Bangalore-based Hippocampus Learning Centres Pvt Ltd (HLC), which offers education services to rural children, has raised Rs 14.4 crore ($2.39 million) led by the Asian Development Bank (ADB). Existing investor Unitus Seed Fund put in more while Khosla Impact Fund came in as a new investor in the company.
Multilateral development finance agency ADB is investing Rs 10 crore while Unitus Seed Fund and Khosla Impact Fund are together investing Rs 4.4 crore in the company.
The funding will help the education firm expand its preschool programmes to over 700 villages in Karnataka by 2016.
“Our enrollments in pre-school have grown 20 times in three years—evidence of the demand for high quality education in rural India. Our robust, innovative and low cost framework has ensured that we deliver high learning outcomes consistently, creating the platform for us to scale rapidly across Karnataka and India,” said Umesh Malhotra, founder and CEO of HLC.
Hippocampus was founded in 2011 by Malhotra, who holds a B Tech degree in Metallurgy from IIT Madras. Prior to setting up the education venture, Malhotra founded Bangalore Labs, which worked in the remote infrastructure management space. Earlier, he was business manager at Infosys.
The company currently offers over 15,000 titles, covering 48 subjects and seven languages from around the world, with an aim to create reading habit among rural children. The titles include classics, hobby books, general knowledge, fiction, folktales, adventure, fairy tales and graphic novels.
Hippocampus operates 128 learning centres in Karnataka with a student base of over 7,500.
“Investing in human capital brings about powerful social change and this investment will create opportunities for children to realise their full potential. This inclusive business model developed by HLC has good potential for replication in other states in India, as well as in other developing countries in the region,” said Aniruddha Patil, senior investment specialist at ADB’s private sector operations department.
Earlier this year, Hippocampus raised $600,000 (Rs 3.7 crore) from Unitus Seed Fund besides existing investors Acumen Fund and Lok Capital.
In May 2012, it had raised $1.5 million from Lok Capital, a venture capital firm focused on bottom-of-the-pyramid (BoP) market and social venture capital investor Acumen.
This marks second back-to-back private sector investment in India for ADB, which has been largely focused on supporting public sector projects in the country.
Last month, ADB signed an agreement to make an equity investment of $50 million in Welspun Renewables Energy Ltd.
In this space, most recently, Sudiksha Knowledge Solutions Pvt Ltd, which operates pre-schools in underprivileged areas in urban Hyderabad, raised Rs 30 lakh ($50,000) from Pearson Affordable Learning Fund (PALF), an education fund run by UK-based education company Pearson Plc.
(Edited by Joby Puthuparampil Johnson)