Unitus Seed Fund, India’s most active seed-stage impact investor, has invested in a new financing round for Hippocampus Learning Centres, the leading rural kindergarten and remedial school programs provider based in Bangalore.
The new financing round was led by Asian Development Bank with participation also from Khosla Impact venture fund. Hippocampus also announced that it is now operating in four districts in the Indian state of Karnataka, is starting to scale up availability of its EnglishSTAR and MathSTAR tuition programs, and hopes to be operating in 10 districts in South India by next year.
Hippocampus operates learning centres in villages with a population of between 3,000 to 20,000 people. The average income of these parents is Rs. 60,000 ($1,000) per annum, with a significant portion of them earning this from agriculture. Across India, there are 8 crore (80 million) children in families who currently have only low-quality education choices from government or private schools.
To date, 86 percent of kindergartners graduating from Hippocampus’ preschool program are able to read English and Kannada (the local language), and do single-digit addition, making them ready for school. Hippocampus has delivered these results with average tuition fees of Rs. 240 ($4) per month, an amount affordable to the majority of low-income rural families. For even poorer families, Hippocampus offers scholarships with a priority for orphans, children of widows, and girls where guardians are expected to make a small co-payment.
Hippocampus currently operates 128 learning centres in four rural districts of the South India state of Karnataka and anticipates serving 7,500 children and employing 400 teachers in academic year 2014-2015. With the new funding, Hippocampus hopes to expand to 700 learning centres by 2016.
“Our enrolments in preschool have grown 20 fold in 3 years, evidence of the demand for high-quality education in rural India,” said Umesh Malhotra, CEO of Hippocampus Learning Centres. “Our robust, innovative and low-cost framework has ensured that we deliver high learning outcomes consistently, creating the platform for us to scale rapidly across Karnataka and India.”
Hippocampus has been piloting two innovative remedial programs, EnglishSTAR and MathSTAR, which enable children to develop competencies in English and Math respectively. These programs are very cost effective with fees averaging Rs. 100 ($2) per month, do not need to have a specialized teacher, and can address the needs of children at different competency levels.
“Hippocampus is a great example of our investing model. We came in very early as a seed-stage investor when the company was just completing its initial pilot, serving fewer than 200 students. As the company becomes ready to scale up, new later stage investors come in with substantial growth capital,” said Dave Richards, Managing Partner, Unitus Seed Fund. “With this new capital infusion, Hippocampus now has the resources to greatly expand its presence in South India and to prepare for national expansion in the coming years. We’ve been pleased to invest in each of their financing rounds over the past two years.”
Unitus Capital was the financial advisor and Impact Law Ventures was the legal advisor on this transaction, advising Unitus Seed Fund.
Source: Unitus Seed Fund
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