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Education Sector Bucks the Trend; Attracts PE Investments Worth $208 Million in 2016

News CorpVCCEdge, 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.

Photo Credit : ShutterStock,

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 CorpVCCEdge, 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 Apps garnered 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 Providers raked 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

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 unemployability of our engineering and management
graduates.”



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