VCs conservative on edtech, content firms: Coursera CEO
NEW DELHI : The downfall of Byju’s, once a $22 billion giant and India’s leading edtech startup, has sent ripples across the tech industry, triggering caution among venture capital (VC) and private equity (PE) funds. This has let to a persistently challenging market, Jeff Maggioncalda, chief executive officer of US-based edtech firm Coursera, said in an interview with Mint. “How the Byju’s crash affected the overall edtech industry depends on the stage each company is at, and where in edtech it caters to. Edtech in India and China are not looking good these days.
China had their policy changes, and India has had challenges, too. From during the covid-19 pandemic and now, financing went from as much money as one could ask for at incredibly high valuation, to much higher conservatism," Maggioncalda said. The worst, according to him, are content creator-based edtech startups.
“No investor will presently invest in local content firms—the language is no longer a differentiator, and neither is content domain expertise. New startups have no distribution, making this one of the worst segments to be in—especially in edtech’s parlance," he added. In early 2022, Byju’s was gearing up for an initial public offering (IPO) with a reported valuation of about $40 billion.
However, it witnessed a swift downturn in its fortunes the following year. On Thursday, BlackRock slashed Byju’s valuation to a mere $1 billion, down by over 95%. The investment firm, which holds a 1% stake in the edtech firm, however, did not offer a reason behind the sharp devaluation of what was once India’s startup poster boy.
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