There has been a surge of companies focusing on the K-12 Segment in India which is very much needed but there are other areas in education that also need to be looked at. For instance, higher education will become a US$50 Billion Market by 2020 from the current size of $10 Billion. Also, the internet penetration in India is very low (~10%) in comparison to other developed/developing countries (40-80%). So edu-companies, over the next 10 years, will have to reach close to where other countries are, and grow at least 4 to 6 times. Innobuzz is one such player, with all these thoughts well contemplated upon.
“I am an entrepreneur since I was 14 years old. My first venture was Tamranda, a web solutions company. I guess things are very simple when you are young. Then, in 2007, I was not learning anything new from the hosting business and I decided to sell the business to a US based hosting company. I partnered with my school friend, Atul Agarwal, and Innobuzz was formulated,” says Ankit Oberoi, Co-Founder, Innobuzz.
Forming the core team is very critical for a startup. It took Ankit and Atul Agarwal, Co-Founders, Innobuzz, about 2 years to hire their first key employee. Currently they have about 85 individuals on their payroll and about another ~180 People on franchise payrolls. The core team currently includes Ankit as the CEO, Atul as the CTO, Kiran Shetty, Head Operations, Rajni Chauhan, Assistance Operations Manager, and Harneet Kaur, Head-Human Resource.
Bulk of their revenue, comes from B2C Sales at the moment, which they make by selling their Training Services (Classroom) and Product (Distance Learning). They have recently finished developing a product which according to them will solve the hassles for Tier 2/3/4 Technical Colleges as well as IT Training institutes.
Apart from a few good players, the Innobuzz team finds the industry to be quite out-dated. Not just in terms of the curriculums, but the processes/ procedures also. Recently, they did a survey on the IT Training Industry(covering IT Training Institutes with local/regional presence) in which about 200 organizations participated, and what they found out was amazing. 85% of the units do not have any ERP/Processes. Lead Management is done via Excel in majority cases, No formal Student Registration/Examination/CRM system; anything from Billing to Inventory is pain for them and a clear absence of training delivery!
Ankit and his team have put in a lot of efforts behind the research and have come out with a proper analysis of the Indian education-sector scenario. In the next 10 years, a lot of action is expected in the Indian Education Space. The primary reasons why the education sector will grow are:
- Government spending on Education will increase steadily. The Indian Government has started to understand, that if India needs to become a Global Superpower, we will need a large pool of educated technical human resource. If you bring up any socio-economic problem in the country, it is directly or indirectly liked to the quality of the education system.
- Private equity/VC investors are already finding the education sector attractive for long-term investments. We are witnessing a high capital inflow for the education sector from abroad.
- Average spend per capita on education will rise. People will not mind paying more for quality education.
India currently has the largest illiterate population of any nation on earth. We still have about 25% of our population illiterate. I won’t be surprised if the complete education market grows by 20 times its current size, within 10-15 years from now.
“Being an entrepreneur, with no formal work experience, I’ve faced a lot of challenges and still do, every day. I am happy with the knowledge acquired/being acquired during this process. Everybody knows that getting the initial sales is very important for a startup. However, luckily, we haven’t really faced a lot of big issues that side, and have been cash flow positive from Day 1, our survival was never dependent on external capital. We did approach a few investors initially, but we never got past the first meeting/call, so instead of spending time there, we focused on the business instead,” says Ankit, explaining the challenges faced by a startup.
Apart, from that, some business basics like Accounting (Service Tax, VAT, TDS, FEMA, Double Taxation) and Human Resource (maintaining retention levels, finding good employees) have been a challenge. As a result of their efforts, today, they have a good team, but the challenges are even larger, the biggest one being achieving sustainable growth rates, something unique for them as they have seen the figure at 300%!
Innobuzz is an emerging startup in the education space. Do give it a look!