Should VCs & PE investors bet on education business?

I agree with you Veena. Education is going to be a multi billion dollar business in India in coming years.

Let me start by saying that " if i had money....then i would have invested in a school or started a school". I would have taken a top to bottom approach - I mean i would have started the institute with Professional courses and then moved into secondary and higher secondary classes. Reasons are very simple:

1. Education is like "Roti, kapada aur Makaan". No Education - No Roti, Kapada Aur makaan.

2. There's only Uptrend provided you spend on infrastructure.

3. It is profitable :- Todays world for a MBA course, an individual spends close to 5 lakhs (2 years), MBBS (15-30 Lakhs), Dental (12-18 Lakhs). Now imagine if you have colleges across 15 cities.

As a VC funder i would prefer to invest in Education Industry...as it is promising, adds value to the students by offering best infrastructure and knowledge, great returns.

So why should VC Investors not look into the education industry.

I also believe VCs and PE investors should bet on Indian educational business. Today majority of Indian population is badly in the need of education. We don't have sufficient schools, proper facilities everywhere because of which maximum people are more than half of the small children population are deprived of education. Many children cannot even study because they cannot afford it and are bound to work in small age.

Yes Veena madam

Though grouped under non profitable, education is a very profitable business in India. Especially with global slowdown people are looking forward on higher education.  There is huge potential ,especially in the private sector(inefficient public sector)  and many foreign universities are eying Indian market.

Recently I read somewhere that majority of the vc & pe investors were planning to invest heavily in education and related due to attractive return.But there are regulation related issues.

[Also we need heavy investment in the field of education, whatever be the source.  Only very few among the top quartile educational institutions in India qualify for global best ratings. For a country with such a large population and depending heavily on its human resource, current education facilities and infrastructure are inadequate( consider the number of iims,iits,iiss etc ). Opening up will also attract global players - so the government should also welcome this] 

Yes, i do agree that the VCs and the PE funds must invest in the education sector.

I believe that there is a long way to go for the education sector in India, there is a need of many schools and colleges in our country.

All the corporates have started either starting their school or a management institute.

The education industry promises a lot of returns as compared to other industries.

In a recfent article i had read that in the last census only 5% of the indian population is graduate, we have a tremendous space to invest in the education sector, as day by day the education is increasing with the awareness.

Finally, a simple example, various jobs had graduation as minimum qualification , now that has changed to PG as minimum education.

Hello Veena Gupta, 

Good education is seen as a stepping stone to a high flying career and represents a great paradox. On the one hand we have IIMs & IITs that rank among the best institutes in the world and on the other hand there are number of schools in the country that don't even have the basic infrastructure. Even after more than 60 years after independence we are far away from the goal of universal literacy. But on a positive note, Indian professionals are considered among the best in the world are in great demand.

Which signifies the inherent strength of Indian education system?

Yes there is some thing common between both investment and education both are primary concern of an individual, as investment is needed for the growth and development of an individual and country as well as basic education is also needed for the development of an individual and country. So its a very good combination of investing in education.

And talking fundamentally education is the best According to a World Bank report there are more than 7,40,000 formal schools; more than 3.6 million teachers are working on full time basis; there are more than 175 Universities offering under graduate and post graduate courses and about 6000 colleges affiliated to these universities. This cannot fulfill the country’s requirement so it’s a right place.

Investing in Education is investing in our countries future; this investment may or may not yield high ROI at present but definitely if there is no future of the country then who will invest and on whom will invest. It’s a long term investment with a combination of zero risk and high returns.

Yes, institutional money should be directed towards building education sector. However, I strongly feel that there has to be a focus on building physical infrastructure accross the country. This should include a mix of online and offline learning. Investing in companies which bring basic schooling services at reasonable price + retaining professional quality in tier 2 and tier 3 towns would really make sense. This would mean longer break-even but at the same time make the model extreemly sustainable in the long run. Focussing on pure e-learning to generate qucik returns in not sustainable and benefecial for the larger society. At the end there is a large demand is for basic education (70% of population is not in urban lands) and not in the fancy e-learning.