The TMA Pai-family owned Manipal Education & Medical Group, which straddles the domains of healthcare and education, is also an active strategic investor betting on seasoned entrepreneurs. The bet on TutorVista, an online education-cum-formal school business, appears to have paid off for the Group which has exited the firm following UK-based Pearson acquiring controlling stake in the entrepreneurial venture founded by serial entrepreneur K Ganesh. With this deal, MEMG may have to review its stated vision of becoming a KG-to-PG (covering the kindergarten to university spectrum) player. MEMG has already bucketed its higher education business under Manipal Universal Learning. With TutorVista, it had forayed into the formal K-12 business lending the Manipal brand name to the schools run the venture. In an e-mail interview with VCCircle, Dr. Ranjan R Pai, CEO & MD, Manipal Education & Medical Group, talks about the successful exit and new plans for the education business. Excerpts:-
What was MEMG's total investment in TutorVista?
MEMG invested around $8 million over two rounds of investment (Series B and C) in 2007 and 2008-09.
The Tutorvista acquisition paved the way for an exit for MEMG. Could you give us a sense on the exit multiples for MEMG?
MEMG made a multiple of around 3X.
MEMG has a stated vision of straddling the KG-to-PG spectrum. Would this deal mean that Manipal Group will have to go solo on the formal school business or would you focus on higher education alone?
Well, we are still interested in K-12 segment and will reconsider going at it alone or with a partner.
Will TutorVista continue to use the Manipal brand for the K-12 business. How does this arrangement work?
The brand usage is only for the existing schools that are currently established and for a few schools that were in the pipeline. Going forward, no new schools will carry the Manipal brand.
How do you assess the valuation of TutorVista at Rs 1,000 crore in a business that is five-years-old? Will MEMG place more bets in similar education ventures? If so, which are the sub-sectors you would look at?
Valuation for TutorVista is a fair one especially for a company with great potential and a fantastic management team. Yes, MEMG is open to more such investments in the education services space and, in addition to this, will also look at healthcare and lifesciences as other areas of interest to invest.
What is the timeframe and roadmap for Manipal Universal IPO? Do the attractive valuations for TutorVista make education a hot bed from the investor/IPO point of view?
Timeframe for MUL IPO is not decided yet. The decision will be taken by the board of MUL. Education globally has always been attractive to investors and the valuation of TutorVista is not something that is out of the ordinary. The decision to go IPO depends on the needs of the company and depends from company to company.