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PE firm set up an Accelerator

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Kaizen, a private equity firm focused on Indian education space, has set up an accelerator in Silicon Valley in the US to enable technology transfer and keep abreast of innovations in the sector.

"A lot of the education technology innovations are taking place in the USA and concept arbitrage opportunities exist in India," said Sandeep Aneja, founder and MD of Kaizen.

He said the PE firm, which has the backing of HDFC and World Bank arm IFC, will hire top technology and user interface (UI) experts in the US to advise its portfolio companies to keep ahead of technology change.

First from Kaizen Accelerator set up last week in Silicon Valley, California will be a company in the 'flipped classroom' space, a model that reverses traditional teaching method — delivering instruction online through video lectures and moving 'home work' into the classroom. Kaizen, which currently invests from a $98-million fund, expects to close this investment next month.

The trend of flip classrooms is gaining traction in the US through initiatives like Khan Academy.

"Future of learning will be video-based, and we have to ensure it is as effective as text. Best hardware software integration for videos is being doing in the US," said Aneja.

He said companies in US like Echo360 and Mediasite have been capturing lectures in universities for over a decade, and their expertise could be brought to the Indian market.

The accelerator has more such ideas on the cards, as technology is expected to have big impact on the education space.

Narayanan Ramaswamy, head of education at consultancy firm KPMG, said increasing smartphone and internet penetration will impact pedagogy and the way education is being conducted in the country.

"Technology will have an impact on education stronger than any other sector, and it will be on multiple levels and dimensions," he said.

But, according to Ramaswamy, while foreign players can bring in technology into India, "understanding the consumer, training employees is not something these companies can understand".

Kaizen plans to launch its second fund of $120-150 million later this year, of which majority will be invested in India besides other emerging Asian economies such as the Philippines, Sri Lanka, Bangladesh, Myanmar and Singapore.

The PE firm will also use the new office to help existing portfolio companies like online learning platform WizIQ, which gets half of its revenues from the US, to establish presence in the domestic market.

In the past, US-based players like 500 Startups, GSF, Y Combinator have been tapping local startups with acceleration programmes in the Silicon Valley. These ecosystems, with their top talent and early adopters, have been good breeding grounds for innovative products.

"Advantage of going to Silicon Valley is you get early traction from savvy customers," said Rajesh Sawhney, founder of GSF Accelerator, which helps Indian companies get exposure to programmes in Silicon Valley, New York, Toronto and Singapore. "Large global companies are interested in technology transfer and can commercialise products in different ways like joint ventures and channel partnerships. As India becomes large consumer of technology we will see more of that," he said.

Kaizen Accelerator could be unique and different from others as it also looks to develop and bring technologies to India besides taking its existing companies US markets.


Read more: articles.economictimes.indiatimes.com/2014-08-26/news/53243467_1_pe-firm-silicon-valley-education-space


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