There are plenty of investment opportunities in the education sector in India’s rural areas but concerns over generating profit because of infrastructural and behavioural challenges are deterring potential investors, panellists at the News Corp VCCircle Education Investment Summit said on Thursday.
“Our belief is that we are dealing with a sector that is underpenetrated,” said Anurag Agarwal, partner at Aavishkaar, an impact investment firm that has made some bets in the education sector. “(But) investment potential is limited because of the problem of how to marry the affordability aspect with profitability aspect.”
Srikrishna Ramamoorthy, partner at impact investment firm Unitus Seed Fund and the moderator of the session, said that many education companies are getting seed funding but fewer companies are getting growth capital.
This is because education companies are facing difficulty in scaling, particularly in rural areas.
Parinita Gohil, partner at Learning Delight, which offers digital learning tools to help teachers and students in Gujarat, said the biggest challenge it faced was resistance to change, particularly in terms of accepting technology.
Learning Delight, which uses government infrastructure and taps into the corporate and social responsibility funds of big business houses, is looking to replicate the model in rural parts of other states, too. “However, the difference in curriculum of different states is a big challenge,” she said.
Lopa Gandhi, founder of Ugam Foundation, said that the rural market is hugely underserved. The company is working in Jharkhand state where the level of education is dismal. “In Jharkhand, we work with government schools because some of the most marginalised are studying there,” she said.
Gandhi also said that some of the biggest barriers are poor teaching skills and behavioural issues. Transport issues, power problems and poor Internet connectivity are other challenges.
Brajesh Mishra, co-founder of non-bank lender Varthana, said that entrepreneurs focus more on the product and take distribution for granted. The aim should be more about how to address the challenge, he said.