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SAAMARTHYA
re-defining the education
Information Memorandum
Saamarthya Edusols Pvt. Ltd.
November 2010
Table of Contents
1 The Project 2
4 Operations 12-15
2
Private & Confidential
Project Concept
Vision Mission
a platform for child and youth development by A School Management Company for
making quality education accessible to masses low cost and readily deployable
bridge the educational and the digital divide education solutions
between urban and rural India working with low-end institutes
Strategy: Capacity Building of low-cost private schools, non-formal schools & other similar
institutes (“low-end schools”) operating in rural and urban areas.
3
Private & Confidential
Rationale
Insufficient System
Poor Quality
In class 1-5, students who can read std 1
• According to Pratham’s* survey in rural India (ASER
text
09)
60% 52.2%
• Less than 50% of children in Std 3 can read
50% 43.6% 44.2%
Std 1 level text
40%
• Attendance is about 15% to 30% lower than 30% 26.5%
the enrollment rate (estimated to be 96% for all 20%
the schools in the country)
10%
• Differential between Public and Private 0%
School’s reading is more because of the
Local language English-simple words
external factors like family
background, tuitions etc. than the type of the Private Public
school English differential 67% ; ASER estimates 40% due to external factors
Source: IDFC-SSKI Sector report Jan 09, CLSA Sector report 2008, ASER 09, DISE Flash Statistics 09, Education World & other market reports 4
Private & Confidential
Market & Opportunity
India has largest K12 aged population globally
40% of students within private schools; ASER estimates 25-30% of schools in rural areas are private schools
44% villages have access to private schools; indicates the sector is well established (ASER)
>25% of children in all the schools take private tuitions.
Low teacher-to-student ratio for all schools, and low quality of teachers in Low-end and middle-level school is a huge gap;
and so a significant market for value addition.
66% of schools are primary and can be assisted to upgraded to secondary
high drop out rate from primary to secondary will be controlled.
new enterprise oriented vocational training can be provided to make them self-reliant.
Growing per capita income, purchasing power and awareness about the importance of education among all the segments of
society provide significant opportunity for innovation.
Source: IDFC-SSKI Sector report Jan 09, CLSA Sector report 2008, ASER 09, DISE Flash Statistics 09, Education World & other market reports; Note:-
+ informal; informal (2): multimedia+ ICT in govn school+ pre-school+ coaching/ tuitions+ vocational training 5
Private & Confidential
6
Private & Confidential
Target Market
Non-formal and un- > 50% of 75, 000
recognized schools private schools in
have significant India (IDFC-
reach in these SSKI, CLSA
segments & will be a 2008)
prime market
High-end Schools
• Fees : > 1500
Middle level Schools • Area: Tier-1, 2 cities
• Fees : 800-1500 • Primary & Secondary
• Area: Tier-1, 2, 3 cities • Teacher’s salary: >15k
• Primary & Secondary • No. of students: > 1000
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Source: IDFC-SSKI Sector report Jan 09, CLSA Sector report 2008, ASER 09, DISE Flash Statistics 09, Education World & other market reports
Private & Confidential
Proposed Operating Model
Saamarthya
Teaching aids:
Self-explanatory content (video, hand- School
outs, books, multimedia etc) in Local language
emphasizing concept for teachers and students Low-end schools’ benefits
Training teachers for Interactive and activity New pedagogy and teaching aid will improve
based problem practice/ assessment sessions teaching standard of the school
(manuals, resources, online classes etc.) Optimization of the available resources & adaptation
of the best standard practices
Retention of students & attraction to new students
Management support:
Multimedia teaching will give a unique identity to
On time reporting via School Management schools; thereby increasing the admissions
System (SMS)
Promote to Secondary from primary standard
Other day-to-day operations like scheduling
Under one consortium, these schools can raise
classes, fees collection, lesson plan etc. by SMS
charity/ govn. funds to improve infrastructure
Onsite staff for training and maintaining the
Better governance
system
Infrastructure development by raising funds
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Private & Confidential
Why we need Saamarthya
Existing e-learning companies mostly work with high-end schools because of the high-cost product
Saamarthya is a social entrepreneurship model and is a low cost solution which will work with schools in rural
areas and urban slums
Existing digital content is mostly in English; is not self explanatory and is an add-on to a qualified teacher
Saamarthya’s content is self explanatory; in local language and is a teaching tool
Most of the e-learning companies are learning-product based, and do not involve in operations of a school
Saamarthya will manage the school on day-to-day basis & will help the school to raise funds by bringing them
under one umbrella
Except for some NGOs, e-learning companies are just limited to curriculum based learning content
Saamarthya’s vision is overall development of a child with emphasis on moral and extra-curricular activities
How to start
with
Content & Delivery system A prototype: Digital Study Hall (DSH)
Will develop the desired content with the guidance from NGO based in Lucknow since 2005
institutions such as DSH, CIET & IGNOU (Sakshat & e-gyankosh) Digitally record live classes by the best grassroots
etc. teachers, transmit them on the "Postmanet“
(DVDs through post)
Will make special courses for English and Math and will use other
As of now works with 30 schools for
Open source content and modify it as per our needs
underprivileged students & has 1500 recordings
Will use the 29 inch CRT T.V. as the delivery system (costs of lessons
<15k), with a Razor bee instrument which can access internet from Team did a field visit to know about the
a TV (costs< 10k) operations of DSH
Will use open source software for Management system &
meanwhile will develop our own
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Team Private & Confidential
Sourabh Maheshwari
Graduated in 2007 from IIT Kharagpur. Started career with a start-up in agribusiness. Joined IFC (World
Bank’s Private equity arm) in 2008; worked for about 2 years with Financial Market department- worked
on investment projects in Microfinance.
Being a native of a village, and the will to do something at grassroots; supported by the experience and
learning at IFC and IIT makes him apt for social entrepreneurship.
Deepa Maheshwari
Graduated in 2006 from BIT Mesra. Has been working with Computer Science Corporation as a software
engineer for the last 4 years.
Born and brought-up in a medium middle class family, and was a meritorious student in Kendriya
Vidyalaya; always wanted to counsel children. CSC’s computer knowledge gave her a different vision of
impacting lives of children’s with the use of technology.
G. Sreechakra
IIT Kharagpur Gold Medalist (2008) from Electronics and Communication Department; pursuing Ph.D. at
University of Princeton, USA. Supporting the team as a Technical advisor.
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Expansion Plan & Time-lines
July-Dec 10 July-Nov
11, 12….
Jan 10-June 11 Dec 11, 12…-June
12, 13…
11
Revenue Model & Area of operations
Revenue Model
• Schools will be charged on per student basis
• the proposed average charge is going to be between Rs. 25-37 per student per month;
• this will not result in the direct increase in the existing fee; a part will be charged to
students (about Rs. 10), and the other part will come from admission of new students
• to cover our cost we need about 30 new students with an average fee of 135 for a batch
of 250 students, as one delivery system can serve 250 students
Area of operations
The Company will start operations focusing Central India; primarily
Hindi speaking/ proficient areas and going forward will go pan-India.
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Operations & Marketing
Spoke 1 (Schools)
HQ Schools
Content Development- digital, manuals and Schools will act as the spokes with the Principal/
other modules Head-master as the reporting operational head
Monitoring schools’ operations via ERP Marketing team will be based out of the schools
solutions and field visits , and will coordinate with schools for trainings and
Scheduling teachers’ training day-to-day operations
Designing school program with the help of the
school staff
Marketing Strategy
• One marketing professional for 10 partner schools
• this will include interaction with schools right from contacting to training and
monitoring
• during the first year, schools will not be charged as a part of the marketing and
demonstration exercise
• Each staff will be provided with Portable 7 inch DVD player and self –explanatory
material like movies and presentations for marketing & training
• Staff will have regular trainings and competitive salaries
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Staffing & HR
Pilot Year 1 Year 2 Year 3 Year 4 Year 5
Schools 5 50 200 500 800 1100
Staffing HQ
Operations
Core 1 1 1 1 1 1
Heads( Regional) 2 3 4 5
Marketing & Sales
Core 1 1 1
Heads( Regional) 1 2 3 4 5
Technology
Core 1 1 1 1 1 1
Heads( Regional) 1 2 3 4
Accountant 1 1 1 1 Core team will look after the strategy, and
Staff Support 1 2 2 2 it’s implementation
Core team will report to board, advisors
Total HQ staff 2 3 9 14 17 20 and investors
Heads will report to the core team and will
Marketing &
Monitoring (Field) 5 20 50 80 110 140
look after the day-to-day operations
Marketing staff & School Principal will
report to the heads
Market salaries to Heads and field staff
from the beginning
Core team will be taking only living
support/ subsidized salary till year 3rd
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Key Risks & Mitigants
# Risk Mitigant
1. Start-up risks: All risks relevant to execution exists. • Team is working closely with people who have
experience in start-ups and will have an advisory team to
help the company.
• Team has some start-up experience and will learn during
the pilot phase.
2. Inexperienced team: Currently the core team does not • Team would be piloting the concept with 5 schools for a
have relevant experience in school management or year to learn the nitty-gritty of school management
teaching • Team has been constantly meeting with concerned
people to understand more about the sector
3. Funding: Project needs funding from the beginning. • Team is exploring all the venues for funding- incubation
institutes, social and angle investors, Venture capital and
PE firms.
4. Implication of RTE act on low-end schools: RTE act • Either the government will have to support the schools
brings many dos for the school like teachers’ salary financially, or will have to make the law flexible, as
equal to that of government school (>15 k), government school system is insufficient and needs
classroom size, playground etc. private participation to meet the growing demand in
Low-end schools will not be able to follow these education sector
rules because of business viability and may have to
shut down
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Private & Confidential
Existing Players/ Operational Models
Operating Model Revenue Model No. of schools
Multimedia: 1734;
Leading education products and services provider in India for
Rs 150 per student ICT: 12000; Pre-
K‐12 .Plasma TV in each class room with a main server in
pm schools: 500; Brick &
each school (H/W & content solution)
mortar: >20
Using VSAT, a well-trained teacher delivers lectures from a Schools: 867; Colleges:
Rs 125-180 per
remote location (studio) to different schools/colleges that are 1396; ICT: 5862; Voc.
student pm
connected (Virtual Classrooms). (H/W & content solution) Training: 46
Schools: 14837
Multimedia based pure content solutions for IT and other
(Multimedia+ ICT+ IT
mainline subjects including Mathematics, Science, Social
Rs 40-250 pm training); Skill
Sciences, English, etc. Recently launched complete H/W &
Training centers: 850
content solution product
(globally)
Schools pay one-
Multimedia projector with content modules time fee of 800 (FY08)
Rs 130,000
A well recognized publication house for K-12. Digital version
Plans to foray
of the textbook – a content solution
New players
• Xseed (iDiscoveri) gives education solutions for teacher’s training and student assessment, and has network of about 250
schools, mostly in South India.
• Helix technologies make computer based learning products (mostly animated) which is delivered via set-up box (content
depository) & digital white board. Costs one time fee of about Rs. 1.9 lac or EMI of about~ Rs. 5k for five years for one
complete system.
Source: IDFC-SSKI Sector report Jan 09, CLSA Sector report 2008, ASER 09, DISE Flash Statistics 09, Education World & other market reports. 16
Financials
Years Pilot Year 1 Year 2 Year 3 Year 4 Year 5
No. of Schools (with 250 Avg
students) 5 50 200 500 800 1,100
Ratios
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Funds Requirement
Pilot Consolidated
Years Year 1 Year 2 Year 3 Year 4 Year 5
(Seed) Pilot & Year 0
Operating Cash Flow (200,000) (1,030,000) (1,206,000) 2,273,600 13,015,578 25,170,147 40,838,852
Pilot &
Years Year 1 Year 2 Year 3 Year 4 Year 5
Year 0
Free cash flow to firm (3,531,667) (7,400,333) (9,901,467) (959,984) 10,293,836 29,393,852
Terminal value (exit at P/E=9, industry
average=18) 300,999,217
Cash Flow for NPV calculations (3,531,667) (7,400,333) (9,901,467) (959,984) 10,293,836 330,393,069
Discount Rate 25%
Thank you
For more details contact:
Sourabh Maheshwari
Email: maheshwari.sourabh@gmail.com
Phone No: +91 9212613343 (9967516966)
http://www.youtube.com/user/smahehwari1?feature=mhum
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