IndiaCan is a JV that was started between Educomp and Pearson in 2009 to tap on the vocational training market in India. Educomp in its press release has stated that this move is part of their “consolidation strategy”, a third in a series of exits from non-core businesses. The company says that this stake sale has been made to avoid the need to fund losses and other capital needs of a non-core business. It is not clear if IndiaCan has been making losses that Educomp has not been able to fund.
Educomp further plans to focus on digital content & IP offering and asset backed offerings like schools and colleges. Note that Educomp Online is Educomp’s online education platform. It is not clear if there are other IP offerings or any in the pipeline. But it is clear that Educomp plans to keep its focus on digital. In January 2013, Authorgen, a subsidiary of Educomp Solutions Ltd, had raised Rs 22 crore from Kaizen, a private equity firm and a German media company, Bertelsmann. Authorgen through its website, WizIQ.com enables education service providers to create virtual classrooms and also convert document to flash. It appears that Educomp has also sold 50% stake in Eurokids International Ltd to a group of investors led by GPE India, last month. In 2011, Educomp merged Studyplaces.com after being acquired in 2010. It is worth noting that Kleiner Perkins, Caulfield & Byers (KPCB), Sherpalo Ventures and InfoEdge, all investors in Studyplaces.com had reported that they lost money in the business. Educomp plans to further continue this consolidation process.
Other Developments in the Education Sector
Note that IndiaCan is the second acquistion for Pearson this year. In February 2013, Pearson had acquired the remaining 20% stake in TutorVista thereby increasing its stake in the company to 100%. TutorVista provides online tutoring service to students. In the same month, e-learning site MeritNation raised Rs 30 crore funding from Info Edge (India). With this investment, InfoEdge became a majority stakeholder in Applect Learning Systems, the company that owns MeritNation. In March 2013, online test platform, Rank Junction had raised undisclosed sum of money from Indian Angel Network. In the same month, Skoolshop.com, an ecommerce site run by Occasion Kommerce Pvt. Ltd had raised series A funding from Blume Ventures & others.