British media conglomerate Pearson (NYSE: PSO) Plc. today said it has invested $30 million in India’s education sector. It has formed a 50:50 joint venture with Educomp Solutions Ltd, a leading education services provider, to support vocational learning in India. Pearson will pick up a 50% stake in Educomp’s existing vocational training businesses. The Economic Times reported that Pearson will invest $17.5 million in the JV with BSE-listed Educomp. Following the announcement, the Educomp scrip rose 11.18% to close at Rs3,427.25.
(In the picture (L-R): Khozem Merchant, deputy chairman, Pearson India and Vivek Govil, president & CEO, Pearson India)
Pearson also said it has acquired a 17.2% stake in TutorVista, the Bangalore-based online tutoring and test prep company, becoming its largest shareholder. Pearson will appoint Peter Cohen, CEO of Pearson Education’s US School Curriculum Group, to the board of TutorVista. Pearson’s investment is part of third-round funding for the company and existing investors Manipal Education and Medical Group and Lightspeed Venture Partners have also participated in this round, the company said in a statement. VCCircle reported that Pearson has paid $12.5 million for the stake, valuing TutorVista at $72.6 million. Launched in November 2005, TutorVista has already raised $18 million in venture capital funding. Pearson said it sees opportunities to offer online tutoring services as a companion for its many technology-based learning products. TutorVista’s core market is the US, where it provides K-12, college and grad-school level training in subjects such as English, Math, Physics and Science. It also has presence in the UK and a small unit in South Korea.
“We have great respect for the expertise, capabilities and innovation that Educomp and TutorVista have brought to the education market. We are enthusiastic about being their partners, because we see India not only as a big growth market in itself, but also as a place for us to build businesses that will be relevant across the world,” Pearson CEO Marjorie Scardino said in a statement.
Indian consumers spend an estimated $50 billion every year on private educational institutions and services, Pearson said, outlining the opportunity the company was gearing up to tap. This is in addition to the $30 billion invested by the government each year in the education sector.