Not Just Hype: What Investors Really Think About AI in Indian Education At a time when Artificial Intelligence (AI) continues to dominate many facets of life, the education technology sector is emerging as one of the more promising ones.

At a time when Artificial Intelligence (AI) continues to dominate many facets of life, the education technology sector is emerging as one of the more promising ones.

Kobi Gal, Professor at the Department of Software and Information Systems Engineering, Ben-Gurion University, Israel and Ganapathy Venugopal, Co-founder and CEO of Axilor Ventures, spoke about untangling the reality of AI's role in education, its adoption hurdles, and whether it presents a true investible opportunity in India at the IGIS 2025 event.

"I approach this session with some kind of skepticism," said Venugopal, cautioning against buying into the hype surrounding AI's revolutionary promise. "We've heard a lot of AI this, AI that. But as a student of technology trends for over two decades, I've learned to take a step back. Not every tech turns out to be transformational in the way we expect it to be."

While AI has been heralded as the next leap in educational innovation, experts stressed that the sector's structural inertia makes transformation hard to come by. "The education system is deeply rigid, even when it comes to integrating tools like the internet. AI, like the internet, increases access—but it hasn't yet changed the way we learn," said Gal.

India's edtech sector, driven by a young population and growing internet penetration, is poised for significant long-term growth despite recent funding headwinds. According to India Brand Equity Foundation (IBEF), the country has over 250 million school-going students, making it the world's largest K–12 market.

Meanwhile, the National Sample Survey Office (NSSO) reports that only 24 per cent of Indian households have internet access, indicating substantial headroom for growth, especially in Tier II–IV cities. The edtech sector is evolving towards hybrid delivery models, skill-based certification, and regional customization to meet this latent demand.

Venugopal said that the real promise of AI lies not in replacing teachers but in amplifying their effectiveness. "The question is, are we building for that, or are we building tools that just generate lesson plans or complete homework?"

"We have 250 million-plus students in school today. We are not going to be able to produce that many teachers. If AI can reduce human effort and help in areas where the teacher-student ratio is skewed, that's a direction we cannot ignore," added Venugopal.

According to Venugopal, this is a powerful lens for investors like Axilor Ventures, which look for opportunities at the intersection of technology, scale, and critical societal need. "At the early stage, we look for sectors where demand is unquestionable and the cost of not solving the problem is high," said Venugopal. Education fits that bill perfectly in India."

For a sector that was long marred by limited monetization pathways, it is now finding ways by addressing business models. Edtech startups often struggle to scale because the for the buyer, access is hard and adoption is slow. Venugoap said that if AI can create tools that parents, students, or tutors adopt directly, there's a faster path to market."

"From our lens at Axilor, we don't necessarily think of 'edtech' as the category anymore; it's about learning outcomes, engagement, and readiness. AI is a layer that can power all three, but only if deployed right."

Jay Krishnan, Partner, Head of India Investments, Beyond Next Ventures, said, "As investors, especially in deep science, we often enter before compliance frameworks exist, focusing on ideas rooted in physics, chemistry, and biology that can meaningfully impact areas like energy transition and climate. While not every risk can be anticipated or controlled, belief in transformative potential guides our thesis".