INVESTING IN

EDUCATION
April 2011
MIT Enterprise Forum - Bangalore
 Agenda
•  VC Investments in Education

•  Education Ecosystem

•  Sectors of Interest

•  Issues to Consider as an Entrepreneur

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VC Investments in Education
•  Top sectors attracting investments in CY 2010
Sector No. of Deals Total Value( $mn)
IT/ITES 50 261
BFSI 13 52
Education 11 54
Healthcare and Life Sciences 11 51

Company   Sector  
Your  Kids  R  Our  Kids   Day  Care/Pre-­‐School  
Tree  House  Educa;on   Day  Care/Pre-­‐School  
Centum  Learning   Higher  Educa;on  
Ideacount  Educa;on   Higher  Educa;on  and  Voca;onal  
Maharana  Infrastructure  and  Professional  Services   Services  to  Educa;onal  Ins;tu;ons  
K-­‐12  Techno  Services   Services  to  K-­‐12  Schools  
SV  Edusports   Sports  curriculum  
Resonance  Eduventures   Test  Prep  
Thinklabs   Training  (Non-­‐IT)  
Orion  Edutech   Voca;onal  (Call  Centers)  
Aspire  Human  Capital  Management   Voca;onal  (English  Language  Training)  
Speakwell  English  Academy   Voca;onal  (English  Language  Training)  
Source: Venture Intelligence
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Education Sub-Sectors

IES

Non-
Formal1 Formal2

Higher Pre- Multimedia Vocational Coaching

K-12 Ed3 school for Schools ICT Training Classes

Audio - Virtual Content Public Private IT infrastructure

Video Aid Classrooms Based Partnership4 and training

1 Alllevels that fall under the purview of the Department of Human Resources Development
2 Alllevels that are free of govt. regulation (there are no governing bodies for this segment)
3 Graduation and Post Graduation Courses
4 Business venture that is funded and operated through a partnership of Govt and one or more private sector companies
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Education Sub-Sectors (Market Size)

(Page 1 of 2)
Revenues – CAGR %
Sector (2008-2012) 5 Major Players Comments
(2008-2012)
($M)
Formal $40,000 - $65,000 13

+ Largest potential in space, High

-  Millennium
Margins.
Schools
– High regulations, Capital intensive
K-12 $20,000 – $34,000 14 (Educomp)
unless providing a complimentary
- KidZee High
management service.
- Billabong High

+ Demand > Supply (need for 1500

more colleges)
-  Manipal
– Cap Intensive, high competition,
Education
Higher Ed $20,000 - $31,500 12 Govt regulations, building brand
- Amity University
equity takes long.
- IIPM

5 Actual figure (2008) vs. Projected figure (2012)

Source: IDFC-SSKI Research

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Education Sub-Sectors (Market Size)

(Page 2 of 2)
Market Size–
CAGR %
Sector (2008-2012) Major Players Comments
(2008-2012)
($M)
Non-Formal 10.100 – 19,608 18
- KidZee + Franchise friendly, Underpenetrated but fast growing
Pre-School 300 – 1026 36 - Euro Kids market
- Apple Kids – Small sphere of influence, rising land rates.
- Educomp – Smart
+ Underpenetrated market (5%), regular and high returns
Multimedia in Class
70 – 459 60 on investment.
Private Schools - Everonn – Vitels
– Cap intensive (devices), duplication concern
- NIIT – EGuru
- Educomp
ICT in Public + Underpenetrated market.
90 – 729 70 - Everonn
Schools – Low margins, cap intensive.
- NIIT

- FIITJEE + Low quality of existing teaching, higher competition

Coaching
6,400 – 11,194 15 - IMS leading to higher demand for coaching
Classes
- T.I.M.E – Scalability issue
- NIIT
- Aptech – IT and + Non-formal training gaining momentum and new
Vocational
1,500 – 3,662 25 Aviation training avenues, training becoming a must.
Training
- VETA Eng – Low margins, scalability issue
training
- Tata McGraw Hill
+ Increase in Demand for quality books
Books/ Others 1,750 – 2,516 10 - NavNeet
– Large second hand market, high govt control (95%)
- Macmillan
Source: IDFC-SSKI Research
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Education: Sectors of Interest

(Page 1 of 2)

IES

Formal Non-Formal

Multimedia for
K-12 Higher Ed Pre-school Schools ICT Vocational Coaching Classes

•  Enhancing delivery in schools

•  Curricular
•  Extra-curricular
•  Activity based learning
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Education: Sectors of Interest

(Page 2 of 2)

IES

Formal Non-Formal

Multimedia for Coaching

K-12 Higher Ed Pre-school Schools ICT Vocational Classes

•  Remote Delivery
•  Vocational Training
•  Personal devices
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Issues to Consider
•  Specific total addressable market (TAM)
•  Scalability
•  Competition
•  Stakeholder perspective (parents/educators)
•  Capital requirement/intensity
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Q&A

Thank You

Email: anand@accel.com
Twitter: twitter.com/adanie2