New Delhi: India’s EdTech boomed in 2021, but now it is moving away from that ‘growth-at-all-costs’ funding boom. According to a new report by market intelligence platform Tracxn, the companies are now focusing more on profitability, consolidation and offline expansion.
The report, From Funding-Led to Model-Led: Indian EdTech’s Next Phase, was released on Thursday. It has found that annual funding in the sector fell from $4.3 billion in 2021 to $214 million in the first eight months of 2026.
However, the fall in funding doesn’t mean that companies raising money are getting smaller cheques. The median funding rose to $1.1 million in 2026, nearly twice the typical round size in any of the previous five years.
The round of funding has also fallen. In 2021, it was 368 rounds, and now, in September, it was only 36.
“Fewer companies are raising capital each year, but the ones that do are raising larger, more considered amounts,” states the report.
This change shows how India’s EdTech companies are building businesses.
One of the biggest EdTech platforms, Physics Wallah, raised $ 275 million in total funding, expanding its physical presence in the market with an offline institute.
According to Fortune India, it had 353 offline centres across India and the UAE by the end of FY26. Its offline enrolments rose to about 470,000 students.
Also read: 33,000 participants, 1,100 prototypes—3 AI solutions take on Bengaluru’s traffic
From funding-led to model-led
Unacademy, another big player in the EdTech sector, had moved in the opposite direction. It has converted its company-operated centres into franchise partnerships as it focuses on profitability. The company was acquired by upGrad in an all-stock deal cleared by India’s competition regulator in July 2026.
The report highlights the growing role of public markets and acquisitions. India’s EdTech sector recorded 94 acquisitions and seven public listings between 2021 and 2026. Five of those seven listings took place between July 2025 and November 2025.
Physics Wallah stands out among the sector’s most heavily funded companies. Despite raising the least among the top six at $275 million, it was the only one in that group to go public, reaching a market capitalisation of $3.6 billion at its IPO.
The report said the sector is now moving “from funding-led to model-led” growth, with companies increasingly relying on offline centres, franchise models and partnerships with universities rather than online delivery alone.
(Edited by Saptak Datta)