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Jul, 27 2018

Edtech firm Educational Initiatives secures $25M from PE Gaja Capital

The company has two flagship products, Asset and Mindspark, and also has a significant presence in the United Arab Emirates.

Private equity Gaja Capital invests $25M in edtech firm Educational Initiatives Mid-market private equity firm Gaja Capital has invested $25 million (about ₹172 crore) in Ahmedabad- and Bengaluru-based educational technology company Educational Initiatives, marking its eighth investment from its third fund. Gopal Jain, managing partner of Gaja Capital, confirmed the transaction but did not share details of the investment.

“Education is core to our investment strategy and we are long-term believers in the K-12 opportunity in India. Education is poised for its ‘cure moment’. The answer to improved learning outcomes is more a Google Maps of education than an Amazon or Netflix approach,” Jain told ET.

People aware of the development said the transaction closed in the past few days and is a mix of primary and secondary components. It will see the PE firm pick up a significant minority stake in the company, they added.

Private equity Gaja Capital invests $25M in edtech firm Educational Initiatives

For Gaja Capital, 2018 has been an active year. The PE firm manages assets of about $500 million across its three investment vehicles, having already recorded two strong exits — TeamLease and RBL Bank — in April and June, respectively. Both investments were made from its second fund — the $180 million Gaja-II.

The latest investment has been made from Gaja Capital’s third fund, the $240 million Gaja - III, with the firm targeting an overall 12 investments from its current investment vehicle. The firm, which focuses on the education, financial services, consumer and healthcare sectors, has also emerged as one of the strongest backers of ventures operating in the broader Indian education space. It had earlier invested in SportzVillage, EuroKids and CL Educate.

“One size doesn’t fit all. The right solution ascertains where you are, where you want to go, and gives you the optimal path and tools to get there. Educational Initiatives is well placed to deliver on this promise,” Jain said. Founded in 2001 by IIM Ahmedabad alumni, Educational Initiatives had raised early-stage funding from a group of investors in 2010, a list that includes, Footprint Ventures, IFMR and Novak Biddle Venture Partners.

It is unclear if all three investors have exited completely, post the closure of the latest round, and what their stakes are in Educational Initiatives. The company is expected to use the proceeds from the latest round to further build its technology platforms, expand its product portfolio as well as enter new markets, including the US.

The company, founded by Srini Raghavan, Sridhar Rajagopalan, Sudhir Ghodke, and Venkat Krishnan, has emerged as one of the largest ed-tech companies in the K-12 assessments and adaptive learning segments in India.

The company has two flagship products, Asset and Mindspark, and also has a significant presence in the United Arab Emirates.

“Building on our core strengths of diagnostic assessments and adaptive learning, we at EI are working to define each child’s learning path and aligning it with education goals and career aspirations using state-of-the art machine learning and AI tools,” Raghavan, chief executive of Educational Initiatives, said. “This investment from Gaja Capital comes at a time when we stand on the threshold of a new paradigm of learning.”

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