EdTech Sector to Grow as Parents Spend More on Children A new consumer report shows that rising child budgets and stronger demand is pushing EdTech into its next phase, and brands are responding

A new consumer insights report, 'The Indian Consumer at 2030' by Fireside Ventures and Redseer, shows a striking shift in how Indian families are spending on their children. According to the report, urban parents now allocate around INR 5.6 lakh per child each year, and this amount is projected to rise to INR 7-8 lakh by 2030.

A significant portion of this "child budget" goes toward education and skill-building, making EdTech one of the biggest and fastest-growing beneficiaries of this shift. As families become more intentional about what children learn and how they learn it, EdTech is entering a fresh phase of relevance. This phase, however, looks very different from the first wave, which peaked during the pandemic.

More Budget, More Expectation

Families today want a more holistic combination of academics, communication skills, confidence-building, creative development, and quality exposure. Parents are also more deliberate about how and on what their children spend time online.

Shailendra Dhakad, Co-founder & CEO of Codeyoung, said that he sees this shift directly. "Today's parents are seeking not only academic support and achievement but also overall development, such as social and emotional learning, quality hobbies, and physical health. What we see now is that they are mindful of their kids' passive screen time and its harmful effects at an early age," he said.

Parents who can spend more are not simply looking for variety; they want depth, structure, better pedagogy, and clearer outcomes. This, in turn, is changing what EdTech must deliver, he added.

EdTech 2.0

The first wave of EdTech in India was built around online tuition and video-based preparation. However, EdTech today is evolving into an end-to-end learning ecosystem that must deliver strong design, continuous feedback, and measurable outcomes.

Pankaj Agarwal, Founder & CEO of Taghive, explained that the expectations have fundamentally changed. "Now, an edtech product has to be a well-rounded product," he says. "Earlier, it was very easy to build technology. But now consumers are becoming smarter, and they are demanding quality products. The willingness to pay has increased, which means the customer will pay more if the product quality is there," he said.

This shift means EdTech can no longer rely on being an accessible alternative to tuition.

At the centre of this new expectation lies the demand for personalisation. Agarwal calls it the ultimate goal in education. With AI and data-driven insights, platforms can now understand how each child learns, track progress in real time, and build adaptive learning journeys. "Personalisation is the holy grail in education delivery," he explains.

Recent reports also show that the EdTech sector is slowly strengthening again. For example, PhysicsWallah's upcoming IPO signals that demand for online learning, especially test prep, remains steady. Similarly, reports of the alleged upGrad–Unacademy merger suggest that the industry is entering a more stable and consolidated phase.

According to a recent IMARC Group analysis, the Indian EdTech market was valued at USD 2.8 billion in 2024 and is projected to surge to USD 33.2 billion by 2033, reflecting an estimated compound annual growth rate (CAGR) of 28.7 per cent between 2025 and 2033.

Tier 2 and Tier 3 India: The New Frontline of Growth

A major driver of EdTech's next phase is the rapid adoption in Tier 2 and Tier 3 cities. Rising disposable incomes, improved connectivity, and growing aspirations have turned these markets into high-intent segments.

Agarwal called metros "red-ocean markets," contrasting them with the wide-open opportunity in smaller cities. "In tier 2 and tier 3 cities, the edtech offering has not been so popular, but now companies are looking at these regions as new areas of growth," he added.

Dhakad echoed this shift. "We see strong demand from Tier 2 towns in the North of India, such as Punjab, UP, and Rajasthan… parents having disposable income want to invest in quality tools and resources for their kids."

Localised pricing, instalment-based payments, and regional content are also key to capturing these markets, the industry players have suggested. Over time, these cities have become highly competitive battlegrounds for EdTech firms.

AI, Personalisation and the Future of EdTech

EdTech's next decade will be shaped by the fusion of personalisation, better pedagogy and Artificial Intelligence (AI). Founders increasingly see AI not as a replacement for teachers but as a support system that helps detect gaps, adjust pacing, and enable differentiated instruction across classrooms of varying abilities.

Holistic learning is also emerging as one of the strongest parental expectations. Parents want meaningful engagement, structured experiences, and clear developmental value, not passive screen time. This has opened up new categories such as communication, creativity, emotional intelligence, sports-tech, and hands-on STEM learning.

Brands are responding by redesigning their programs to match this deeper, more well-rounded demand. EdTech in India is entering its most grounded and mature phase yet. With rising household budgets, clearer expectations, strong Tier 2-3 adoption, and the push toward AI-driven personalisation, the sector is becoming a core part of a child's learning ecosystem.