Neev Fund invests Rs 50 crore in Mahendra Educational LTD

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Neev Fund, a private equity firm backed by the State Bank of India and the UK’s Department for International Development, has pumped in Rs 50 crore in Mahendra Educational Pvt, a Lucknow-based exam coaching institute.

Mahendra, which has 135 coaching centres, helps candidates prepare for bank probationary officer exams and railway exams and conducts programmes for the National Skill Development Corporation. NSDC is a public-private partnership company that funds, creates and supports vocational training institutes.

“We will deploy this capital into skill development centres in states with low capital investment,” said Naveen Kumar Jain, managing director of Mahendra. The funds will be used for skill development in Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar, Odisha, Jharkhand, West Bengal and Chhattisgarh.

“This investment falls in line with SBI’s plans of promoting and encouraging ethical investing,” said Varsha Purandare, managing director of SBI Capital Markets.

Founded in 2010, Neev Fund has invested close to Rs 500 crore across sectors. As part of its strategy, it provides capital to businesses that can create social impact. Its portfolio includes an agri-logistics company owned by F1 racer Narain Karthikeyan, solar and wind energy generators, cold storage logistics companies and dairies.

Mahendra is currently focusing on competitive exam preparation and is also a training partner with NSDC and the Ministry of Skill Development & Entrepreneurship to provide vocational education and skill development training. It proposes to increase the number of skill development centres in under-invested states to 250 by 2021 from 19 now.

“In India, the ratio of applicants to higher education seats is among the highest in the world. This drives the need for tutoring. Further, tutoring can be for profit, making it attractive for investors,” said Danish Faruqui, a partner at LEK. Consulting’s global education practice.

Started in 1995, Mahendra offers an online speed test that is popular with aspirants for public sector bank jobs. The company competes with CareerLauncher and Careerpower and provides a speed test series for the Institute of Banking Personnel Selection.

“There’s an exponential growth in the services needed right now in the education and test-prep space,” said Adarsh Khandelwal, co-founder of Collegify, a college admissions consultancy. “Investors have become a bit cautious now and are looking for profitability from day one, but are willing to pump in money if the business model is strong.”

According to a study by KPMG and Google in 2017, the online education market in India is expected to reach $1.96 billion by 2021 with the number of users growing to 9.5 million from 1.57 million.

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