Unless you are a student or a parent in Mumbai, it's unlikely that you've heard of Mahesh Tutorials. That doesn't matter to the 19-year-old prep institute, which was launched out of a small classroom in Mumbai's Mulund area. It's got venture investors queuing up for a piece of the action.
Recently, Helix Investments, an India-focussed fund backed by New York's Cullman Family and Bloomingdale Properties, paid $12 million (about Rs 49 crore) to buy a 30 per cent stake in MT Educare, the holding company of Mahesh Tutorials. What got Helix excited about Mahesh?
"The total private education sector in India is estimated to be anywhere between Rs 2,000 crore and Rs 3,000 crore, and growing at 25 per cent per annum. There is tremendous scope for further growth in this space," says Cyrus Driver, Managing Director, Helix.
|MT's Shetty: New chapter|
All told, Shetty plans to have 400 centres across the globe over the next two years. "We are aiming to provide global reach in education and training and be the largest player in this field…and these investments will go a long way in helping us achieve our dreams," says Shetty.
MT Educare has a turnover of Rs 35.5 crore and profit margins of about 22 per cent, which it says are holding in the face of rapid growth. Shetty's target is to touch Rs 150 crore in revenue over the next three years. "Mahesh Tutorials has very good credibility in this space and we want to be a part of their expansion," says Driver.
Mahesh Tutorials is not the first prep firm to get investment from a VC firm. Delhi-based Career Launcher had Intel Capital invest $1 million in it way back in 2000.
"The education sector in India has always been fragmented and unorganised. Private money coming into the tutorials business is good as this segment is supplementary and critical to the mainstream education sector," says Nikhil Mahajan, MD, Career Launcher. The other advantage is that VC investment also means a stamp of approval and a passport to global markets.