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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 IT/ITES BFSI Education Healthcare and Life Sciences No. of Deals 50 13 11 11 Total Value( $mn) 261 52 54 51

Company   Your  Kids  R  Our  Kids   Tree  House  Educa;on   Centum  Learning   Ideacount  Educa;on   Maharana  Infrastructure  and  Professional  Services   K-­‐12  Techno  Services   SV  Edusports   Resonance  Eduventures   Thinklabs   Orion  Edutech   Aspire  Human  Capital  Management   Speakwell  English  Academy  

Sector   Day  Care/Pre-­‐School   Day  Care/Pre-­‐School   Higher  Educa;on   Higher  Educa;on  and  Voca;onal   Services  to  Educa;onal  Ins;tu;ons   Services  to  K-­‐12  Schools   Sports  curriculum   Test  Prep   Training  (Non-­‐IT)   Voca;onal  (Call  Centers)   Voca;onal  (English  Language  Training)   Voca;onal  (English  Language  Training)  
Source: Venture Intelligence

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Education Sub-Sectors
IES

Formal1

NonFormal2 Preschool Audio Video Aid Multimedia for Schools Virtual Classrooms Content Based Public Private Partnership4 Vocational Training IT infrastructure and training Coaching Classes

K-12

Higher Ed3

ICT

1 All

levels that fall under the purview of the Department of Human Resources Development levels 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
2 All

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Education Sub-Sectors (Market Size)
(Page 1 of 2) Sector Formal Revenues – (2008-2012) 5 ($M) $40,000 - $65,000 CAGR % (2008-2012) 13 -  Millennium Schools (Educomp) - KidZee High - Billabong High + Largest potential in space, High Margins. – High regulations, Capital intensive unless providing a complimentary management service. Major Players Comments

K-12

$20,000 – $34,000

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Higher Ed

$20,000 - $31,500

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+ Demand > Supply (need for 1500 more colleges) -  Manipal – Cap Intensive, high competition, Education 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)
Sector Non-Formal Pre-School Market Size– (2008-2012) ($M) 10.100 – 19,608 300 – 1026 CAGR % (2008-2012) 18 36 - KidZee - Euro Kids - Apple Kids - Educomp – Smart Class - Everonn – Vitels - NIIT – EGuru - Educomp - Everonn - NIIT - FIITJEE - IMS - T.I.M.E - NIIT - Aptech – IT and Aviation training - VETA Eng training - Tata McGraw Hill - NavNeet - Macmillan + Franchise friendly, Underpenetrated but fast growing market – Small sphere of influence, rising land rates. + Underpenetrated market (5%), regular and high returns on investment. – Cap intensive (devices), duplication concern + Underpenetrated market. – Low margins, cap intensive. + Low quality of existing teaching, higher competition leading to higher demand for coaching – Scalability issue + Non-formal training gaining momentum and new avenues, training becoming a must. – Low margins, scalability issue + Increase in Demand for quality books – Large second hand market, high govt control (95%)
Source: IDFC-SSKI Research

Major Players

Comments

Multimedia in Private Schools ICT in Public Schools Coaching Classes

70 – 459

60

90 – 729

70

6,400 – 11,194

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Vocational Training

1,500 – 3,662

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Books/ Others

1,750 – 2,516

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Education: Sectors of Interest
(Page 1 of 2)
IES

Formal

Non-Formal

K-12

Higher Ed

Pre-school

Multimedia for 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

K-12

Higher Ed

Pre-school

Multimedia for Schools

ICT

Vocational

Coaching 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