.
The sector experienced seven IPOs and 94 acquisitions in the period 2021-2026. Five of these IPOs occurred in a five-month span, from July to November 2025, with market caps between $10 million and $3.6 billion.
Physics Wallah has raised $275 million, the smallest amount of all the top 6 funded EdTech companies in India. It was the only one of the six to go public, however, and had a market capitalisation of $3.6 billion when it went public in November 2025.
In July 2026, India’s competition regulator approved an all-stock acquisition of Unacademy by upGrad. At the same time, BYJU’S parent company, Think & Learn, is still going through insolvency proceedings.
The report also mentions a shift from online learning.
At the end of FY26, Physics Wallah operated 353 offline centres in India and UAE, compared to 198 in the previous year. Offline enrolments reached about 470,000 students.g Unacademy has switched its company-run centres to franchise partnerships. On the other hand, upGrad and Eruditus are expanding by tying up with universities.
From 2021 to 2026, K-12 EdTech made up 51% of sector funding. Continued Learning was 26% and Higher Education Tech was 17%.
The sector is also grappling with new regulations, including the Digital Personal Data Protection Rules that must be complied with by May 2027 in India. The government has also announced free online coaching for competitive exams, which could increase competition in the test-prep market.
