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IIT Test Prep Company FIITJEE Raises Rs 100 Cr From Matrix Partners

13 July, 2009

Matrix Partners India, a Mumbai based venture capital firm, has invested Rs 100 crore in FIITJEE Ltd, a provider of training for IIT-JEE, AIEEE and other engineering entrance exams. This is the first time FIITJEE raising institutional money although the company has been in the fund raising market for the last three years.

The other test preparation companies who have raised private equity are Career Launcher (from Intel Capital in first round and under $10 million from Gaja Capital Partners in series B) and Mahesh Tutorials (about $12 million from Helix Investments). 

FIITJEE is a leader in IIT entrance coaching. According to sources, the company has revenues in the range of Rs 150 crore.

The company was founded in 1992 by Dinesh Kumar Goel, an IIT Delhi graduate. A company statement claims that 25,000 of its students have been selected to various IITs since its inception.

“The quality of the entrepreneur and the size and the growth of the opportunity attracted us the most to make the investments  in FIITJEE,” Rishi Navani, MD & Founder, Matrix Partners told VCCircle. Rishi Navani, Co–founder & Managing Director of Matrix India, will join the board of FIITJEE Ltd.

The company will employ the equity infusion to establish a pan India presence, added Navani. It’s likely FIITJEE will move into the formal education space such as schools and colleges, the same way Career Launcher has scaled in the recent past.

For Matrix, this will be the second investment in the education sector which had earlier invested $7 million in Tree House, a pre-school educator. Navani said that education forms the core focus of their investing theme and will be looking at making more investments in this sector.

Matrix Partners India has around $450 million under management. It invests upto $50 million in companies, making venture and growth capital investments. Some of the portfolio companies of Matrix Partners India is Brand Marketing India , Itzcash Card, Seventymm, Yo! China and Tree School. 


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9 Comments
Preeti . 6 years ago

Education sector has been attracting a lot of investment lately. I think investing in offline education delivery makes sense because of the proven business model. But I doubt the return on investment made in e-learning portals.

http://www.bharathowto.com

AnotherVC . 6 years ago

I can only say this – its not that other VCs didn’t know about this opporunity. Its only that they didn’t want to pay the valuation that the company was asking. Only time will tell who is the smarter one.

Ashish . 6 years ago

Hmm… B category attracts C category investor. MAtrix’s 70mm, ITZCsh Card etc are anyway duds! and now another .. FIITJEE- after spooning off money and dreams from JEE aspirants…gets more money!. Why dont the VC’s get it that the JEE type/MBA type model is not scalable? It all depends on the passion/’lagan’ of the teacher apart from the student. That is why u will and can never have an institute Top-30 (the institute in BIhar with 100% JEE success) needing PE. Neither the ‘Baap’ of all these FIITJEEs etc, “Vidya MAndir Classes” will ever want PE. BEcause they understand that it all depends on the passion, which often times cannot be scaled.

Career Luancher scaled and lost the sheen. And VC/PEs call that Value Add business? Is something wrong with the way vc/pe understand the business?

Gaurav Mittal . 6 years ago

These models are scalable. Franchising has failed simply because of the financial modeling. The brands are too greedy. They take too much out from the franchise and do not bother about its profitability.

CL lost the sheen because they tried to do too much on their own. Same is the case with IMS. TIME is scaling up beautifully.

None of the IITJEE coaching brands have any business skills to manage franchising.

Even well managed companies do not have their math in place. I sat down with the guys selling the franchise of one of the biggest CAT brands. With the numbers and projections given by them, the model was not making money.

You cant expect FIITJEE, VMC, Bansal, Resonance etc. to have any better sense.

The point is why did FIITJEE raise money. They did not need it to scale their current business. In all likelihood, it is to open schools like CL.

Gaurav Mittal . 6 years ago

These models are scalable. Franchising has failed simply because of the financial modeling. The brands are too greedy. They take too much out from the franchise and do not bother about its profitability.

CL lost the sheen because they tried to do too much on their own. Same is the case with IMS. TIME is scaling up beautifully.

None of the IITJEE coaching brands have any business skills to manage franchising.

Even well managed companies do not have their math in place. I sat down with the guys selling the franchise of one of the biggest CAT brands. With the numbers and projections given by them, the model was not making money.

You cant expect FIITJEE, VMC, Bansal, Resonance etc. to have any better sense.

The point is why did FIITJEE raise money. They did not need it to scale their current business. In all likelihood, it is to open schools like CL.

Karthik . 6 years ago

@Ashish:

I agree with your assessment of passion of individual teachers being more important for success rate among students. But I think individual teachers have the inherent disadvantage of not being able to scale up effectively. So apart from the top 300-400 students who join these teachers, there is a huge unaddressed market which exists and most of these students would be drawn towards big and more established brand names.

I think the bigger risks for FIIT -JEE/ Bansal / Resonance etc. is not from the competition from the individual passion-led firms, but more from the IITs itself. Most of the coaching centres have become some sort of educational sweatshops trying to game the IIT entrance exam. I would presume that a lot of these exams would be tweaked to avoid the influence of coaching classes on the results.

VCkid . 6 years ago

I guess,a lot can be scaled wrt the IIT or CAT arena,

I’m sure you’d have the number of applicants going up from 2-3L to something close to 10-15L in 3-4 years.

(And for CAT,you can get the summation of the harmonics henceforth :)..)

Now,If I had a Fiitjee centre(Which i didnt have ~_~,or a vidya mandir or a bansal,I wouldnt think much and would join.)

I guess the people who know it know it.

Its all about simulation.

Bigger the size.The better.

Ambarish Srivastava . 6 years ago

Well, I am an insider, don’t know much about the financial jargon being discussed here, but if you mean by scaling “Growth”, I wish to tell you that I joined FIITJEE in the year 2005 and FIITJEE has more than doubled its number of centres as well as teaching staff since then. In 1992 it started with 5000 Rupees and Now you can see the growth speaking for itself. As for “lagan” of the teachers, while there is always a gaussian distribution, I personally know a number of faculty who teach with a great commitment. FIITJEE is heavily in to recruiting IIT B.Techs and when an IIT B.Tech. decides something for a career , most likely there will be a “lagan” out there.

One may tweak as much as one want with the existing IIT JEE system of exams, the need for coaching will always be there (History is a proof think about all the tweaking with IIT JEE in past 3-4 years, and show me where has the coaching business declined)

Ambarish Srivastava . 6 years ago

Well, I am an insider, don’t know much about the financial jargon being discussed here, but if you mean by scaling “Growth”, I wish to tell you that I joined FIITJEE in the year 2005 and FIITJEE has more than doubled its number of centres as well as teaching staff since then. In 1992 it started with 5000 Rupees and Now you can see the growth speaking for itself. As for “lagan” of the teachers, while there is always a gaussian distribution, I personally know a number of faculty who teach with a great commitment. FIITJEE is heavily in to recruiting IIT B.Techs and when an IIT B.Tech. decides something for a career , most likely there will be a “lagan” out there.

One may tweak as much as one want with the existing IIT JEE system of exams, the need for coaching will always be there (History is a proof think about all the tweaking with IIT JEE in past 3-4 years, and show me where has the coaching business declined)

IIT Test Prep Company FIITJEE Raises Rs 100 Cr From Matrix Partners

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