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KG To K12: Focus On Quality, Returns Will Come Later

24 November, 2010

Being a $10-billion industry, as pointed out by Sanjeev Aggarwal, MD, Helion Venture Partners, what is holding investors back from investing in the sunrise Indian education sector up to higher secondary levels, was the key point of discussion in the first session of VC Circle’s Education Investment Summit. The discussion spread over areas like teachers training, assessment, quality of education, contribution of technology, over and above the investment part.

Arun Kapoor, Director, Vasant Valley School, disassociated with calling education sector an industry. According to him, the focus should be on quality of education, more than a price point. Nobody can expect return from investment in a limited period.

“Ours is an over-schooled, under educated society. Schooling is not education,” he said.

According to Gopal Jain, Partner, Gaja Capital Partners, the focus should be on quality at an affordable price point that can deliver a return on the capital. There is a big gap in terms of quality between Tier-1 and Tier-3. What is quality is still a point to debate, he said while expressing his concerns over the regulatory regime in the sector.

Despite all the regulations, there is enough space for innovation, said GV Ravisankar, Partner, Sequoia Capital India.

“Parents should not think that they are outsourcing child’s education from school. Parents’ involvement is also needed for quality education,” he said, adding that investors should understand the constraints of delayed gratification as it is a long-term investment.

Sandeep Aneja, MD, Kaizen Private Equity, also agreed to this view. According to him, quality of education is the most important thing. More interactions with parents are needed for quality education. While seeing this as an investment opportunity, he said investors prefer domain experts to run it.

“Academicians can be the right CEOs,” he said while adding the importance of regulations in this field.

How technology created space for alternative models during recession in the US, was the point made by Samudra Sen, CEO, Learning Mate. The US education system is totally supported by technology.

“Virtual class rooms are registering 25% growth in the US,” he said. According to him, the regulations are broad and innovative in education sector in the US.

Subrat Mohanty, Founder&CEO, Hurix systems, which runs  800 virtual class rooms in India, asserted that technology can’t replace a teacher.

“It can complement him and help him,” he said. According to him the teacher capability is one of the major problems in the sector.

Ashish Rajpal, Founder of iDiscovery which provides content, teacher training an assessment to over 400 schools in small towns, pointed out how parents are willing to pay more for quality. Parents are looking for good education despite of their wages.

“In most of the district HQs, parents are willing to pay Rs 1000 for tuitions when they pay Rs 500 to the schools. They spend more on quality,” he said. But despite different business models, there is nothing there actually to improve learning and to help children, he said.

According to Arun Kapoor, Director, Vasant Valley School, the quality of a conversation between a teacher and students brings the quality of education. For ensuring the quality of education, his firm has two curriculums, one for the teacher to ensure the teacher quality and one for the students.

While summing up the discussion, Sanjeev Aggarwal, MD, Helion Venture Partners, pointed out that quality is essential for any business to assure returns.

“So the focus should be on quality is important, not much on profit making,” he said.  Thinking of regulation in a positive way and taking technology as a part of quality education are really important, he said. He shared his experience of talking to three schools which are providing quality education at less than Rs 1,000 and making an EBIDTA of 40% to tell that it is possible to provide quality education at an affordable price and can make profits. 


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KG To K12: Focus On Quality, Returns Will Come Later

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