Measuring outcomes in education
A look at emerging market education entrepreneurs
November 2, 2014
Contents
1
Background
2
Measuring outcomes in education
3
Opportunities to get involved
2
3
Hindi Video Content
In-class Activities
Students attend 2 years of after-school tutoring for
15 hours a week at Avanti’s Centres
4
More than 40% of Avanti students place
in the top 1% of the IIT entrance exam
94% 91%
100% 100%
Avanti Class of 2013
Avanti Class of 2014
48%
41%
99th
5
90th
National Percentile (IIT JEE)
80th
Most children in the world are enrolled in
primary school, but few are learning
% of primary age children
enrolled in school
Source: Acasus (2014)
6
% of children who reach a basic learning
level in reading, writing and arithmetic
Parents are looking for alternatives
• Spending 10-20% of total household income on their
children’s education
• Enrolling their children in low-cost private schools instead
of public schools
Delhi – estimated 70% attend LCPS
Punjab – 67%
Accra – 64%
Lagos – 70%
Source: Pearson (2014)
7
As the sector grows, there is increasing private
investment flowing into international education
Original players
New corporate
education entrants
• Digital Education, est. 2012,
with emerging market focus
• BR Education Ventures fund,
launched Mar 2014, Brazil
focus
• Benesse Social Investment
Facility, launched Apr 2013
• $15M to Asian companies
solving social issues in ed
8
New investor entrants
PALF operates at the intersection of three types of
investors, integrating the best of each approach
Focus on
maximising
social impact
Maximize
profits and
scale
Impact
investing
Pearson
Affordable
Learning
Fund
Emerging
markets
investing
Emerging market
experience
9
Private equity /
venture capital
in education
We have 7 investments in our portfolio to date
INVESTMENT
10
DESCRIPTION
1
APEC (Ayala JV), Philippines
• 14 school LCPS secondary school chain
in urban Manila
2
eAdvance, South Africa
• Blended-learning LCPS (SPARK school)
creating school chain
3
Omega Schools, Ghana
• 38-school LCPS chain in Africa (K-10)
4
Zaya Labs, India
• Blended learning class-in-a-box
solution
5
Avanti Learning Centres, India
• After-school labs for university
entrance exam preparation
6
Experifun, India
• Science kit learning solution
7
Sudiksha, India
• Chain of 22 low income preschools
Contents
1
Background
2
Measuring outcomes in education
3
Opportunities to get involved
We have yet to see a true “success” in private
international education for low-income learners
Affordability
Quality
12
Scale
Nairobi, Kenya
Pearson a major investor
Students sit for
national KCPE exam
this school year
Quality
13
Affordability
$5 a month
~300 schools and over
100,000 students
Academy-in-a-box
Chain not profitable
Scale
In fact, quality is the hardest to get right
14
•
Need to take advantage of pedagogy,
technology, and system reform to get right
•
Easy to confuse demand for quality
•
Takes time, effort, and money to ensure quality
–
all scarce and precious resources for a startup
Pearson has a word for this - efficacy
“Measurable impact on
improving someone’s life
through learning”
Fundamental change:
Before -> measuring inputs
After
15
-> measuring outcomes
How does this manifest in practice?
•
Avanti defines specific goals around standardized
test performance – 80% of students in each
center in top 10%
•
Zaya collects data on all aspects of experience to
inform product improvements
•
Data analysis -> teacher time on reports declines ->
difficulty understanding data -> revised reporting
•
Omega conducts third party assessment annually
to determine improvements and performance
•
Math and English, Grades 3 and 6, Omega Schools
+ 11 private + 9 government
KPIs
Data-driven
decision
making
Third party,
independent
measurement
16
Contents
1
Background
2
Measuring outcomes in education
3
Opportunities to get involved
The fuel of a thriving efficacy ‘engine’ is
great human capital
• a
18
• a
Academics
Operations
Business Development /
Sales
Analytics / Technical
Recruiting for startups is hard
Later timing
Less money
Unorganized
Recruiting for international development is hard
Later timing
Less money
Unorganized
Recruiting for a startup in international
development?
We’re making it easier!
Go to affordable-learning.com/the-fund/job-opportunities.html
We’ll let you know about full-time jobs and internships
19
Thank you!
20
We remain focused on providing high quality, low
cost education while ensuring competitive returns
21
Short-term objective
Long-term vision
• To generate a 10-25% IRR on
invested capital over 5-10 years
by helping provide 1 million
children from low income
families with a quality education
that is substantially better than
alternative schools
• To help provide
millions of the
poorest children in
the world with a
quality education, in
a profitable and
scalable manner
• Use this success as a basis for
dialogue with developing-country
governments and donor
agencies about including LCPS
as part of their strategy to
improve educational outcomes
for the poor
• To demonstrate to
governments and
donors that low-cost
private education can
help educate the
poor in a costeffective way
In the two years since PALF was established,
we have:
 Mapped the global landscape for low cost private education
 Deployed over $9M into 7 portfolio companies approaching low cost private
education in innovative, mission-driven companies with strong financial outlooks
- Omega Schools (Ghana), APEC (Philippines), Avanti (India),
eAdvance (South Africa), Zaya (India), Experifun (India), Sudiksha (India)
 Embedded a focus on efficacy in our portfolio companies
 Developed a robust pipeline of investment opportunities
 Catalysed the market to crowd in capital from investors (e.g. Omidyar Network)
 Established a world-class Edupreneur incubator program for early stage companies
first in India and later this year in South Africa
 Learned lessons relevant to Pearson’s strategy and operations in emerging markets
 Taken a leadership role in the global debate on the subject, building successful
relationships with key stakeholders and impact investors
The momentum we’ve built can be used to drive even more impact across
the affordable learning landscape
22
After investing, PALF uses its role as an active
investor to strengthen portfolio companies
FUND VALUE-ADD
Dimension:
Operations
Pedagogy
Strategy
Governance
• Helping company
with day-to-day
operations as well
as key human
capital needs
• Providing
educational
expertise on
efficacy of product /
curriculum design
• Co-creating vision
for scaling
effectively while
ensuring strong
efficacy
• Establishing strong
governance,
especially amidst
corporate crises
A Omega Schools
• Interviewed CAO,
COO hires. Actively
supporting delivery
• Advised on the
teacher training
program
• Co-created Omega
3 year strategic
plan
• Established norms
when finances were
proven incorrect
B APEC
• Former PALF
managers is COO
• Refined curriculum
and established
teacher training
• Created business
plan jointly
• Provide oversight and
relationships with
government
C Avanti Learning
• Help review content
and LMS
• Refined curriculum
and established
teacher training
• Co-created strategy
for understanding
path to scaling model
• Establish board
meeting schedule
and cadence
D eAdvance
• Redesigned
organisational
structure
• Connected team to
use PowerSchool
• Worked to create
sustainable scaling
model
• Formed new board
of directors, with 3
Pearson seats
E Zaya
• Interviewing to help
hire COO and
Business
Development
• Worked through
Efficacy Review on
Zaya software
• Creating strategy to
use CSR funds to
expand reach
• Fathima represents
Pearson on the
board
Description:
EXAMPLES IN ACTION
23
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
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
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
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