After the big private equity (PE) deals of Mahesh Tutorials ($12 million by Helix Investments Advisors) and Career Launchers ($10 million by Intel Capital) in the education sector, more deals are likely in the days ahead.
“Through Mahesh Tutorials itself, we have two other deals, which would be made shortly,” said Cyrus Driver, director of Helix Investments Advisors, which has about $70 million in its corpus waiting to be deployed.
“We are bullish on the education sector. Over the next 12 months, it looks very attractive.” It goes without saying that the Budget announcements for the current fiscal would provide a fillip to the education sector. However, private institutions are not on Driver's radar.
“They are non-profit organisations,” he said. He said he is open to investing in firms targeting students preparing for competitive exams such as IMS, Time etc. Neel Broker, principal and India head of Sterling Partners, said, “We are very excited about the sector. We are looking across the education spectrum. We would focus on distance learning, too.”
He said that the entire 15 years of education at renowned institutions during his era needed a total of Rs 50,000.
“The same would today need more than Rs 6.5 lakh, which is 14x multiple in 15 years,” Broker said at the VC Circle Growth Capital Forum held in Pune.
It is learnt that India Equity Partners, too, is rethinking about the education space.
ICICI Ventures and several others are participating in the medical education business of the Manipal Group, which is eyeing PE capital.
Zephyr Peacock Management India, too, is focusing on WLC and helping it make vocational training popular in India.
However, Broker of Sterling sees a few hurdles, especially in the case of private institutions and universities.
“The universities are regulated and PE players would not be willing to deal with regulatory rumbles. It will take a couple of years for venture capitalists and PE players to reap out of the education sector,” he said.
“There are ways to get around the trust and non-profit structure. There are companies such as Educomp, which cater to universities. The education trusts would still need good content and infrastructure, which would be provided by other companies that do not follow a trust structure. It's going to be pretty tricky,” Broker added.
There is also hope that the government would allow more private participation in the sector. The move still looks a couple of years ahead.
Source: Sify