Amy Klement
Sarvesh Kanodia
Associate, Investments

Quality Education For All: Our strategic focus in emerging markets and reflections from India

April 25, 2017

Education is a key aspect of our work globally and since 2009, Omidyar Network has made investments in more than 50 education organizations through a unique hybrid structure we refer to as flexible capital.

This structure enables us to invest in for-profit entrepreneurs harnessing the power of markets, as well as make grants to nonprofit and public-sector changemakers who are innovating to bring higher-quality education to millions of learners.

Given our focus on utilizing capital to create sector-level change, and based on learnings through our work over the years, we have refined our investment focus in emerging markets to three key areas:

  • K12 innovative school models: innovative school models and the supporting ecosystem, as well as pedagogical approaches that can directly scale impact and indirectly inspire both public and private education providers to improve learning outcomes
  • K12 ed-tech: high-growth technology products and services, evaluation tools, partnerships, and resources to scale differentiated and personalized learning solutions to meet the unique needs of students
  • Connected skilling: online or blended solutions for skills training/improvement in employability that are industry-linked

At Omidyar Network, we believe in the power of constant learning, which requires a combination of external inputs and internal reflections to drive refinements in our areas of work. Given that we have a global platform with work in Africa, India, Latin America, and the US, we place a premium on leveraging insights and learnings across geographies—and sharing them.

To this end, our global team recently spent an intensive week in India developing an even deeper understanding of the local context through community and school visits, learning about the latest innovations in education through both prospects and portfolio organizations, and meeting with other investors and thought leaders to hear their perspectives on trends and opportunities.

Several themes emerged on solutions that are helping to drive improved quality of education in India, which also resonate with our work in Africa and Latin America. These include:

Parents pursuing school alternatives
With increasing disposable income and an aspirational lower- and middle-class population, many Indian parents prefer to enroll their children in private schools, which are perceived to be of better quality. According to estimates from various industry experts, more than 40 percent of the roughly 260 million enrolled students in India are in an estimated 380,000 private schools. Of these, more than 75 percent are believed to be low-fee private schools with annual fees of less than 20,000 Indian rupees or US$300 annually. The private school penetration in some of our other geographies like Brazil and South Africa is lower but growing, as traditional models alone have been unable to reach all children, learning outcomes are poor, and parents are demanding change.

New platforms to improve the quality of new school models
While there has been a spike in entrepreneurs setting up such private schools across the country, the quality of education in a large proportion of these affordable private schools is too low. Also, while the affordable private schools market is large, it is also fragmented and it has been difficult for education product companies to effectively cater to this segment and build sustainable businesses. Platforms that can provide support services and incentives to improve quality for such schools are critical. Our partner organization Varthana provides loans to more than 2,700 affordable private schools, which are being used to add classrooms, computer labs, and other resources. Varthana is also helping schools in its network improve the quality of education by distributing products of other educational service providers, and by providing financial incentives to schools that demonstrate an improvement in learning outcomes.

Technology as an education enabler
Some parents are spending almost 20-30 percent of income on their children’s education in India. The average household spending on education is 9-10 percent in India, as compared to only 2 percent in the US. While significant amounts are spent on education, outcomes continue to be poor. We believe that technology is an enabler to help improve education quality.

Use of technology in education is still at the tip of the iceberg in India, and several use cases are emerging for both urban and rural settings.For example, a number of funded and upcoming startups are using technology to either provide self-learning solutions through adaptive assessments and videos, or teacher-led solutions with technology-based assistance through lesson planning, assessments, and engaging videos. Our portfolio organization Akshara Foundation, along with EkStep (which is a free and scalable digital infrastructure platform open for other education providers), has developed Genie, an app used to teach English in Karnataka’s government schools. Increases in broadband connectivity and smartphone penetration, reduced data costs, and growth in tech-based solutions to address quality in the private and public school space bode well for an increase in both VC and donor funding activity in ed-tech over the coming years.

Both Brazil and South Africa are also in early stages of growth in ed-tech solutions supported by growing tech penetration outside schools, while efforts are underway to improve connectivity in schools. Our investees, including Geekie in Brazil and Siyavula in South Africa, offer adaptive learning platforms that aim to help solve learning gaps in students.

The list of such potential solutions is long and significant efforts will be required from all stakeholders to move toward the goal of providing quality education to all. We at Omidyar Network are moving forward inspired by all we experienced in the recent India visit, and we are left with these words from a Teach for India classroom in Dharavi, a Mumbai slum: “When I get my job that I have trained for, I’ll remember that my real job is that if I am free, I need to free somebody else. If I have power, then my job is to empower somebody else.”


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