Kota-based test preparation company Resonance Eduventures Pvt Ltd, which offers coaching for IIT-JEE, engineering and medical entrance exams, has raised $21.8 million or around Rs 100 crore from CLSA Capital Partners.

VCCircle had first reported on June 17 that CLSA is investing around 100 crore in Resonance for up to 12 per cent stake.

CLSA has announced that it has picked an undisclosed minority stake in Resonance through ARIA Investment Partners III L.P. (ARIA III). The investment by the $333 million ARIA III fund closed on September 28, 2011. This is the fifth investment by ARIA III and the 10th investment by the ARIA group of CLSA Capital Partners in India. ARIA Investment Partners chases growth and expansion capital deals in Asian mid-market companies.

Founded in April 2001, Resonance is one of the largest coaching institutes in India for preparation of entrance exams in the fields of engineering and medical sciences. The company provides many courses, such as year-long classroom contact programmes (YCCPs), e-learning through online tests and in-school video learning.

Last year, it had raised Rs 60 crore from Milestone Religare Investment Advisors Pvt Ltd, an education and healthcare-focused private equity firm.

“CLSA Capital Partners brings immense value from its deep insights in the Indian consumer market and regional network of pan-Asian contacts. Working with Milestone Religare and CLSA Capital Partners, we will be able to better meet the education needs of our students and take the company to its next stage of development,” said R K Verma, founder of Resonance.

Resonance has more than 25,000 students who are enrolled across 38 centres and taught by a 400-strong faculty team and also 10,000 students who study through distance and e-learning programmes. The company has planned to open primary and secondary schools soon.

Miranda Tang, managing director (private equity) at CLSA Cap, said, “Our investment will enable the company to build a unified coaching and residential centre in Kota, penetrate other high-growth regions of the country and pursue the right inorganic opportunities. Resonance’s coaching business is a perfect fit for ARIA’s Asian domestic demand-focused investment strategy.”

CLSA Capital Partners, an arm of the CLSA Asia-Pacific markets which is an independent Asian brokerage and investment group, has nearly $2.7 billion under management and offices in Hong Kong, Singapore and Tokyo.

Test Prep Biz Gets High Marks From PE

In the test preparation space, FIIT JEE, which claims to be a leader in IIT coaching, had recently raised Rs 100 crore from Matrix Partners while Milestone Religare put in Rs 25 crore in IMS Learning Resources. The other test preparation companies who have raised private equity funding are Career Launcher (from Intel Capital in the first round and under $10 million from Gaja Capital Partners in series B) and Mahesh Tutorials (about $12 million from Helix Investments). 



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