Ed-tech accelerator Edugild targets startups with a global road-map
One-year-old ed-tech accelerator Edugild believes in having a distinguished approach. In a country where most accelerators are either tech focused or generalistic, Edugild decided to be country's first ed-tech startup accelerator.
It does not work with test prep, e-learning, and tutorial startups â€“ areas that are typically associated with ed-tech, but is interested in skills aggregation, virtual reality and adaptive learning, among others, that can have a global reach.
"This market (test prep, e-learning, and tutorials) is a regional play and does not figure in the global scale ups," Rishi Kapal, chief executive, Edugild, told TechCircle. "We look for startups that already have roadmap for a next country, or can be sent to global markets in future."
India's online education industry is growing fast and it is expected to double to $40 billion by 2017, according to a survey by LoudCloud Systems, an e-learning research and development firm.
Ed-tech accelerators are a norm world over. In China, JMD Education Media's Future Works is the first seed round accelerator/angel fund to focus on ed-tech startups. In Israel, MindCET's accelerator program is aimed at helping entrepreneurs in the ed-tech field to accelerate and develop their initiatives.
"When people say unicorns are made around the world, the reason is that there are startup accelerators who help that space. In India, startups normally don't hunt for accelerators," said Kapal.
A Maharashtra Institute of Technology (MIT), Pune initiative, Edugild offers a 16-week mentorship and product realisation programme. The startups get access to co-working space, mentorship and guidance, pitching to venture capitalists (VCs), business management and customer acquisition, marketing and help in scaling up business. The accelerator also has an in-house design team who help these startups on user interface/user experience (UI/UX) related stuffs.
"The game changer of this accelerator is venture partner. We hunt for venture partners from the industry for each startup," Kapal said. The VC gets sweat equity in the startup he is supporting. "Our objective is to put sweat equity to the venture partner."
From its first batch, EduGild accelerated Gradopedia works with venture partner Manish Upadhyay, founder of Softbank-funded Liqvid, and Instafeez is venture partnered by Apurva Chamaria, global brand head of HCL. Venture partners of other two startups accelerated by EduGild in the first batch are undisclosed.
Startups have to give away 5% stake, of which Edugild retains 3.3% and the venture partner gets 1.7%. It also offers funding of Rs 15 lakhs in the initial round, if required by the startup. The capital infusion, however, comes in lieu of an equity dilution by the startup and is valuation based.
In its recently announced second batch, Edugild has selected seven startups, including Delhi-based Abroad Shiksha, US-based Edorble, Bangalore-based EKIN Knowledge and Russia-based ProctorEdu, among others.
Industry observers say it's very tough to create startups and invest in the Indian ed-tech market. "The only reason is that it is very difficult to create differentiation that one can defend for a long period of time. The barrier to entry is very low, and everybody sees the size of the market. The trouble starts when you get in and then you are unable to scale," Deepak Nataraj, managing director of Aarin Capital said. In the ed-tech space, Aarin has made several investments, including Byju's.
Design accelerator soon
MIT will also launch a design accelerator â€“ DesigngGild, in October 2016.
"A lot of products and services have a poor design," Kapal said. DesignGild aims to target startups whose products and services can become scalable and can be monetised by intervention in design. It will be a sector-agnostic and could be anything from a physical design of the product or the UI/UX (user interface/user experience) of apps or websites.
For the new accelerator, MIT will leverage its 11-year old MIT School of Design. Kapal claimed that several venture capital funds like SAIF Partners hire designers from this school to work on the design UI/UX aspect of their portfolio startups.
"We will put in $200,000 capex (capital expenditure) for creating infrastructure and resources around it," Kapal said.
A separate co-working space will be set up for DesignGild â€“ which expects to go live with first batch by December.
The whole ed-tech market is broken up in a horizontal plate around various stakeholders. The popular market today is gamification in learning and evaluation, personalised teaching, augmented reality/virtual reality (AR/VR) for school and college related learning and medical and engineering education (cutting edge is more about teaching as you go), and artificial intelligence (AI) that's able to mine students data and give them qualitative and timely feedback.
On the niche side, solutions for educational institutions such as student management, curriculum management, or hardware-software solutions to replace papers in exams are some of the examples.
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