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Indian Education Sector Attracts PE Investments Worth $208 Million In 2016: Report

Indian Education Sector Attracts PE Investments Worth $208 Million In 2016: Report

News Corp VCCircle, India’s leading publisher of start-up and private equity news, data and information, and an integral part of global diversified media, news, education and information services group, News Corp, has today released its ‘VCCEdge Funding Insights’ focused on investments into India’s education sector.

News Corp VCCEdge, the financial research platform of News Corp VCCircle, offers information on M&A’s, private equity and venture capital transactions including deal terms, structures, deal amounts and valuations.

VCCEdge Indian Education Sector Funding Insights:

Sector Fundometer

  • Since 2012, the Indian education sector has registered 289 deals amounting to $ 919 million.
  • The year 2016 so far has seen 42 deals worth $ 208 million, when compared to 81 deals aggregating to $ 166.33 million in 2015.
  • 2014 was the year that witnessed the maximum investment of $ 243 million from 62 deals.

Segment Focus

  • Test Preparation Appsgarnered maximum funding of $ 140.54 million in 2016 from 11 deals. When compared to 2015, the number of deals has remained unchanged while deal value has sky rocketed 532%. This segment comes second in terms of investments since 2012, with $ 217.57 million across 54 deals.
  • K-12 Education Service Providersraked in $ 55.54 million from 4 deals in 2016 as against 6 deals worth $ 2.95 million in 2015. Since 2012, the segment has registered 32 deals worth $ 134.94 million.
  • E-Learning portals have attracted the maximum investor interest, both in terms of volume of deals which stand at 83 as well as deal value which is $ 301.29 million since 2012. However in 2016, this segment has seen number of deals fall to 14 and deal value reduce to $ 5.10 million from the stellar performance last year which saw 29 deals amounting to $ 99.76 million.
  • Vocational Training institutes secured funding of $ 2.79 million from 2 deals in 2016 when compared to 3 deals worth $ 1.83 million in 2015. This segment has the smallest pie in the overall education sector funding with $ 17.65 million from 14 deals since 2012.
  • Diversified education services saw 5 deals to the tune of $ 2.36 million as against 11 deals worth $ 3.07 million last year. This segment has registered 32 deals worth $ 21.33 million in the past five years.

Top 3 Investors (2012-2016 YTD)

  • PremjiInvest ($ 147.39 million), Cerestra Advisors Ltd. ($ 35.32 million) and Gaja Capital ($ 32.03 million) lead the pack in terms of investment value.
  • Unitus Seed Partners LLC (12 deals), Pearson Affordable Learning Fund and Kaizen Private Equity LLC (9 deals) are the most active investors in India’s education sector in terms of number of deals struck since 2012.

Top Funding Deals (2016 YTD)

  • Byjus Classes’Think and Learn Pvt. Ltd. secured 2 deals worth $ 125 million from Times Internet Ltd., Chan Zuckerberg Initiative LLC, Sequoia Capital India IV Ltd.,Aarin Capital Fund I, Lightspeed Management Company LLC, Sofina Societe and Sequoia Capital India V Ltd.
  • CERESTRA Edu-Infra Fund’s investment of $ 35.32 into Arka Eduserve Pvt. Ltd. was the top funding deal in the K-12 space

Investment Outlook

Sharing her views on what the future of the sector holds, Nita Kapoor, Head – India New Ventures, News Corp and CEO, News Corp VCCircle said, “There is a clear link between India’s skill-gap and the funding gap in our education sector. While government outlay on education in percentage to GDP terms is lower than the world average of 4.9%, private investments can take place only when delivery of quality education results in business value creation. There is clearly a scope for disruptive technology to be leveraged by this sector. While investments in e-learning ventures would witness a rebound with the introduction of 4G, areas of liberal arts, sports education, media education and adaptive learning offer interesting investment opportunities. Ventures offering vocational training are ripe for investors to back given the un-employability of our engineering and management graduates.”

[Top Image – Shutterstock]

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Founding editor at IndianWeb2, he's been writing at IndianWeb2 since 2007. Apart from blogging he had a professional career of software developer, Ux developer and search engine marketer in past. His vision of IndianWeb2 has been laid down so as to showcase, encourage and propagate Indian startups, innovation and entrepreneurship ideas.

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