‘Handling remote students was a challenge’

Mini Joseph Tejaswi TNN

Bangalore: They are truly an “enterprising couple”. The husband-wife entrepreneur duo, K Ganesh and Meena Ganesh, has struck gold again with their sale of Tutor-Vista to the Pearson Group. Ganesh had started the online tutoring firm in July 2005 with a funding of $2.15 million from Sequoia Capital. Now the firm has been valued at close to Rs 1,000 crore. In 1990, Ganesh set up his first venture, IT&T, with five partners from HCL, where he used to work. That company specialized in maintaining and integrating computer systems. It went public in 2000 and parts of it were then sold to iGate. In 2000, Ganesh and Meena floated BPO firm CustomerAsset. Two years later, it was sold to ICICI for around $20 million. Ganesh also backed startup KPO firm Marketics, which was sold to WNS for $65 million in 2007. He has worked with HCL, Wipro British Telecom, a VSAT company that became Bharti British Telecom. Meena has worked with NIIT and Microsoft and as CEO of Tesco India. Ganesh spoke to TOI after the Pearson deal. Excerpts:

Now that your company has a single majority owner, will you exit this business soon?
This is only the end of our first innings. It is just the halfway point and we are resetting the clock at this point to take TutorVista to a $1 billion company from $213 million now in the next five years. We still own 20% in the company and Pearson will have 76%. Our exit will happen after we reach the $1 billion milestone.

What was the level of business clarity you had when you floated TutorVista?
Five years ago, it was only a paper plan. We were getting into a business which had noparallel or existing model. So the risk was high. Level of clarity was quite low. We were pragmatic. We took an incubation facility at IIIT-B at Electronics City in Bangalore because we were not sure of paying up the 10-month rental advance etc. Neither did we want to make investments in furniture and fixtures.

What were the challenges you faced?
The biggest hurdle was related to handling “remote” issues. Remote students, remote market, handling remote tutors between remote locations, and the general remote nature of the business. But in the first 18 to 24 months, we could see the model working. We hit our firstmillion dollars in 2007. We saw us actually becoming the biggest B2C Indian company in the education space serving the US market, without even employing a single person in the customer market.

How happy are your investors now?
In December 2006, we got another $3 million from Sequoia; Lightspeed Venture Partners gave us $7 million while another $750,000 came from Silicon Valley Bank. Since then, our valuation, branding and reach have gone up significantly and all our investors including Manipal Education are happy. Now Pearson is going to give us further branding, positioning, resources and a global platform.

K Ganesh & wife Meena

Pearson takes control of TutorVista

UK Publishing Group Hikes Stake In Desi Education Co To 76% For . 577 Cr

TIMES NEWS NETWORK

Bangalore: TutorVista, an integrated education services company led by K Ganesh and Meena Ganesh, has sold a 59% stake to to UK-based publishing and media group Pearson for Rs 577 crore.

This transaction would give Pearson a total controlling stake of 76% in the company, making it the largest deal in the Indian education sector. Pearson already had a 17.2% stake in the company acquired in June 2009.

The development was first reported by The Times of India on Monday. The deal values TutorVista at $213 million (Rs 960 crore). TutorVista carried pre-money valuation of $4 million when pedigree Valley investor Sequoia Capital made the first investment in April, 2006. Serial entrepreneur Ganesh’s third blockbuster exit from a startup enterprise would make a clutch of financial investors in TutorVista happy as well.

This means Sequoia Capital, which invested $5 million in two tranches for a 16% stake, will take home around $35 million—almost seven times its investment—for a four year-old startup. Other investors—including Lightspeed Ventures and Manipal Education and Medical Group, which held 10% and 11% respectively—also walk away with four to five times return for their investments in the last three years.

The acquisition will bolster Pearson’s tutoring business as TutorVista provides English language coaching courses for university entrance exams and out-ofclass tuition to K-12 school children for SAT (scolastic aptitude/assessment test), ACT (American College Testing), AP and other exams. It also provides a full suite of services to K-12 schools anduses VOIP to connect instructors in India with school and college students in North America. It also reaches 3,300 classrooms by supplying digital content and technology platforms to private and government schools in India.

Commenting on the deal, Marjorie Scardino, Pearson’s chief executive, said: “TutorVista is an innovative and effective education company that we have worked with and respected for several years. This acquisition signals our excitement about the vitality of India’s education sector.”

The company has 800 employees and a roster of 2,000 tutors. It provides coaching assistance to 10,000 students every month across a network of 60 centres in South India. Its different streams of operation include digital learning content, brick-nmortar tutorial centres and formal schools. The focus is on providing quality education to students in the US and the UK through voice-overinternet-protocol services. TutorVista hires teachers in India to teach students in these locations.

Ganesh said he had started TutorVista to provide affordable education services and content globally. “Together with Pearson, we can make this happen even faster and help millions of students achieve their educational goals,” he said.

Ganesh is said to have first thought of the idea of online tutoring when he found parents in the US and the UK criticize the education system. He had earlier founded a company called IT&T, which specialized in integrating and maintaining computer systems, and later, with Meena, founded one of India’s first BPOs, CustomerAsset, which they later sold to ICICI and is now known as FirstSource.

The Indian government invests $40 billion each year or 3% of GDP in education, while consumers spend more than $40 billion on private educational institutions and services. The US market accounts for 65% of Pearson's revenues from education.

Infy boss to join govt as cabinet minister

TIMES NEWS NETWORK

New Delhi/Bangalore: He’s been a poster boy of Indian infotech, co-founded a company that has become a byword for participative entrepreneurship, given Thomas Friedman the idea for the bestselling The World Is Flat, and himself penned a book, Imagining India. And now, at the age of 54, his shareholding in Infosys alone worth Rs 3,500 crore, Nandan Nilekani has taken on one of the most ambitious government programs ever envisaged—heading the project to equip every Indian with a biometric Unique Identification Card (UIC). This is the biggest movement from private sector to government in India in recallable memory.

Nilekani, who will quit his job as co-chairman of the Rs 22,000 crore Infosys to avoid
any conflict of interest, has been given the rank and status of a cabinet minister, a deadline of three years, a corpus of Rs 100 crore and—perhaps most importantly—the flexibility to draw in talent from the private sector to build his core team.

The lateral entry of business barons into government is fairly commonplace in the US but rare in India. Nilekani’s is the most significant appointment since 1987 when the then prime minister Rajiv Gandhi brought in Sam Pitroda to head the Technology Mission which paved the way for the IT and telecom revolutions.

WHAT’S THE UNIQUE ID PROJECT?

Ambitious | Rs 150,000 cr Unique Identity Card (UIC) project will catalogue personal details of every Indian citizen on smart cards

Detailed | To include name, sex, address, marital status, photo, identification mark and finger biometrics

Hi-tech | Will be based on a sophisticated application called SCOSTA, a secured electronic device that’s used for keeping data & other info in a way that only authorized persons can view it

Versatile | Can be used for a number of things, ranging from use as voter I-card to proof for opening a bank account. Can also help deter illegal immigration

Urgent | Scheme was launched in Nov 2003 and has so far been given to just 31 lakh citizens. Miffed by the delay, the SC pulled up the govt in Jan and asked it to implement the scheme speedily countrywide

Times View

This paper has relentlessly campaigned, primarily through its Lead India initiative, for cleaner, better governance. A good way to achieve this, we’ve said, is to have educated, ethical, efficient and dedicated people from civil society and the private sector join government. We aren’t surprised that it was Nandan Nilekani who’s made this leap of faith — he and his mentor, N R Narayana Murthy, have always been imbued by a sense of public purpose. And we commend Manmohan Singh — himself an accomplished economist-bureaucat — for bringing in a first rate entrepreneur-technocrat for a project of ambitious proportions. May many more Nilekanis bloom. India will be the better for it.

UIC project fits Nandan’s passion
New Delhi/Bangalore: The Unique Identification Card (UIC) project could have as huge an impact as Sam Pitroda’s Technology Mission. In its first phase, it will identify the beneficiaries of schemes on which the government has been spending billions with little guarantee that the money was actually reaching the deserving.

It is learnt that beneficiaries of the National Rural Employment Guarantee Scheme (NREGS), the public distribution system and the still-to-be-enacted Food Security Act will be the first to be given the cards. “The aim is to ensure that development objectives are achieved without leakages and pilferage. It will be targeted at the marginalised population in the first phase,’’ a source said. Other UPA flagship schemes—Sarva Shiksha Abhiyaan, National Rural Health Mission and Bharat Nirman—will also be covered.

Nilekani first got a call from Prime Minister Manmohan Singh in early June, with an offer to join the Planning Commission. He declined, but was intrigued by the prospect of becoming an effective change agent—especially since he’s still relatively young. He stepped down as CEO a couple of years ago to become co-chairman of Infy—which has no other co-chairman, or chairman, but does have an enviable succession process. In a sense, Nilekani’s ability to influence policy from the outside had reached its zenith, it made sense to shape it now from within.

So, when the UIC opportunity came up, it proved irresistible, especially since it is a technologydriven initiative that dovetails perfectly with the core competence of this electrical engineer from IITBombay. The move also fits into his passion for public service. And it has the blessings of his longtime mentor, N R Narayana Murthy.

“It’s like a younger brother going out of home, seeking nobler aspirations. Nandan was the third person I spoke to when I founded Infosys. He is a good conceptualiser, a good thinker, a big picture man...I rank this project on the scale of importance and impact with Sam Pitroda’s telecom project, M S Swaminathan’s green revolution and Prof Yashpal’s Sites (satellite instruction & TV experiment) project,’’ Murthy told TOI.

Other leaders of India Inc also welcomed the move enthusiastically. “It’s a very good development. We need many more Nandans if the government is in the mood to induct professionals. The key is to task them with a specific responsibility that no one else is doing, and give them independence,’’ said HDFC chairman Deepak Parekh.

Nandan Nilekani at home in Bangalore with wife Rohini. He will head the government’s mega ID card program