In India today, 4 per cent of children never start school, 58 per cent don’t complete primary schools and 90 per cent don’t complete their studies. Students drop out due to a lack of availability of schools in remote areas, lack of awareness and child labor among the lower income population. Moreover, capacity constraints also negatively influence uptake of school education and poor sanitation often results in girl students’ dropout post puberty, especially in the age group of 11 to 14 years.
Social enterprises are working around these challenges through advocacy and capacity enhancing solutions. The private sector, especially enterprises that deliver services to the BoP, plays an important role in improving access to education. These enterprises offer a range of services from early childhood to adulthood and are present in formats such as pre-schools and after-school classes, computer academies and vocational & skill development institutes. A prospective area for growth and investments is the pre-school segment: with the increasing demonstration effect on the demand for their services, pre-schools are moving to villages as well.
However, education service providers catering to low-incomers face challenges such as low government expenditure on education, poor infrastructure facilities, high student teacher ratio, outdated curriculum and poor quality standards. On the other hand, the size of the Indian education market is about USD 63 billion and is expected to grow at 20 percent annual growth rate to cross USD 100 billion by 2015.
Private equity and venture capital is expected to increase in the vocational education segment as well as learning solutions. Here we look at 8 incubators, VC funds and organizations working to improve education in India:
1. Aavishkaar: based in Mumbai, this early-stage investment fund makes equity investments in social enterprises that focus on the base of the pyramid population from a variety of sectors including agriculture, healthcare, water and sanitation, education and energy among others. Within the education sector, they have invested in Butterfly Fields and Karadi Path.
2. Acumen: Acumen raises charitable donations to invest in companies, leaders, and ideas to serve low-income population. They started investing in Education in 2011 with a focus on education services and skills or vocational training for low-income customers, creating and supporting 500 jobs so far. The Indian ventures they have made an investment in are Hippocampus and Edubridge.
3. CIIE – Centre for Innovation, Incubation and Entrepreneurship: apart from incubating and investing in over 50 Indian ventures, CIEE has taken up several initiatives to strengthen India’s entrepreneurial ecosystem. They operate within the education sector supporting the iniciative iStar, a continuing education school, which aims to equip students with job oriented skills through out their career.
4. Michael and Susan Dell Foundation: they have partnered with more than 650 organizations working to improve health and educational outcomes for children worldwide. MSDF began working in India in 2006, targeting six major cities with 18 million slum inhabitants, including 7 million children, and the goal is to ensure that 80 per cent of students involved with their programs achieve grade-specific competency by 2018. Under the Urban Education Program, three organizations are supported: CAP Foundation, Save the Children and Bodh Shiksha Samiti.
5. RTBI – Rural Technology and Business Incubator: Supports entrepreneurs in building ventures to promote livelihoods, education, healthcare, agriculture, connectivity and financial inclusion in India’s rural areas. Conceived by the Indian Institute of Technology Madras (IIT-M), it provides an incubation system suitable to entrepreneurs at any phase in their venture. They have made an investment in Edutor, Unclassroom and Edutainment.
6. LGTVP: investment fund part of the The Liechtenstein Global Trust (LGT), group of the princely House of Liechtenstein, the LGT Venture Philanthropy supports organizations with outstanding social or environmental impact, providing financial intellectual and social capital to supported organizations. In India, they have made an investment in Aangan Trust, Educate Girls and Streetfootballworld.
7. Unitus: Unitus Group has positively impacted more than 20 million families living at the base of the economic pyramid. Out of 53 investments made by Unitus around the world – 39 are made in India – one has been made in the education sector: Hippocampus, which runs pre-schools and after-school programs for English and Maths in rural Karnataka.
8. Unltd India: UnLtd India offers entrepreneurs a complete ecosystem of seed funding, advisory services, incubation support and co-working space to launch their ventures. They have 29 education sector companies at their portfolio, including New Resolution, Sweekar Foundation, Jeet Foundation and Avanti Fellows.