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1. e‐Learning ‐
e Learning India
March 2009

2. Executive Summary
 E‐learning market in India is at nascent stage and highly under penetrated with more than 90% of
the schools still untapped
Market  E‐learning market comprises of
 M lti di i
Multimedia in private schools – Di it l
i t h l Digital content and solutions in private schools
t t d l ti i i t h l
 ICT in government schools – Installation and maintenance of computer labs in government schools
 Online education – Online certifications/courses and online tutoring
 Drivers: Low penetration in schools, Increase in broadband penetration, government initiatives,
Drivers &
Drivers & increase in demand for online courses
Challenges  Challenges: Long receivable cycle, recognition issue
 Education sector has seen many PE/VC deals in e‐learning segment on the back of growing
demand for digital content in schools and online courses in India
Trends  Government is increasing the computer literacy in public schools through PPP contracts
 Private schools moving towards hybrid teaching model, involving traditional and digital content, to
improve quality of education
 Online courses and certificating by foreign universities gaining importance in Indian market
 Educomp is the biggest player in computer education in public and private schools, ahead of its
peers Everonn and NIIT
Competition
 Other players in e‐learning segment include Edurite, Excelsoft technologies, Gurukul Online
p y g g , g ,
Learning Solutions, Hurix Systems
E‐LEARNING – INDIA.PPT 2

3. •Market Overview
•Drivers & Challenges
g
•Trends
p
•Competition
•Key Developments
E‐LEARNING – INDIA.PPT 3

4. Macro Data on Indian Education System
Public Expenditure on Education (% of GDP) Demographics Data
Malaysia 5.9% Age (Yrs) Population (mn)
France 5.7% 0‐4 127
Pre‐School : 2 ‐4 Yrs age group
P S h l 2 4Y
USA 5.3%
5‐9 125
Thailand 4.3%
10‐14 123 K12 : 5 ‐19 Yrs age group
Indonesia 3.6%
India 3.2% 15‐19 114
Higher Education: 19 & above
Higher Education: 19 & above
20‐24 105
India spend merely 0.4%
on higher education 25‐29 94
Demand Supply
Drop out Rates
D tR t
361 mn children should be •Grade 1‐5: 29% 219 mn children actually go
Demand Side •Grade 6‐8: 50% to school
in school
•Grade 9‐12: 62%
At least 15,000 schools
At least 15 000 schools
Total number of schools in India : ~ 1,025,000 charge more than INR
1,250 per month
Public Schools Students 60% 40%
Supply Side
Private Schools Type of School 93% 7%
Note: 2005 Statistics
E‐LEARNING – INDIA.PPT 4

5. Indian education system consists of formal and informal network
Indian Education System
Formal Education System Informal Education System
Professional Coaching Vocational
Schools (K12) Pre‐ Schools
Colleges* Classes Training
Multimedia &
Public Private Public Private ICT in schools Books
and colleges
• Under the purview of the Ministry of Human Resource
Development
• Wi h
With no central governing body for K12, they are ruled by
l i b d f K12 h l db •I f
Informal education system has no/very less regulations
l d i h / l l i
state boards/ ICSE/ CBSE/ International Boards • Multimedia and ICT in schools and colleges is free from any
• HE comprises graduate/ diploma/professional courses. With regulations
a single governing body (UGC), This may be followed by post
graduation course
Note: ICT ‐ Instructional and Computing Technology
Note: * Graduate and Post‐graduate courses
E‐LEARNING – INDIA.PPT 5

6. E‐learning market in India is at nascent stage and highly under
penetrated market
Overview E‐Learning Market (2008‐2012e)
• E‐learning market is estimated worth USD 360 mn in
USD mn
2008 with immense growth opportunities
4,000
4 000 3,750
• E‐learning comprises of –
 Multimedia in private schools includes digital educational 3,000
content and infrastructure solutions in schools as teaching
2,000
aid
 ICT in public schools involves setting up of computer labs 1,000
360
and providing training in computer literacy in government 0
schools 2008 2012
 Online Education includes online tutoring for K12 and
online courses at graduate and post graduate level
Online education
O li d i Multimedia and ICT in Schools
M l i di d ICT i S h l
USD mn
USD mn
1,500 1,250
3,000 Public Schools
2,500
1,000 Private Schools
Pi S h l
2,000 750
1,000 500
160
200 500
70 90
0 0
2008 2012e 2008 2012e
Note: E‐learning at corporate level is excluded
E‐LEARNING – INDIA.PPT 6

7. •Market Overview
•Drivers & Challenges
g
•Trends
p
•Competition
•Key Developments
E‐LEARNING – INDIA.PPT 7

8. Drivers and challenges
Drivers Challenges
Low penetration in schools Long receivables cycle
Government initiatives
G i ii i Recognition issues
Increase in broadband penetration
Increase in demand for online courses
E‐LEARNING – INDIA.PPT 8

9. Low penetration in schools and government initiatives to
promote computer education driving the e‐learning market
Low penetration in schools Impact
• Multimedia and digital content penetration is very low in public and private schools
• Government has initiated various IT programs at school level to increase the penetration rate in
public schools
• Low penetration levels provides opportunity for the players to capture a large chunk of the
addressable market
950,000 Public Penetration 50,000 Private Penetration
schools rate ~3% schools rate ~1%
Government initiatives Impact
• Government aims at increasing the computer literacy at the school level and is promoting
computer education in public schools since 1999
d bl h l
• Central government is funding IT initiative in public schools under the Sarva Shiksha Abhiyaan
(SSA) and ICT@Schools program
• Currently, Around 45,000 schools currently come under the government’s ICT program, and
another 29,000 fresh ICT tenders are expected to be launched during 2008‐09
another 29 000 fresh ICT tenders are expected to be launched during 2008 09
USD bn
b
100 Government spending about
68
USD18 bn in XIth Plan (4 times
50 higher than Xth Plan) on Sarva
11 Siksha Abhiyan
y
0
X Plan XI Plan
E‐LEARNING – INDIA.PPT 9

10. Increase in broadband penetration and demand for online
courses also spurring growth of e‐learning in Indian market
Increase in broadband penetration Impact
• Demand for online tutors has grown in India with the increase in broadband penetration
 Players like Tutor Vista are looking at providing coaching through online media in the domestic market
mn Broadband Subscribers
40
40 Internet Subscribers
18
20
6
0
2007 2008 2009
Increase in demand for online courses Impact
• Demand for quality education in India is too large to be met by existing classroom type teaching
• Many working professionals and students are enrolling for the online education certifications
• IITs, IIMs, and private players such as Symbiosis are encouraging people to access their material
online for the same or subsidized fee
• These institutes have tied up with other institutes to take their courses to more people.
 Macmillan India Ltd, together with IIT Delhi, offers Finance for Non‐finance Executives, International Finance
and Supply Chain Management courses
 IIT‐Mumbai's Centre for Distance Engineering Education Programme (C‐DEEP), started in June 2003, started
its Web courses in 2005.
its Web courses in 2005
E‐LEARNING – INDIA.PPT 10

11. Players facing long receivable cycle and recognition issues
Long receivables cycle Impact
• The receivables from Government usually gets delayed due to the systemic procedures involved
in making payments
• Companies usually raise bills to government schools at the end of each quarter
• Bills raised to government schools take a long time to clear with the total debtor days rising as
high as 170‐180 days for the private players
• High debtor days require the companies to maintain high working capital
Recognition issues Impact
• Pure online players are not legally recognized in India
 All I di C
All India Council for Technical Education (AICTE) is clear that only those who bear its certification can offer
il f T h i l Ed i (AICTE) i l h l h h b i ifi i ff
technical courses
 UGC has no regulatory framework for the sector
• Online courses/certifications have not attained complete recognition in the professional arena
as many fake online courses are prevalent in the market
y p
E‐LEARNING – INDIA.PPT 11

12. •Market Overview
•Drivers & Challenges
g
•Trends
p
•Competition
•Key Developments
E‐LEARNING – INDIA.PPT 12

13. Key Trends
PE/VC firms showing interest in Increase in public private
education sector partnerships (PPP)
Trends
Foreign universities offering Private schools adopting hybrid
online courses teaching methods
E‐LEARNING – INDIA.PPT 13

14. Private equity players focusing on education sector in India
Increased focus of PE/VC firms
• Private equity players are bullish on education sector in India due to the non‐cyclical nature of PE/VC firms see
this sector huge opportunity in
• Education sector has seen many PE/VC deals in e‐learning segment on the back of growing highly under
demand for digital content in schools and online courses in India penetrated e‐
learning market
PE/VC investment in Education Sector
USD mn
USD mn
100 90.0
50
17.5
17 5
0
2006 2007
Date Investor Target % Stake Amount USD
Sept 2008 Arohi Asset Management Excelsoft 10% INR 40 cr
April 2008 D E Shaw Excelsoft 35% 31 mn
October 2007 Capital18 24x7 Learning Solutions Pvt. Ltd n.a. 4.0 mn
October 2007
October 2007 Helion Venture Partners
Helion Venture Partners Hurix Systems Pvt. Ltd
Hurix Systems Pvt. Ltd n.a. 5.1 mn
5.1 mn
October 2007 Manipal Education Group TutorVista.com n.a. 2.5 mn
E‐LEARNING – INDIA.PPT 14

15. Government encouraging PPP contracts in public schools; private
schools adopting digital content to improve quality of education
Increase in public private partnerships (PPP)
• Government is increasing the computer literacy in public schools through PPP contracts Government aims
• These projects are funded out of schemes such as the Sarva Shiksha Abhiyan and ICT@Schools at increasing ICT
• Tenders are floated by state governments for a number of schools in the district implementation in
schools through
• The successful companies in the bidding process are awarded 4‐5 year contracts on Build‐Own‐ PPP contracts
Operate‐Transfer (BOOT) model to provide necessary infrastructure and impart IT education
ICT Installations by vendors
y
Company No. of Schools (FY08) No. of Schools (FY07)
Educomp 6,004 2,808
NIIT 4,652 3906
Everonn
E 3,164
3 164 900
Private schools adopting hybrid teaching methods
• Private schools are moving from traditional black board to digital content to enhance
effectiveness of teaching Private schools are
adopting digital
adopting digital
• Schools outsource installation and maintenance of IT hardware, content and training to private content to enhance
parties on BOOT model the teaching skills
 Schools opting for this product enter into a 3‐5 year duration contract with multimedia‐product suppliers
that provide infrastructure, digital content for teaching and maintenance services
 Multimedia companies charge students directly and share revenues with school authorities
Multimedia companies charge students directly and share revenues with school authorities
 Companies typically charge on a per student basis (average Rs150 per month; usually payable quarterly)
E‐LEARNING – INDIA.PPT 15

16. Online courses by foreign universities finding market in India
Foreign universities offering online courses
• Foreign universities also showing interest in online education market in India Foreign universities
• In 2007, Carnegie Mellon University tied up with Shri Sivasubramaniya Nadar College of see demand for
Engineering in Chennai, in southern India, to offer IT courses. online certifications
in Indian sub‐
• Cornell University has struck a deal with South Indian service provider Easy Educate to offer
continent
courses in finance, management, and human resource to Indian students.
E‐LEARNING – INDIA.PPT 16

17. •Market Overview
•Drivers & Challenges
g
•Trends
p
•Competition
•Key Developments
E‐LEARNING – INDIA.PPT 17

18. Educomp is the leading player in e‐learning market
Major Players Government Schools
• E‐learning market in India is highly under penetrated
with more than 90% of the schools still untapped Company No. of Schools (FY08)
Educomp 6,004
• Educomp is the biggest players computer education
NIIT 4,652
in public and private schools, ahead of its peers
Everonn 3,164
Everonn and NIIT
• Educomp hold 14% market share in the ICT
education market while Everonn and NIIT hold s 7% Private Schools
and 6.7% each respectively
Company No. of Schools (FY08)
Educomp 1,267
NIIT 1,131
Everonn 170
Untapped market provide immense opportunities for the players in the space
E‐LEARNING – INDIA.PPT 18

19. Company Snapshot – Educomp Solutions Ltd
Educomp Solutions Ltd
• Overview: Educomp, founded in 1994, is an e‐learning solutions provider specializing in creation,
management and delivery of learning content
• Business Model:
• Corporate: Uses proprietary content for computer aided learning within class rooms under its “Smart Class”
product. Also licenses out content for ASEAN markets. Has its own books in schools managed under the Edu
Manage umbrella
• Retail: Owns two online portals namely www.mathguru.com and www.learninghour.com. Mathguru.com was
developed in‐house by Educomp, learninghour.com was acquired by Educomp through its acquisition of
ThreeBrix e‐services in FY07
• Expansion Plans: By 2011, Educomp plans to have 4,000 schools signed up for ‘Smart Class’
Financials Revenue Break up (FY08)
INR mn Professional Development
3,000 2,861
Revenue 9%
Retail & Consulting
2,000 Adj. Net Profit 14%
1,101 44% Smart Class
1,000 707
283
0 33%
2007 2008
ICT
E‐LEARNING – INDIA.PPT 19

20. Company Snapshot – Everonn Systems
Everonn Systems
• Overview: Everonn, incorporated in 1997, is a technology‐aided knowledge services company
offering comprehensive learning solutions across the education value chain
• Business Model: Everonn has two broad business verticals:
• IEIS caters to computer education needs in government schools. Till Q309,Everonn has presence in 4442
government schools. For FY09, the Company has set target of 5500 schools.
• ViTELS develops and provides software educational contents and technology services to private schools,
develops and provides software educational contents and technology services to private schools,
colleges, and corporate entities. Till Q309 Everonn has presence in 615 colleges, 520 schools and 29 retail
stores
• Expansion Plans: In 2007, Everonn acquired multimedia content from Aban
Financials Revenue Break up (FY08)
INR mn Others
1,000 932
2%
Revenue
Adj. Net Profit
500 430 VITELS* 40%
138 58% ICT
41
0
2007 2008
Note: * Virtual and Technology Enables Learning Solutions
E‐LEARNING – INDIA.PPT 20

21. Company Snapshot – NIIT Ltd
NIIT Ltd
• Overview: NIIT, started in 1981, provide training in IT, business process outsourcing, banking,
finance & insurance, executive management education, and communication & professional life skills
• Business Model: NIIT has three broad business verticals:
•Corporate Learning Solutions (CLS) provides content development, learning management solution and training
delivery solutions to the corporates
•Individual Learning Solutions (ILS) includes IT training programs like GNIIT
•School Learning Solutions (SLS) caters to computer education needs of government and private schools.
• Expansion Plans: NIIT entered field of technology‐enabled management education, with the launch
of NIIT Imperia. The institute offer programs from the IIM Ahmedabad, Kolkata and Indore, to
working executives, using Synchronous Learning Technology (SLT)
working executives, using Synchronous Learning Technology (SLT)
Financials Revenue Break up (FY08)
INR mn
SLS
15,000
Revenue 10%
10,068
10 068
10,000 7,951 Adj. Net Profit
5,000
756 ILS 35% 55% CLS
573
0
2007 2008
E‐LEARNING – INDIA.PPT 21

22. Other players
Institute History Business Focus and Expansion Plans
• Edurite provides curriculum based digital content solutions for teachers, students
and administrators
Edurite Technologies • Edurite provide its service o about 3,000 schoolsof which 1,500 are government
Started in 2000
Started in 2000
(Part of Tutorvista) schools
• The company plans to expand in school education sector by starting its own chain of
schools
• Excelsoft is total e‐learning solutions provide and caters to schools and universities
as well as the corporate sector
p
Excelsoft Technologies
E l ft T h l i Started in 1990
St t d i 1990
• Excelsoft presently employs around 500 people across Mysore, Hyderabad and New
Delhi
Gurukul Online Learning • GOLS provide e‐learning solution to key markets – Retail (B2C), Corporate (B2B),
Started in 2001
Solutions (GOLS) Institutions, Universities and Mandatory training
• Hurix offers services in three areas: e‐learning solutions, knowledge management
Hurix Systems Started in 2000 and publishing services
• Hurix plans to increase headcount from current 580 to 5,000 in next five years
IL&FS Education and • IETS is a subsidiary of Infrastructure Leasing & Financial Services Limited (IL&FS)
Technology Services Started in 1997 • IETS offers learning content and training modules for schools, colleges, vocational
Limited (IETS) training institutes, governments, and the corporate sector
• Content solutions range from custom content development to conversion services to
Upside Learning Started in 2004 simulations and educational games
• Partners and client present in the US Europe Australia and India
Partners and client present in the US, Europe, Australia and India
Note: The list is not exhaustive
E‐LEARNING – INDIA.PPT 22

23. •Market Overview
•Drivers & Challenges
g
•Trends
p
•Competition
•Key Developments
E‐LEARNING – INDIA.PPT 23

24. Key Developments
Date Development
March 2009 Upside Learning Solutions announced partnership with MindLeaders to bring market‐leading, off‐the‐
shelf, self‐paced, integrated e‐Learning solutions to India. Upside Learning will be reselling MindLeaders’
courses to its clients in India and other markets.
Jan 2009 Educomp received orders from State Government of UP and Assam for a total of 2042 schools. The
combined worth of these orders are INR 120 crores
Aug 2008 Everonn Systems signed an agreement with Indian Institute of Management, Indore for offering
Management programmes through VSAT technology
June 2008 NIIT received the mandate for providing computer and computer aided education to 1.9 million students
in 900 State Government Schools in Maharashtra and Bihar
E‐LEARNING – INDIA.PPT 24

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E‐LEARNING – INDIA.PPT 25