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Education startups eye big business in rural schools



Economic Times

PUNE: Providing educational services to low income communities is proving to be good business for several startups that are launching innovative business models and reach out to rural consumers as well. These ventures are offering a range of services from pre-school classes, language lessons and online learning material delivered for free.

“We identify educated women in the community and train them to run preschools,” said Naveen Kumar, chief executive officer of Sudiksha Knowledge Solutions. “This way, we are also encouraging entrepreneurship among the women in the community,” he said.

The company set up in 2011 caters to both rural and urban students from families that typically earn between Rs 10,000 to Rs 15,000 every month.

“Most of the parents in this segment don’t send their children to schools till they can be accepted in government schools,” said Kumar who expects his company to earn revenue of Rs 70 lakh this fiscal. With 80 schools in Andhra Pradesh, the company expects its network to grow to 250 by next year.

Investors said while earlier they would only back such ventures once they had built up significant revenue and customers, the focus is now different.

Around 158 million children, below the age of six will join India’s primary schools in the coming years according to a study conducted by NGO Pratham in its Annual Status of Education Report 2012.

“As demand for innovative education services that plug the gap in the system increases, more investors will step in followed by seed investors,’ said Sreekrishna Ramamoorthy, a partner at Unitus Seed Fund that participated in a Rs 9 crore round of funding in pre-school services startup Hippocampus.

Sudiksha has also received funding of about Rs 1.5 crore including capital from Grey Ghost Ventures, the company has also raised an additional amount of Rs 45 lakhs through an accelerator programme from Village Capital.

Chennai-based Classle, an online education startup, uses cloud, mobile and social networks to allow students to access learning materials pertaining to their academics, free of cost. It has partnered with engineering colleges predominantly in the rural areas to take this platform to rural students. “Most of these students come from families with an income less than Rs 1 lakh per year,” said V Vaidyanathan, 50, founder of Classle who said his company had registered 3.25 lakh users so far. Serial entrepreneur K Ganesh who has built two ventures in the education sector is of the view that investor interest is high because of the large allocation made for children’s education by Indian parents.

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