New Silk Route Partners, an Asia-focused private equity and growth capital firm, has acquired a significant minority stake in Hyderabad-based education support services provider Varsity Education Management Pvt Ltd for an undisclosed sum, the firm has said in a statement.
Varsity Education offers a plethora of services like curriculum development, teacher recruitment & training and facilities management, and has a 10,000-strong employee base. The company claims to have served over 300,000 students across Karnataka, Andhra Pradesh, Maharashtra and Tamil Nadu.
Incorporated in 2006, New Silk Route is a private equity and venture capital firm specialising in growth capital and buyout investments with $1.4 billion under management. It primarily focuses on consumer services, education, infrastructure, telecom, manufacturing, IT, engineering and financial services space, and prefers to invest in India, South Asia, the Middle East and other emerging Asian economies.
“We see tremendous potential in the portfolio of services which are being offered by Varsity. India needs to massively ramp up the scale of its education sector and will face huge challenges in the delivery of consistent, high quality academics and student experience,” commented Parag Saxena, founder and CEO of New Silk Route Partners.
Prior to this deal, New Silk Route invested in Beaconhouse School System, one of the world’s largest K-12 chains catering to over 200,000 students. In January 2011, it had also invested up to $25 million in Hyderabad-based Sri Chaitanya Educational Group, which claims to be the country’s largest network of private schools and junior colleges.
In another significant deal last year, British media group Pearson Plc. acquired Bangalore-based education-cum-consumer Internet services firm TutorVista Global Pvt Ltd by increasing its stake to 76 per cent for $127 million (Rs 577 crore) and valued the company at $213 million (around Rs 960 crore).
According to a recent report by Anand Rathi Financial Securities, a Mumbai-based investment bank and stock broking firm, the Indian education sector is bigger than the USA with $600 billion in yearly overall education spend at comparable prices. India’s yearly growth in overall education spend at 15 per cent is also one of the fastest in the world, it has stated.