The study aims to map the evolution and trends in the education sector from Education 3.0 to 4.0 driven by the contribution of the EdTech startup’s innovative applications. The existing body of research has not comprehensively explored the role of EdTech startups in the transition from education 3.0 to education 4.0. The study relies on the 43 published documents from the Scopus and Dimensions databases by following the PRISMA protocol. The study identifies the transformation from Education 2.0 to Education 4.0. COVID-19 accelerated changes in the education sector. The advanced technologies in Education 4.0 are AI, IoT, VR, AR, etc. Education 3.0 to Education 4.0 highlights immersive learning, personalized learning, and adaptive learning experiences. Competition, lack of infrastructure, inadequate finance, high pay-back period, compliance regulations, ethical considerations, etc. are the major challenges encountered by EdTech startups in the transition. The recommended solutions are; risk management, government assistance, financing strategies, ongoing innovations, agile project management skills, etc. The study identifies future research avenues with the help of SciVal. The limitations of the study are; only covers the final published stage documents in the two databases in the English language and the shortcomings of the methodology. The study is helpful for researchers, startups, practitioners, and policymakers for enriching EdTech startups. This study is novel by filling the gap in the existing research through a comprehensive literature review, and the exploration of recommendations and the future directions of EdTech startups.