IFTA 2026: India has voted. See the winners.

Edtech funding is down 95 per cent, Kota is half empty, and 31 per cent fewer Indians are studying abroad.

By Neha Mittal

Updated on September 24, 2026
IST 5:41 am

Indian edtech raised US$4.3 billion in 2021.

In the first eight months of 2026 it raised US$214 million, according to data platform Tracxn.

That is a fall of about 95 per cent — and it is only the most visible of three simultaneous contractions in how Indians buy education.

The funding collapse, in proportion

A 95 per cent decline sounds like sector failure. It is closer to a return to baseline.

2021 was not a normal year for Indian edtech. Schools were shut, every household with a child and a smartphone became a customer overnight, and global capital was cheaper than it had been in a generation. Valuations were set on the assumption that the shift was permanent.

It was not. Schools reopened, engagement fell, and the businesses were left with cost structures built for a demand curve that had disappeared.

What is left standing is smaller, more focused on sustainable business models, and concentrated in test preparation, upskilling and school software — categories with a defined buyer and a measurable outcome. That is a healthier sector than 2021 produced. It is also a fraction of the size.

Children studying together in a classroom

The Byju's endgame

The clearest illustration of how far the correction went is what has happened to the company that defined the boom.

In Byju’s insolvency proceedings, the resolution professional of group company Byju’s K3 Education told the tribunal that assets worth about ₹150 crore had been auctioned for about ₹16 crore. On 31 August 2026, the National Company Law Tribunal in Bengaluru ordered status quo on the auctioned assets.

Two points of accuracy, because this case generates a lot of loose reporting. A status-quo order is not a finding of wrongdoing; the tribunal has frozen the assets pending scrutiny, the ownership of the assets is itself disputed, and the matter is unresolved. And a distressed sale price legitimately diverges from a book valuation — that is what distress means.

Still, roughly a tenth of the claimed value is a wide gap, wide enough that the tribunal wanted to look at it. For a company once valued in the billions, the recovery arithmetic is now being argued in crores.

Kota, at half strength

Kota’s coaching enrolment has fallen from 2 to 2.5 lakh students to somewhere between 85,000 and 1 lakh.

Roughly a halving, in a city whose entire economy — hostels, mess kitchens, transport, stationery, rentals — was built on the larger number.

The causes are layered. Online and hybrid coaching removed the necessity of relocating. Coaching chains opened branches in the tier-2 cities that used to supply Kota, keeping students at home. And the sustained reporting on student deaths in Kota changed how families weigh the decision — not universally, but enough to move the aggregate.

The entrance exams have not become less competitive, and JEE Main’s January 2026 session drew record attendance, according to NTA data. Kota itself saw admissions rise an estimated 20–30 per cent in early 2026, but that is a partial rebound from a much lower base. What has changed is that the single-city model for preparing them is no longer the default.

Students abroad: down 31 per cent

The number of Indians going abroad for higher education fell about 31 per cent between 2023 and 2025, from over 9.08 lakh to 6.26 lakh, according to Bureau of Immigration data placed before the Rajya Sabha.

This one is almost entirely a policy story, and not Indian policy.

Canada capped study permits and tightened the post-graduation work pathway. Australia tightened financial and English-language requirements and refused more applications. The UK removed the ability of most taught-masters students to bring dependants. The United States saw higher visa refusal rates, long appointment waits in India and uncertainty over work visas.

The Indian overseas-education market was never primarily about the degree. It was about the work rights and the pathway attached to it. When four destination countries narrowed that pathway within roughly the same window, the value proposition changed — and the cost of an overseas degree only makes sense against the pathway.

Demand has not vanished; it has shifted toward Germany, the Gulf and, increasingly, domestic options.

What is actually growing

Three things are expanding while the headline categories contract, and they are connected.

Domestic higher education at the upper end. Private universities, the IITs and the IIMs are the obvious home for students who three years ago would have gone abroad. Whether capacity and quality have grown to match is a separate and much less settled question.

Vocational and skills training. Unglamorous, cheap, employer-linked, and the one segment where enrolment tracks hiring demand rather than aspiration.

Test-prep, restructured. Hybrid, regional-language, priced at a fraction of the old Kota package, and selling to families who could never afford relocation in the first place.

Why this is not simply a crash

It is tempting to read three contractions as a sector in decline. The more accurate reading is that three expensive intermediaries got squeezed at once.

Venture-funded edtech was an intermediary between students and content. Kota was an intermediary between students and exams. The overseas degree was an intermediary between students and a labour market.

Each charged a substantial premium for that intermediation. Each is now being priced against cheaper alternatives — online delivery, local branches, domestic institutions — that did not exist at scale five years ago.

The underlying demand has not gone away. Families are spending in different places, and the places they left were the expensive ones.

What to watch

Three things will determine whether this is a healthy correction or the start of something worse.

Whether domestic capacity actually absorbs the returning demand. If private universities expand enrolment without expanding faculty and placements, the students who stayed home will have been worse served than the ones who left.

Whether the surviving edtech companies stay disciplined. The sector’s failure mode is buying growth. Cheap capital returning would test that quickly.

Whether destination countries reverse. Immigration policy moves in cycles, and a single change in Canadian or British policy could send the overseas number back up within two admission cycles.

Nothing in the current data says Indian education is shrinking. It says the expensive way of buying it is.

Funding figures are January–August 2026 against calendar 2021 (Tracxn). Insolvency details reflect proceedings as reported to the National Company Law Tribunal; the matter is pending and no findings have been made. Coaching enrolment figures are industry estimates for Kota specifically and are not precisely audited.