Sequoia Capital India Advisors Pvt Ltd, the Indian arm of the US-based venture capital firm, today announced its second round funding of Rs 25 crore to city-based K12 Techno Services Pvt Ltd, which runs 70 Gowtham Model School units in Andhra Pradesh.
This, along with an earlier investment of Rs 75 crore made in July 2010, has been jointly put by Sequoia and SONG Investment Advisors in an 80:20 ratio. With this, Sequoia-SONG hold 49 percent in K12 Techno Services while the rest is with the promoters.
K12 Techno Services managing director M Venkatnarayana said the funds would be used to open 25 new schools, upgrade infrastructure and invest in teacher training this year. It is in talks to open 30-40 schools in Orissa, Chhattisgarh, Maharashtra and Karnataka next year. It has tied up with Brilliant Tutorials for partnership in IIT-JEE preparatory courses, with CfBT Education Trust (UK) for teacher training and the Indian School of Business for training school principals in business management.
Sequoia has invested in two other education ventures, TutorVista and Brainvisa, apart from K12 Techno Services.
It is looking for scaleable ventures in online education, test preparation segments, according to its managing director GV Ravishankar. The education sector is worth $40 billion, he said, but it was a tough-to-execute market.
The company is looking to invest $500-600 million over the next three to four years in its traditional focus sectors of healthcare, infrastructure, agri-business and education, among others.
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He said the outlook for early-stage venture financing in the country was bright with significant growth was expected over the next few years and entrepreneurs coming up with low-cost models for education and healthcare.
“Our model is to find a good company in a good market, be invested and grow with the company,” he told the media. Sequoia’s India corpus is $1.4-1.5 billion, of which $900 million has been invested in about 50 companies in the last 10 years.
Sequoia’s typical investments were in the range of $5-25 million, and the exit is usually after five years. Its three recent full or partial exits from SKS Microfinance, Paras Pharma and Manappuram Finance had been good, Ravishankar said.
In the next 12-18 months, another 6-8 companies would go public, he said indicating it could consider exiting from these. Lovable Lingerie, from which Sequoia recently exited, has its IPO ongoing, while Micromax is in the pipeline.