Lok Capital, a venture capital firm focused on bottom-of-the-pyramid (BoP) market, and , the social venture capital investor, are investing $1.2 million in Karnataka-based rural education service provider Hippocampus Learning Centres (HLC).
This is the first investment of Lok Capital and Acumen Fund in the education sector. Earlier, Unitus Seed Fund, an initiative of the Unitus Labs, invested an undisclosed sum in HLC. In 2010, the firm had also raised Rs 1.8 crore from angel investors.
“HLC has a tremendous opportunity of providing quality education to a massive group of young children. HLC’s pedagogy, ability to impart learning through its centres and teacher training processes, and focus on learning outcome will ensure robust instructional delivery at scale,” said Umesh Malhotra, founder and CEO of the company.
HLC aims to improve the existing child education system in rural areas. The firm sets up learning centres in villages and offers pre-school and after-school programmes (teaching English, Mathematics and Kannada) to children aged between 3 and 10 years. Currently, it has centres in two districts of rural Karnataka.
The monthly fee charged for each child varies between Rs 60 and Rs 100. As of now, Hippocampus is working across 90 villages, employs 300 people and reaches out to 5,000 children.
“Education is a crucial game-changer in addressing social and economic inequalities. Private investments in sound and replicable business models like HLC and PPP initiatives with government for school management are pivotal in addressing the primary education imperative," said Ganesh Rengaswamy, partner at Lok Capital.
Lok Capital, which manages two funds with a corpus of around $90 million, has invested in companies like Ujjivan, BASIX, Janalakshmi and Ashirwad. Most recently, it had invested $5 million in IFMRL Rural Channels & Services, along with Proparco. Last September, Lok Capital also invested $3 million in the rural BPO firm RuralShores.
“The private sector has a critical role to play in creating education innovations that serve the poor. These customers are increasingly demonstrating their willingness to pay for quality solutions and demand accountability for them,” said Ankur Shah, director (interim India) at Acumen Fund.
This is a back-to-back transaction for Acumen Fund, which recently invested $2 million in BASIX Krishi.