Edtech most popular sector among student founders, says Campus Fund report

Chennai: The most popular sector among student founders in India is edtech, which dominates with a 5.6% share in high resource campuses (HRCs) and 10.7% in medium resource campuses (MRCs), Campus Fund said in its report titled 'State of student entrepreneurship in India'. The study evaluated 800 student-led startups across the country.

Campus Fund invests in startups run by students, and also offers mentorship and guidance on investing. Its first annual report provides a snapshot of the Indian student startup ecosystem from July 2020 to June 2021.

The report said, "Although edtech is the most common sector in terms of deal inflows (16.3% of inflows go to edtech firms), it has one of the lowest throughputs. Only 0.76% of edtech deals make it to the Investment Committee (IC) of Campus Fund."


The report suggested that this could be because edtech looks like a very lucrative sector to students looking to venture into entrepreneurship as it is considered to be tech-light and scalable. It said that some founders jump the bandwagon without identifying the optimal product market fit or devising the best go-to-market strategies.

After evaluating more than 800 student-led startups across the country, Campus Fund said that sectors like robotics or agritech, with comparatively lower deal inflows, have the highest throughputs at 8-9%.

"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.

Further, 59% of student entrepreneurs ran B2C businesses and 30% of the startups that reached Campus Fund's IC were B2C startups. Campus Fund added that at each filtration stage, B2B startups fared better.

Interestingly, about 70% of all startups that were evaluated operated in or from Tier 1 cities. Delhi NCR accounted for 26%, followed by Bengaluru at 21%, Mumbai at 11% and Hyderabad and Chennai at 5% each. However, almost one-third of these startups were outside Tier 1 cities.

"This indicates that there seems to be a gradual shift towards building for Bharat, for the next generation of customers who are going to become first-generation users of these products. It also shows how entrepreneurship as an aspirational value has entered the bloodstreams of students in Tier 2 and Tier 3 cities," the report said.

Campus Fund is backed by the likes of HDFC Bank; Bharat Shah, chairman, HDFC Securities; Phanindra Sama, founder, RedBus; and Raghunandan G, founder, TaxiForSure, among others.