Partly spurred by its concentration of intellectual talent, New York is also becoming a hotbed of innovation in educational technology. Venture capital investment in education-related startups in the metro area totaled $95 million in 2011—an 84% spike over the prior year, according to PricewaterhouseCoopers/National Venture Capital Association. The number of startups receiving investment money rose to 14, up from eight in 2010.In the long run, newfangled interactive textbooks like the ones Apple and its publishing partners previewed last Thursday are likely to be a minor aspect of education’s digital revolution. But Apple’s entry is certainly helping the revolution along.
All doesn’t seem to be well, however:
In the fourth quarter, VC financing in the New York area plunged 40%, compared with the prior quarter, to $545.1 million.
But experts say the tech-education industry is just getting started. The U.S. business for e-learning products and services in the pre-K to 12-and-higher education markets will grow to $11 billion in 2015, from $7.6 billion in 2011, according to research firm Ambient Insight.
Tablet makers appear to see a big market for selling devices to students. After Datawind’s blockbuster launch of the world’s cheapest Tablet Aakash and the more recent launch of Classpad, it is the turn of E-class Education System Ltd, a wholly owned subsidiary of public listed stationery products maker Sundaram Multi Pap Ltd to launch an education Tablet.
The company has launched a new Tablet PC called ‘e-class Tablet’. The Tablet comes inbuilt with e-class content and has been developed by Sundaram Group for Maharashtra State Board students. The Tablet has the entire syllabus of a selected standard preloaded inside it in a video format that includes animations, audio and visuals.
There are two models of the Tablet, a basic and a premium one. The basic model comes with a resistive touchscreen and is priced at Rs 8,000, while the capacitive touchscreen model is priced at Rs 12,000.
Dilip Modi-promoted Omnia Investments has funded candidate assessment venture Common Job Test and higher education firm Sunstone, picking up significant minority stake in both start-ups. According to a report by Economic Times, the total sum invested by Omnia in these early-stage start-ups amounts to Rs 7 crore.
Helion Advisors, one of the largest early stage venture funds in the country, today announced an investment of US$ 3.5 million in Vienova Education, an affordable private education provider based in Delhi, India. This follows the first round of funding by Indian Angel Network (IAN) and others in 2008. With this investment, Mr Sanjeev Aggarwal, Senior Managing Director, Helion Advisors, joins the board of Vienova.
Private equity interest in India’s bustling education sector only continues to grow. And this time, Kota-based Resonance Eduventures Pvt Ltd, a test preparation company offering coaching for IIT-JEE and other engineering entrance exams, is raising Rs 100 crore ($22 million) from CLSA Capital Partners, two persons with direct knowledge of the development told VCCircle.
While this may otherwise seem to be another deal in the busy ‘education’ market, it is interesting to note the valuation that Resonance Eduventures Ltd got, for this deal.
The deal which attracted the interest of about 10-12 players, fetched a significant premium to its publicly listed peer, Career Point Infosystems Ltd. Career Point, which has a market capitalisation of Rs 603 crore, is trading 15.4x its trailing PBT for FY11. According to VCCedge, the financial research platform of VCCircle, Resonance Eduventures had PBT of Rs 20 crore for the year ended March, 2010. This means Resonance is being valued over 40x its one-year-old PBT. Its latest financial numbers are not available yet. Resonance apparently commanded a higher valuation multiple in spite of having comparatively lower net profit margin (comparing Resonance’s FY10 with Career Point’s FY11 numbers).
N R Narayana Murthy’s Catamaran Ventures, which struck its investing debut with SKS Microfinance (India’s first microfinance firm to go public), is making its second investment in Bangalore-based Ace Creative Learning Pvt Ltd, which provides educational support services to schools and colleges.
Accel Partners is the co-investor in the early stage investment round which will see both venture firms contributing Rs 2.5 crore each in Ace. This will be Accel’s fourth investment in 2010.
The $1.4 billion New Silk Route (NSR) Private Equity is close to investing Rs 325 crore or roughly $70 million , in Hyderabad-based Sri Chaitanya Educational Group, one of the country’s largest network of private schools and junior colleges, at least two persons familiar with the development said.
This could be till date among the biggest foreign investments in India’s education sector that is beginning to see a robust deal flow. NSR is an Asia-focused PE fund spearheaded by ex-McKinsey honcho Rajat Gupta, a former global head of Citi Victor Menezes and Parag Saxena.