Why Investors Are Ditching EdTech for Brick-and-Mortar Schools

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5 Key Takeaways

• Investors are shifting focus from edtech to traditional offline schools and tuition centers after major losses in the edtech sector.
• Private equity firms see brick-and-mortar education as offering steady, recession-proof demand and attractive profit margins (20–30% EBITDA).
• Scaling physical schools faces challenges like high real estate costs, regulatory limits, and quality control issues, unlike the rapid growth seen in tech startups.
• The move towards 'education minus tech' could improve infrastructure and access but may risk trust and affordability if profit is prioritized over learning outcomes.
• Over $10 billion was invested in India's edtech boom (2020–2022), but enthusiasm for tech-driven education has sharply declined among venture capitalists.

Why Investors Are Now Betting on Old-School Education, Not EdTech
Remember when every other ad was for an online learning app? Just a couple of years ago, “edtech” was the hottest thing in India. Investors were pouring money into apps and digital platforms, hoping to revolutionize how we learn. In fact, between 2020 and 2022, a jaw-dropping $10 billion was invested in Indian edtech startups—more than the GDP of the Maldives!
But things have changed. After the initial excitement, many edtech companies struggled to deliver on their big promises. Some shut down, others laid off staff, and a lot of that investment simply vanished. Now, investors are looking elsewhere for steady returns—and surprisingly, they’re turning back to traditional, offline education.
Why the Shift?
The answer is simple: stability and profit. While flashy apps and online courses promised rapid growth, they often failed to make money. In contrast, brick-and-mortar schools and tuition centers have been around for decades. They offer something investors love: steady, recurring income from fees, and profit margins that can reach 20–30%. Plus, education is something families will always spend on, even during tough times.
Private equity firms are now buying up schools and coaching centers, betting that these “old-school” businesses are safer and more reliable than risky tech startups. The dream of “hypergrowth” through software has faded; now, it’s all about classrooms, communities, and credibility.
But It’s Not All Smooth Sailing
Of course, running physical schools isn’t easy. There are limits to how fast you can grow—real estate is expensive, government rules are strict, and maintaining quality is a constant challenge. Unlike apps, you can’t just “scale up” overnight.
There’s also a risk that if investors focus only on profits, they might cut corners on teaching quality or raise fees, making education less affordable for many families.
What Does This Mean for Students and Parents?
The good news is that more investment in offline education could mean better facilities, more access, and improved infrastructure. But it’s important to watch out for rising costs and to make sure that learning—not just profits—remains the top priority.
In short, the big money is moving away from digital learning and back to the classroom. The next chapter in Indian education might look a lot like the old one—just with a bit more polish (and a lot more investor interest).

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