Pearson Affordable Learning Fund
Overview
PALF is a venture fund investing in start-ups that deliver
financial returns and high quality education
PALF invests in companies that:
• Demonstrate sustainable business
models that can generate market
financial returns over 5-10 years
• Relentless focus on efficacy and learner
outcomes
• Target bottom-of-the pyramid/ lower
income consumer markets
• Have scalable, proven models and
credible management teams
1
PALF Long-term Objectives
Long-term, we want to provide millions of the
world’s poorest children with quality education
Long Term Objectives
• To help provide millions of the
poorest children in the world
with a quality education, in a
profitable and scalable manner
• To demonstrate to
governments and donors that
low-cost private education can
help educate the poor in a costeffective way
2
PALF operates at the intersection of three types of
investors, integrating the best of each approach
Longer horizons and
intense social impact
metric reporting
Focus on
maximising social
impact
Focus on financial
sustainability and
financial metrics
Maximise profits and
scale
Impact
investing
Pearson
Affordable
Learning
Fund
Provide services in regions
that are currently underserved
Emerging market
experience
Emerging
markets
investing
Private equity /
venture capital
in education
We provide additional
value through our deep
education expertise and
relentless focus on
efficacy
Since PALF was established, we have:
1
Established Pearson as a leader in the affordable
education sector
2
Developed a portfolio of seven investments serving
over 20,000 children in South Africa, Ghana, India and
the Philippines
3
Established the Edupreneur Accelerator program in
India and scaled the program to launch in South
Africa
4
Catalyzing the global affordable learning agenda and
enhancing Pearson’s knowledge and learning
2
PALF has built a diverse portfolio of seven affordable
education investments serving over 20,000 children
INVESTMENT
DESCRIPTION
1
APEC (Ayala JV), Philippines
• LCPS chain with 12 schools in urban Manila,
developed through a JV with Philippine’s largest
telecom
2
eAdvance, South Africa
• Blended-learning LCPS with 2 schools in
Johannesburg; efficacy results show Gr. 2 students
performing above avg. SA Gr. 3 student after 1 year
3
Omega Schools, Ghana
• LCPS chain in Africa (K-10) serving 19,000+ children
in 40 schools
4
Zaya Labs, India
• Blended learning school-in-a-box solution embedded in
30 schools
5
Avanti Learning Centres, India
• After-school labs for university entrance exam
preparation; >40% of Avanti’s students placed in the
top 1%
6
Experifun, India
• Science kit learning solution and a winner of the
Edupreneurs India program
7
Sudiksha, India
• Chain of low fee 22 preschools and a winner of the
Edupreneurs India program
2
Post-investment, PALF actively adds value to the
portfolio through a six step systematic approach
Approach to Portfolio Support
Five
Techniques
for Portfolio
Support
6
1
Domain Expertise
2
Business Expertise
3
Network Access
4
Talent Recruitment
5
Good Governance
6
Sharing
Learnings
across
Portfolio
3 Edupreneur Accelerator Program
Edupreneur Program Progress
• Two programs launched thus far in
India (2013) and South Africa (2014)
World’s only accelerator that is…
• Focused on education
entrepreneurs in the emerging
market providing higher quality
education to the lower income
• Delivers an education-focused
curriculum over 3 months with
tailored education mentors
• Run by two education start-up
veterans with experience in
Silicon Valley and India
7
• 25 education companies from 7
countries across Sub-Saharan Africa
and India
• Seed investments made in
Edupreneur India co-winners
Experifun and Sudiksha by PALF and
Village Capital
4
We are also catalyzing affordable education through
partnerships, recruiting talent and working with gov’ts
Key Actions
Detail
Building pipeline
through new
partnerships and
increasing scope
•
Expanded our investment scope to include earlier stage
investments and partner with promising entrepreneurs earlier
•
Designed the Edupreneurs programme in India/ South Africa
to incubate a new cohort of ventures
Recruiting strong
talent to the
affordable
education space
•
Backed strong talent early through the establishment of a
new JV in the Philippines
•
Leveraged our global network to find strong entrepreneurs
(e.g., formal partnership with Ashoka) in the education sector
•
Developed key regulatory and government relationships
•
Worked with the World Bank to help guide their comprehensive
research on low cost private schools regulations research,
starting with Ghana
Developing
stronger
government
relationships
4
We’ve documented key learnings over the last two years
in a published ‘Lessons Learned’ paper
1 The importance of a holistic
approach
• Pedagogy, technology
& system change must
all be used to achieve
access, scale and
quality in education
3 Efficacy requires
2 Focus on local costs
systems
and incentives
• Working with lowincome populations requires a
focus on local
costs
4 Investing in
relationships pays
• PALF systematically embed
efficacy in our
companies
• Investing
heavily in onthe-ground
support pays
dividends
PALF Lessons Learned
8 Insights don’t have
market boundaries
• Gaining
insights in
emerging
markets is
relevant for
Pearson global
businesses
7 Investments require a
long time horizon
• Venture investments
will have a long time
return horizon and
require a tailored
valuation approach
6
PALF is a talent
pipeline
• Attracting and
retaining great talent
requires a bold yet
achievable vision
5
Value of
good governance
• Creating good
governance adds
significant value for
early-stage ventures
PALF has grown into a diverse team with deep investment
and education expertise and experience
PALF
Leadership
Core PALF
Team
Sir Michael Barber
Katelyn Donnelly
• Chief Education Advisor
•
PALF Managing Director
• Chairs PALF Investment
Committee
•
Sits on the Board of most
PALF investments
Yiming Ma
Jacob Kestner
Arvind Nagarajan
• Background: corp.
finance and strategy
• Background: teaching
education strategy
• Background: strategy
and venture capital
• Focus: Leader of
Sub-Saharan Africa
Portfolio/Pipeline
• Focus: Leader of
SE Asia
Portfolio/Pipeline
• Focus: Leader of
Latam & S Asia
Portfolio/Pipeline
Amar Kumar
Ember Melcher
Gregg Alpert
• Background: affordable
education in India
• Background: Pearson
Catalyst Mgr
• Focus: Edupreneurs
• Focus: Edupreneurs,
technology expertise
• 15% time:
S Asia portfolio
Nived Dinesh
• Pearson India
• Focus: S Asia pipeline
Broader
PALF
Ecosystem
in Pearson
Pearson Legal:
Graeme Baldwin, Deputy General Counsel/ SVP
Pearson Corporate Finance: Soren Koren, SVP
Greg Blair, Analyst
Pearson Regional Leaders:
Fathima Dada, MD of Pearson Inside Services/ Direct Delivery
Riaan Jonck, CEO of Pearson South Africa
As of Jan. 2015, PALF has grown into a $65M venture fund,
the world’s largest pure investor in affordable education
In January 2015, Pearson committed an additional $50M to PALF
following PALF’s success with its initial $15M venture fund
Strategy for PALF
1 Expand to new
geographies

Expansion
strategies
We want to grow our
portfolio to include
investments in Latin
America and other
emerging markets
2 Invest in new
business models

We are looking to
expand our portfolio
into new business
models such as higher
ed & vocational
3 Scaling faster and
growing bigger

We are searching for
more and larger deals
to provide more highquality affordable
education to all!
Appendix
12
PALF INVESTMENT COMMITTEE MEETING
PALF Investment Committee comprising of Pearson’s most
senior leaders approve all investment and concept notes
PALF Investment Committee Members
John Fallon
Phillip Hoffman
• Chief Executive Officer
Pearson PLC
• Head of Corporate
Finance and Strategy
Sir Michael Barber (Chair)
• Chief Education Advisor,
Pearson PLC
13
Tamara Minick-Scokalo
Luke Swanson
• Head of Growth Markets,
Pearson PLC
• Transformation Director,
Pearson PLC
•
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Portfolio: APEC
Located in Manila, Philippines
Chain of low cost, employability-focused secondary schools
Now at 12 schools and over 1,000 students
Partnership between Ayala and Pearson
$35 a month
Curriculum is focused on real world skills and English
literacy
•
Portfolio: Avanti Learning Centres
Located in Mumbai, India
High quality science education company with 600 students in 9
learning centres and 4 schools across India
• 15,000 applicants for 450 seats in 2014; ¼ the cost of competition
• 3x revenue growth year on year. $5Bn industry in India
• >40% of Avanti’s student place in the top 1% in college entrance
exams
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Portfolio: Omega Schools
•
Located in Accra, Ghana
Started with 10 schools summer of
2011 now at 38 schools and over
20,000 students
Cashless, daily fee system –
accountability from parents
Workbooks, not textbooks
iPad data and student information
systems
All costs localised
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Portfolio: eAdvance
Located in Johannesburg, South Africa
Blended learning model pioneered by
Rocketship Education
Currently 2 Spark Schools with over
350 students
Plan to reach 64 schools and over
60,000 students
First private African primary school
network to implement blended
learning model
•
Portfolio: Zaya Labs
•
Located in Mumbai, India
Holistic blended learning solution
provider for primary schools
In over 30 schools and reaching
1,500 students this year
Provide schools with “LabKit” and
“ClassCloud” to ensure online and
offline learning in low-income settings
$5/student/month
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Portfolio: Sudiksha
•
Located in Hyderabad, India
Edupreneurs India 2013 co-winner
Network of 22 pre-schools across
Andhra Pradesh and Hyderabad, with
92 employees and teachers
Utilises local, unemployed women as
teachers and employees
Tuition-fee model of $8 per month per
student
The company’s main customers are
the parents of urban, poor children
from ages 2-6 years old who cannot
afford traditional pre-school education
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Portfolio: Experifun
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Located in Bangalore, India
Edupreneurs India 2013 co-winner
Low-cost, interactive science learning
products, called Caboodle, aimed at
improving science learning at the 6-10
grade level
Pilot programs launched in 15 schools
The company sells to LCPS serving
poor students, in two forms; a teacher
kit and student kit through one-time
sale model with an average sale value
of 1L to 1.5L INR.
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Pearson Portfolio company: Bridge International
•
Located in Nairobi, Kenya
Now at 300 schools and over
100,000 students
Cashless, mobile money
payment
$5 a month
Teaching curriculum is all on
tablets
Academy-in-a-box
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