Edtech Emerges As The Most Sought After Industry For Student Entrepreneurs
The rise in smartphone users, as well as the change to digital learning paradigms, are propelling the industry forward. The sector was already booming, but due to the COVID pandemic, which forced a lockdown, the edtech sector has grown at an exponential rate.
The edtech sector in India has garnered the attention of investors from all around the world as a result of its rapid growth. The edtech market is expected to garner $16.1 billion in venture capital funding by 2020, a 32x increase from the $500 million it received in 2010.
Edtech is the most popular sector among student founders too in India, accounting for 5.6 percent of high resource campuses (HRCs) and 10.7 percent of medium resource campuses (MRCs), according to Campus Fund's report titled 'State of Student Entrepreneurship in India’. The study looked at 800 student-led startups from across the country.
Campus Fund invests in student-run businesses and provides mentorship and investment advice. Its first annual report covers the Indian student startup ecosystem from July 2020 to June 2021.
According to the survey,"Despite the fact that edtech is the most popular sector in terms of transaction inflows(16.3percent), it has one of the lowest through puts. Only 0.76 percent of edtech deals make it to the Investment Committee(IC)of Campus Fund."
Edtech is the most popular sector among student founders too in India, accounting for 5.6 percent of high resource campuses(HRCs)and 10.7percent of medium resource campuses(MRCs), according to Campus Fund's report titled 'State of Student Entrepreneurship in India
According to the survey, this could be because edtech appears to be a particularly attractive area for students interested in starting their own business because it is thought to be tech-light and scalable. According to the report, some entrepreneurs jump on the bandwagon without first determining the best product-market fit or developing the best go-to-market strategies.
Campus Fund found that areas including robotics and agritech, which have comparatively lower deal inflows, have the greatest throughputs at 8-9 percent, after reviewing more than 800 student-led firms across the country.
"This can be attributed to the fact that only those founders who have a very minutely planned product, a great team, and some industry experience attempt to break the perceived entry barriers," the report said. Furthermore, B2C firms were run by 59 percent of student entrepreneurs, and 30 percent of the startups that reached Campus Fund's IC were B2C businesses. B2B firms scored better at each filtration stage, according to Campus Fund.
Surprisingly, almost 70 percent of the companies reviewed were based in or operated from Tier 1 locations. Delhi NCR accounted for 26 percent of the total, followed by Bengaluru (21 percent), Mumbai (11 percent), Hyderabad (5 percent), and Chennai (5 perecnt each). However, about a third of these businesses were based outside of Tier 1 cities.
HDFC Bank, Bharat Shah, chairman of HDFC Securities, Phanindra Sama, creator of RedBus, and Raghunandan G, founder of TaxiForSure, are among the investors in Campus Fund.The Campus Fund (CF)is Asia's first and only Dorm Room Fund. Its distinctiveness stems from the fact that it not only funds studentled start-ups but is also run by full time students.
Richa Bajpai, a co-founder of Goodera, has launched Campus Fund, a new firm that will invest in student-led startups.Campus Fund, a first-of-its-kind initiative, will invest in 30 companies founded by students from IIMs, IITs, and BITS, among others. Students will be on the investment committee, and the average cheque size will be around Rs 50 lakh.
Although such a fund is new to the country, Dorm Room Fund and Creator Fund are examples of successful student venture models around the world. TaxiForSure co-founder Raghunandan G and redBus founder Phanindra Sama are among Campus Fund's backers.
"We are industry agnostic...but we prefer technology-first startups since we believe students have a leg up on the competition when it comes to cutting-edge technology. We're attempting to connect with student entrepreneurs all throughout the country "Bajpai stated.
After a startup has been sourced, it goes through three rounds of formal contact with its team members, who assess market size uniqueness, defensibility, scalability, and founder fit, among other things. The startup then pitches to an investment committee and is funded if it receives 60% affirmative votes. Campus Fund welcomes founders from any university in the country and from any field of study. We fund startups founded by current students, dropouts, or recent graduates within the last three years.Following the transaction, Campus Fund assists its portfolio with industry connections, mentorship, hiring, and venture capital reach, all of which are critical for a startup's success.
Grey Orange Robotics, Pixxel, and Ather Energy are just a few of the top innovative companies that have been created on college campuses. At the same time, most firms, such as Flipkart, Ola, and TaxiForSure, are started by classmates or friends from the same university.
Bajpai was a student entrepreneur herself. She co-created CSR technology platform Goodera in early 2014 and founded NextGen in 2009, during her final year of engineering. Bajpai stepped down in June of last year to return to school in London and came across the Dorm Room Fund concept.
Bajpai has a master's degree in business administration from London Business School. She is the founder of Campus Fund, Goodera, and NextGen, as well as an advisor to BlueKnot Partners and Creator Fund.
Apart from startups from IITs, IIMs, and BITS, the platform is seeing interesting startups from VIT, DU, Manipal, Bhartiya Vidyapeeth, Amrita University, MS Ramaiah, Dhirubhai Ambani CoE among others.