Gaja Capital, a private equity firm that focuses on mid-market deals, is set to make its fourth bet in the education sector from its third fund, a person privy to the development told VCCircle.
The private equity firm is investing as much as $20 million (Rs 130 crore) in Kangaroo Kids Education Ltd, a premium pre-school and K-12 chain of schools, the person said, asking not to be identified.
Gaja Capital had made the final close of its third fund at $240 million in March last year after making the first close in October 2014. The Mumbai-based firm focuses on education, financial services, consumer and healthcare sectors.
Emails sent to Gaja Capital and Kangaroo Kids did not elicit any response till the time of filing this article.
The development comes at a time when Gaja Capital is partially exiting CL Educate Ltd, in which it had invested from its previous fund, as part of the education services company's ongoing initial public offering. The IPO of the company, which owns the Career Launcher brand, was covered 77% at the end of the second day of bidding on Tuesday.
The company, which was founded in 1993, offers pre-school education to more than 9,000 students across 79 schools in 20 cities in India, Dubai and Maldives. It also runs a K-12 chain of schools under the brand Billabong High. Started in 2003, Billabong High has 16 schools and 7,000 students.
The investment from Gaja Capital will be the first private equity funding for the company, which was being backed by a host of individual investors so far. VCCircle had reported in September last year that Kangaroo Kids bought back the stake held by four investors including Future Group chief Kishore Biyani and an Australian family fund.
The buyback increased founder Lina Ashar’s holding in Kangaroo Kids from 74% to around 81%. Academician and stock market investor Shivanand Mankekar, venture capital firm Sixth Sense Ventures’ founder Nikhil Vora, Welingkar Institute's Uday Salunkhe and stock broker Kalpraj Damji Dharamshi are among the other investors in the company.
Kangaroo Kids reported net sales of Rs 31.06 crore in the year ended 31 March 2016 compared with Rs 27.12 crore the previous year. It clocked a net profit of Rs 5.54 crore last fiscal year compared with Rs 5.66 crore the previous year.
Gaja Capital's third fund
The third fund, named Gaja II, made its first investment in frozen food specialty firm Bakers Circle. The PE firm invested Rs 36 crore in Bakers Circle along with existing investor DSG Consumer Partners.
Its second investment was in SportzVillage, which offers sports management services to schools and offers sporting experiences as part of employee and customer engagement to corporate houses.
The third investment was in Suryoday, a microfinance company with a licence to set up a small finance bank.
Gaja’s previous fund had a corpus of $180 million and was raised in 2007-08. This fund invested in CL Educate, pre-school chain EuroKids, automotive services company Carnation Auto, private-sector lender RBL Bank, and staffing company TeamLease.
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