Ed-tech startups witness massive jump in VC investments in H1 2020

Date posted: Wednesday 22 July 2020

In the first six months of 2020, venture capital firms (VCs) have shown a clear preference for ed-tech startups with $795 million raised compared to $108 million in the year ago period. While the number of deals hasn’t increased drastically, it is the only sector apart from healthcare to report a growth in number of deals according to data from Venture Intelligence research. Other sectors largely raised funding before the full impact of the pandemic started began to play out April while ecommerce reported a 70% dip in deal sizes and half the number of deals compared to the same period last year. As of H1 2020 (data till 26 June), there have been 272 deals raising $4.1 billion across sectors compared to 393 deals worth $4.6 billion during H1 2019. H2 2019 reported a much better performance at 356 deals worth $5.4 billion. In H1 2020, most sectors raised funding before the full impact of the pandemic started in April. In response to schools being shut due to the covid-19 crisis and lockdowns, ed-tech platforms have stepped in to fill the gap in live classes to further student engagement showing some prospects to investors as well. Going ahead, experts are of the opinion that investments in startups will increasingly sway in favour of late stage companies, with strong unit economics, over first time founders who are still trying to stabilize their model.

(Live Mint)

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