Portfolio companies

  • Omega Schools
  • Avanti
  • APEC Schools
  • SPARK Schools
  • Zaya
  • Experifun
  • Sudiksha
  • Lekki
  • Karadi Path
  • Overview

Omega Schools

Founded by: Ken Donkoh and James Tooley in 2008

Location: Accra, Ghana

Network of private schools that offer an affordable education through an innovative “pay-as-you-learn” model — with specialized curriculum, technology and management modules.

Revenue Growth Rate:¹ -3.8%²

Number of students this year: 14,000


  • Developed an android based app, in-house, that allows central office to push lesson plans to teacher owned mobile phones. This allows for real time updates to curriculum and LPS, and greatly decreases huge operational hurdles in distributing materials and lesson plans.
  • Students at Ofaakor Middle school had a 100% pass rate in all major subjects on their 2015 BECE exams.

What’s to come in 2016

  • Omega Schools will implement a new teacher observation digital platform, begin a dedicated literacy block, and begin measuring academic progress against national tests at grades three and six (in addition to currently measuring at eighth grade).


¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.
² 18% growth rate in local currency, negative rate due to significant depreciation of Ghana Cedi against US dollar.


Founded by: Akshay Saxena & Krishna Ramkumar in 2010¹

Location: Mumbai, India

Test prep company that supports low-income high-school students with college entrance exams, focusing on science and mathematics.

Revenue growth rate:² 262%

Number of students this year: 2,000


  • Students at Avanti centres outperform those in traditional, high-end classroom coaching programs by 20%.³
  • 80% of students show an annual performance improvement of more than 20%.⁴
  • 40% of Avanti’s students are placed in the top 10% in college entrance exams.

What’s to come in 2016

  • Avanti will expand to 30 locations in 11 states across India and serve 6,000 students. 80% of these locations are small towns where the traditional coaching market does not reach.
  • Avanti will begin to track classroom learning outcomes at the individual student level by launching the tablet-based platform for all classroom exercises and assignments.


¹ Founded as a non-profit.
² Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.
³ Measured by comparing performance against a control group on a baseline test conducted in the first month of the program and the national entrance exams conducted at the end of two years.
⁴ Measured by comparing performance of students on Avanti's standardized major tests.

APEC Schools

Founded by: Beth Lui, Fred Ayala and James Centenera in 2013

Location: Manila, Philippines

Chain of affordable secondary schools that uses an innovative curriculum and immersive English-language environment to help students build life skills and become more employable.

Revenue Growth Rate:¹ 195%

Number of students this year: 3,300


  • Over 70% of students met or exceeded grade expectations in science, English, and social sciences.
  • APEC teachers received a 100% pass rate on the Licensure Examination Test (LET) for teachers, compared to the national average pass rate of below 50%.

What’s to come in 2016

  • APEC will open senior high schools for the first time for thousands of new students, utilizing a mastery-based approach that includes technology-powered learning labs and a project-based curriculum.


¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.

SPARK Schools

Founded by: Stacey Brewer and Ryan Harrison in 2013

Location: Johannesburg, South Africa

Network of primary schools that use a blended learning model with adaptive technology and personalized learning, combined with high-quality teachers.

Revenue growth rate:¹ 149%

Number of students this year: 1,600


  • Over 90% of students are on track to make one and a half years growth in maths, and approximately 55% of student are on track to make one and a half years growth in literacy, as measured by international standards.
  • SPARK recently began piloting a “flexible schedule model” with their fourth grade students that enables them to follow one of 16 ability-based schedules throughout the day, determined by their personal needs and preferences.

What’s to come in 2016

  • Spark will open four new schools, doubling their footprint, and opening their first school outside of Johannesburg.
  • They also continue to expand their cutting edge “flexible schedule” learning model to older students in grade four onwards.

¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.


Founded by: Neil D'Souza in 2012¹

Location: Mumbai, India

Product and services company that provides schools with a connected technology platform, teacher training and engaging content to make learning more personalized.

Revenue growth rate:² 60%

Number of students this year: 12,000


  • Zaya students in a control/intervention pilot in Mumbai outperformed their non-Zaya peers by 24% in English and 14% in math (2014-2015 school year).³
  • A group of sixth graders supported by a Zaya teaching assistant in Mumbai increased their scores on the standardized test, ASER, by an average of 1.4 points in English and 1.1 points in math.⁴
What's to come in 2016
  • Mobile and web-based app for Zaya’s learning platform.
  • English language program for K-5 powered by an adaptive engine.
¹ Founded as non-profit.
² Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.
³ Control/Intervention: In an APS in Mumbai, we administered the same exams (English and math) three times across all students in grades three, four and five. However, only one section used the Zaya program on a regular basis. When we compared scores, Zaya students outperformed their peers by the percentages given.
⁴ The second example is from a program in a school in a Mumbai slum. The students began a foundation course (basic math and English) in January and continued through March. The ASER literacy and numeracy assessments were given at the beginning and end of the program, and students increased their scores by these figures (on a scale of 0-4).


Founded by: Rakesh Kumar, Vivek Pandey in 2013
Location: Bangalore, India

Low-cost, interactive classroom kits to make science and technology more fun and engaging.

Revenue Growth Rate:¹ 221%

Number of students this year: 20,000+ students in Experifun-served schools.


  • In a 2015 survey, 95% of teachers surveyed reported using the Experifun’s “inClass” kits to supplement their instruction.
  • 80% of teachers who use the product reported being happy using it in the classroom; many observing that students pay more attention in science class when the kits are being used.

What’s to come in 2016

  • Next school year, Experifun plans to conduct third-party assessments in schools to measure the impact of the “inClass” kits on learner interest in science and understanding of core science concepts while expanding their product portfolio further.
¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.


Founded by: Naveen Kumar in 2011
Location: Hyderabad, India

Network of low-fee preschools across India, which help nurtures curiosity and builds confidence in young children.

Revenue Growth Rate:¹ 55.9%

Number of students this year: 800


  • Internal assessments show 82% of upper-kindergarten students achieved an “Outstanding” grade across language, numerical, and social skills. As students spend more time in Sudiksha schools, average class performance increases linearly (i.e, average performance increases from nursery to lower-kindergarten to upper-kindergarten).

What’s to come in 2016

  • Next school year, Sudiksha plans to conduct more robust external assessments of student performance within their schools and will evaluate whether Sudiksha graduates perform better than other students when starting formal schooling. They will also expand their centers and franchises into new cities.
¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.


Founded by: Bunmi Oyinsan in 2014
Location: Lagos, Nigeria

Chain of private schools that provides quality education at an affordable price for students from low income families across Nigeria.

Revenue Growth Rate:¹ N/A (first year in operation)

Number of students this year: 130


  • Tests conducted at the end of the first term (in December) showed an average of 70% improvement in numeracy and literacy compared to tests given in September at the beginning of Lekki’s first term.

What’s to come in 2016

  • Lekki Peninsula are expecting to double enrollment in 2016 and are looking to grow their physical space in order to meet demand from the community, while looking for an additional site to serve another area of Lagos. Lekki is also exploring the introduction of computer literacy courses for children age seven and up.
¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.

Karadi Path

Founded by: CP Viswanath and Shobha Viswanath in 2011
Location: Chennai, India

Education company that provides schools with a proprietary curriculum including multi-media materials and training, designed to accelerate the acquisition of English-language skills.

Revenue growth rate:¹ 145%

Number of students this year: 200,000


  • Karadi Path classes were found to be significantly more productive than traditional English classes in improving listening, reading, and speaking. An impact assessment covering over 800 students showed that Karadi Path users demonstrated twice as much improvement than non-users with just 20% extra instructional time.

What’s to come in 2016

  • A study of more than 800 students in Karadi Path schools found those going through their program outperformed students in ‘traditional’ classrooms by more than 60% in tests of English reading, comprehension and speaking.
¹ Based on the most recent fiscal year within each country, and for those fiscal years that end in February or March 2016, this is an estimate based on the most recent quarterly forecast.

The Tide is Turning in the Education World

Pearson Affordable Learning Fund Annual Letter 2015


Annual Letter 2015

Five years ago, after working in strategy consulting for several years, I felt the need to get my hands dirty; I wanted to drive tangible change in the real world and never imagined where that would take me. I had been advising on strategy and transformation at some of the largest finance and technology clients and saw a project on the pipeline to work with the government in Pakistan help reform its education system. The firm’s partner on the assignment wasn’t an average leader, but a British knight who had dedicated many years to developing an innovative and effective method of government reform. Sign me up!

Pakistan was the first time I was confronted by the abysmal state of education that millions of children and parents face around the world. I remember conducting my first site visit around Lahore. I exited our heavily armored vehicle and walked down a dusty path to a shabby school, where a group of children sitting on the ground outside, smoke churning from a brick kiln nearby. Someone had alerted the teacher that we were coming, and she had quickly assembled the students and thrown dirty books into their hands. The books had tiny English text, and as the students flipped through the pages, unable to read, it was clear that no one was learning much.

The partner on the Pakistan project, Sir Michael Barber, and I joined Pearson shortly after and conceptualized a way for the world’s largest education company to play a leading role in fueling innovation across the developing world—and therefore better learning outcomes.

We knew by then that large swaths of parents and students in the developing world have a tremendous demand for high-quality education and would choose to invest their scarce dollars in learning opportunities to provide for a better future for their families.

It was clear everywhere we went—from Pakistan to Ghana to the Philippines—parents, students, and heads of state saw education and skill development as a critical gateway to a more prosperous life and a stronger economy. What was lacking was organization, knowledge and capital. How could these parents and students get access to high-quality options? What financing already existed to support entrepreneurs with solutions? Who measured learning outcomes and quality, and how did they do it? Could we make business models viable for investment?

Given this demand, we believed we were uniquely placed to combine the knowledge of which learning models worked with the investment needed to succeed. 

Pearson’s leadership agreed with our analysis, and in 2012 took up our recommendation to create a global investment fund. The Pearson Affordable Learning Fund (PALF) would have a laser focus on education companies in the developing world demonstrating high learning gains for low cost.

We would make financial returns by investing in local entrepreneurs who built for the long term. We set out to be the first global education fund of our kind.

The last four years I have been on a learning rocketship. Although the mandate was clear, how to get there was not. All the data and intuition told us we were onto a big, global phenomenon. But we had to find out if it was real. And if it was, how to capture it.  At Pearson, we have developed a sophisticated method for measuring learning outcomes—what we call “efficacy”—which we apply rigorously to every investment we make.

We launched PALF in May 2012 with our first investment in Omega Schools, with the vision that affordable fees and a focus on quality and scale would drive a successful group of schools and ultimately a successful business. Since then we have invested in 10 companies, spanning five countries, and allocated our first fund of 15 million dollars. Building on our success, we plan to invest a further 50 million dollars through PALF in the next few years. Our portfolio companies are on an upward trajectory toward growth, profitability and better learning outcomes. For instance:

  • Avanti, which provides test preparation for students in India, helped one of their students, Ayush Sharma, get a full scholarship to MIT.
  • At SPARK Schools in South Africa, students on average learn one and a half years of curriculum in one year of study.
  • Students in India who are in classrooms with Zaya’s content and technology perform 24% better in English and 14% better in math.

Working with the very best local entrepreneurs is what makes PALF possible—education leaders who understand the unique needs of their students and their markets. We’re proud that half of our capital is invested with female founders, in a world where many startups in both the developed and developing worlds are still overwhelmingly male.

We know that to be truly revolutionary we will need to scale up the innovation our entrepreneurs are fostering. We will need to demonstrate to governments that these innovations can help them answer the most important question in education: how can we ensure that every child has access to a high quality of education. And then develop the strong, transparent, standards for learning across all schools—public or private.

We are not yet declaring victory—far from it. We’ve had setbacks, big and small. Some parents have been understandably wary of an innovative curriculum that’s not familiar to them, schools have had bomb threats and summer interns have contracted bed bugs and sand fleas. Despite many challenges, the dedication from the local leaders of our portfolio companies has been incredible. Every time we visit the education institutions they run and support, we are reminded of the large, tangible impact that we are helping them make on students’ lives.

The world has begun to take notice of our work. We’ve found great supporters—DFID has launched a study into low cost private education, the Economist ran a cover story on the market, and large impact investors like Omidyar Network and the Michael and Susan Dell Foundation have begun to co-invest with us. Harvard Business School has even published a case study on PALF.

But as with any great endeavor, there have been critics as well, who would like to see any investment dedicated to directly improving the public sector. Like them, we believe that every child should have access to higher quality education, but we are certain that the private sector has a vital role to play in making this a reality. The Punjab education secretary once told me about the death threats he received for implementing bold reform - when I expressed dismay and support for his courage, he assured me with a grin that threats on his life were a measure of success. The status quo never goes down without a fight.

Everything we have learned and seen has refined and emboldened our approach. Pearson, the world’s leading learning company, deeply believes in and shares our mission (Thank you, John). We are building a top team with the skills and ambition to find new ventures and manage our growing portfolio, and we’ve found a coalition of organizations who are as excited as we are at the prospect of investing to improve learning outcomes.

Governments, too, express interest in our work—they know that innovation and collaboration will be vital to their ultimate success. We have fueled the fire for entrepreneurs and investors to believe they can be successful in tackling the education crisis. And, most importantly, despite the uncertain times we live in, parents and students everywhere desperately deserve and are demanding a better education. Meeting their demand is why we do what we do.

I hope that our letter shares a few of the insights we’ve gained and the progress our portfolio companies have made, while also providing inspiration to the next generation of entrepreneurs.

When we formed PALF, we hoped to spark ambition and excitement in every corner of the globe at the prospect of shaking up education for the better. Having travelled thousands of miles, and met hundreds of fellow travellers, I am more optimistic than ever that we’re making progress on the journey to universal high-quality education that helps all young people to flourish.

Katelyn Donnelly
Managing Director
Pearson Affordable Learning Fund

A note from John Fallon

CEO at Pearson

As the world's learning company, Pearson has both a responsibility and an opportunity to ensure that we help as many people as possible access quality education that will help them progress to a better job and a better life.

Our employees are motivated by improving outcomes for students across the world. In fast-developing economies, we see huge potential to improve learning through innovation. Students in the overwhelming majority of the public schools in Brazil which use our learning systems outperform the national average. In India, we’ve just launched a distance learning partnership with Cornell University to help Indian professionals accelerate their careers.

The Pearson Affordable Learning Fund (PALF) gives us the chance to reach places in the world our traditional business cannot. Through the fund, we are helping local entrepreneurs across Asia, Africa and Latin America to go further and faster in improving education in their local communities. From Ghana to India, our team has found brave innovators, exploring how new teaching and learning approaches can serve their communities.

Where governments are sometimes unable to take on risks, entrepreneurs and startups can focus on the most difficult challenges in education—job readiness, early childhood education or teacher training—and make a big difference in a short space of time, from which the public sector can eventually benefit.

By getting behind the best of those entrepreneurs, investing and offering our expertise, PALF is not only helping those who benefit directly from better teaching—we hope to stimulate thriving communities of educational disruptors—but also teachers and businesspeople who relish the opportunity of taking on the trickiest problems in education and helping to solve them.

Under the leadership of Katelyn Donnelly, PALF has broken much new ground since we founded it three years ago. Katelyn’s letter highlights all that we have achieved over the past 12 months. I’d like to thank the amazing, creative, tireless entrepreneurs who are our partners, and our small but fiercely dedicated PALF team. But most of all, I’d like to pay tribute to our students - they are the reason we work so hard, and it continues to be a privilege to work with them to address the ever more surmountable challenge of global education.

The late Professor C.K. Prahalad, a Pearson author and board member, said: “The big challenge for humanity is to get everybody, not just the elite, to participate in globalisation and avail its benefits.” The work of the Pearson Affordable Learning Fund is heavily influenced by that belief in inclusion, and in allowing everyone, not just those at the top of the pyramid, to have a chance.

John Fallon
CEO, Pearson



A message from Sir Michael Barber

Pearson Affordable Learning Fund co-founder and chief education officer at Pearson


Rethinking how we develop and utilize great teachers

Here are three startups leading the way

Good teaching matters. Teacher quality is widely regarded as the school-related factor that has the biggest impact on student achievement, far more than books, facilities or curriculum.¹ Nations with the highest performing school systems such as Singapore and Finland understand this, and they implement policies and invest resources strategically to make sure that they “get the right people teaching” and that once teaching, those people are developed “into effective instructors”.² However, for many developing countries hoping to improve their education systems, this is easier said than done.

Teacher quality is widely regarded as the school-related factor that has the biggest impact on student achievement, far more than books, facilities or curriculum.

First, there is already an enormous shortage of quality teachers globally, which is especially critical in emerging markets. This shortage is likely to grow more pronounced due to a demographic bulge and surging enrollment,³ ushering millions more students into the education system each year. Second, even in countries with higher numbers of certified teachers, the rigor of the training programs needs improvement. The South African department of education, for instance, reports that while 90% of its teachers are technically “qualified”, both their teachers and their students score significantly lower on respective international content specific exams than do neighboring countries.⁴ Finally, teachers often make up 65% of school systems’ annual spend,⁵ and many countries simply don’t have the resources, or the political will, to invest in teacher training the same way wealthier nations do.

Therefore we are faced with two questions:

  • Which innovations can help give all students access to high-quality instruction and teachers?
  • Can these solutions be implemented to support teachers at a low-cost and large scale?

PALF has invested in some exceptional entrepreneurs that are tackling these questions head-on. They are passionate about finding creative ways to do more with less, understand that there is rarely a single “correct” answer, and know that breakthroughs don’t come from following the status quo.

Here are two approaches our companies are experimenting with that we are especially excited about.

Utilize teacher time more intelligently


At SPARK, a school chain in South Africa, a highly trained teacher is in charge of whole group and guided practice portions of the typical learning cycle. The independent practice portion is then done primarily with the aid of “e-learning labs,” where students work to reinforce and extend classroom instruction with personalized computer programs while overseen by a more junior assistant. This allows the extremely valuable time of the master teacher to be dedicated to the more complex tasks of implementing best-in-class instructional methods and classroom management. As a result, the cost of delivering high-quality education is substantially lower without sacrificing quality.

SPARK continues to produce impressive quantitative academic gains. In 2015, 85% of students made one and a half years growth in maths, and about 60% of student are on track to make one and a half years growth in literacy, as measured by international standards.

Teachers as facilitators and mentors


Avanti, which runs after-school centers to prepare students in India for university entrance exams, uses facilitators, combined with peer-learning teaching and online content delivery, in a flipped classroom. They work with mature students, who are highly motivated and able to complete pre-work and watch lecture videos independently. This frees up classroom time for group practice. In this model, the teacher facilitates the student driven sessions, helps individual students who might struggle with a concept, and keeps the class motivated and on schedule. This has had an outstanding effect on science and math learning: this year 40% of Avanti’s 2,000 students were placed in the top 10% of the IIT university entrance exam in India.

Within reach: making it from Avanti to MIT

Avanti alumnus and MIT undergraduate student Ayush Sharma talks about his experience. 

Read more

I never imagined I would get to study at MIT. I had always wanted to go to a prestigious university, but I just didn’t see how it would ever be possible for me to get to one.

My mother recently retired after two decades as a para-military constable, and my father is a mechanic in our hometown of Kanpur, Uttar Pradesh; neither of my parents went to university, so it would have been understandable if they had pushed me down a more conventional path of college prep with one of the established local courses. I’m so grateful that they supported me in choosing Avanti instead.

At Avanti, being able to study with my peers was a much more attractive option than learning by rote. It was the learning outside the classroom, however, that really opened up possibilities for me. It started with the foreign applications program manager.

Through him, we heard about the various summer programs across top US universities—I got both encouragement and advice on putting myself forward for the Yale Young Global Scholars program. I was selected for Yale’s program and I think that was when I really began to understand what I would need to do to apply to US colleges for my undergraduate studies. It was a fantastic experience, and I returned to India believing that MIT really could be within reach. It was not easy, especially improving my English and navigating the complex US application process, but Avanti had a personal mentor throughout our college applications, that supported me.

The first semester at MIT has been a whirlwind of projects, problem sets, and amazing new people. I hope that this is just the start for me, but for now, I am so proud to say that I am now an engineering student at one of the best universities in the world.

Ayush Sharma,
MIT undergrad and Avanti alumnus


Of course there is no “silver bullet” and each of these models have shortcomings, despite promising initial results. We know that not every attempt will be successful. That’s why PALF invests in multiple models and backs entrepreneurs that take a data-driven approach and remain flexible enough to adapt to the realities on the ground. In the coming years, we aim to help millions of students get access to quality teaching by rethinking how we select, prepare, and support teachers—the people who can make the biggest difference in a student’s life.  

¹ http://www.epi.org/publication/books_teacher_quality_execsum_intro/#ExecSum
² http://mckinseyonsociety.com/downloads/reports/Education/Worlds_School_Systems_Final.pdf
³ http://www.uis.unesco.org/Education/Pages/global-teacher-shortage.aspx
⁴ http://www.education.gov.za/LinkClick.aspx?fileticket=jG5BCzd2IMk%3D&tabid=743&mid=3045
⁵ http://www.education.gov.za/LinkClick.aspx?fileticket=jG5BCzd2IMk%3D&tabid=743&mid=3045

Serving Up The Right Ingredients For A Best-in-class School


“Don’t reinvent the wheel.” While the maxim is often quoted, it’s not often followed, especially within the world of education.

Many schools across the developing world are faced with a big challenge. They aspire to deliver a high quality education, but have limited resources—budgets that are predominantly earmarked for teacher salaries leave little for improving the curriculum, supporting teaching training or sourcing the most effective products for students, technology or otherwise. More specifically, for affordable private schools, tight operating margins make it difficult for individual “mom-and-pop” operators to invest in things that go beyond simply running the school—such as improving teaching practices.

This reality means that education systems in emerging markets continue to use decades-old teaching methods and materials, despite knowing that there are significant opportunities to learn from successful schools around the world. Fresh ideas in pedagogy, technology and school models, which have a proven track record of success, have great potential to improve learning outcomes; yet their influence has been limited to date.

What if an education company could step in and provide struggling schools with a best-in-class suite of solutions—from content to training to technology infrastructure? This would enable school leaders to focus less on "reinventing the wheel" and more on running an organization that has an empowered workforce, engaged students and ultimately delivers quality outcomes.

More and more innovative “service providers”—as illustrated above—are starting to pop up and provide enormous value for schools across the developing world, helping them to narrow in on specific tools that lead to the best outcomes and to implement them in a consistent way. For example, Zaya in Mumbai, India, has developed LabKits consisting of hardware, software, and teacher support services that turn a typical classroom into a dynamic blended learning experience.

This holistic approach to blended learning represents a widely accessible and affordable way for teachers to bring world-class content and pedagogy into their classrooms. Zaya’s solution has helped students significantly: Zaya students in a control/intervention pilot in Mumbai outperformed their non-Zaya peers by 24% in English and 14% in Math in 2014.

Zaya is far from the only example of a specialist partner helping schools implement best practices in emerging markets. In language learning, observing how children learn to communicate in their mother tongue illustrates the importance of a multi-sensory approach, with kids learning vocabulary through context, usually in a playful environment that emphasizes repetition and practice. The Pearson Affordable Learning Fund’s most recent investment, Karadi Path, has adopted these lessons in their proprietary English-language learning programs deployed across India. Instead of traditional vocabulary lists and linear lesson plans, the Karadi Path program brings students into an immersive environment through the use of interlinked songs, stories and videos alongside activities that encourage peer-to-peer learning and lots of communication.

In science, Experifun is working to replace traditional rote learning focused on test preparation, with activity-based learning that builds a deeper conceptual understanding for future engineers and computer scientists. Because designing effective student-led learning projects can be complex for schools, Experifun has created reusable, sequenced science kits that are affordable for schools and give students an active role in their own learnings.

Zaya students in a control/intervention pilot in Mumbai outperformed their non-Zaya peers by 24% in English and 14% in Math in 2014

While these providers can be more cost-effective in bringing quality to classrooms, there are significant challenges to creating sales models that scale successfully. Purchasing decisions of individual schools can be capricious, and the decision-making process within public school systems can be a labyrinth to navigate. This makes acquiring customers more costly, which is why many prospective entrepreneurs and investors hesitate to venture into ‘school sales’ models.

What this analysis misses is the other side of the equation - the revenue that schools can bring their providers. Teachers are often loyal to solutions that enable them to more effectively reach students, and this translates into recurring revenue, year after year. While there’s a high cost of customer acquisition, this is more than offset by this potentially high customer lifetime value. We see reflections of this in our portfolio—across India, Zaya currently reaches over 12,000 students, while Karadi Path is being used in 1,200 schools reaching 200,000 students. Karadi Path retention rates have been over 80% and many of their pilot programs have been expanded within schools and districts, paving a path to continued scale.

Finding, understanding, and implementing great educational practices costs time and money. Instead of schools individually reinventing the wheel, specialists can make enough wheels for everyone. By understanding how best to replicate educational innovations in different settings, service providers are well-positioned to be the agents of change for education in emerging markets in the coming years.

Karadi Path retention rates have been over 80% and pilot programs have been followed by expanded implementation within schools and districts, paving a path to continued scale.

Preparing today’s students for tomorrow’s workplace

Across the world, formal education provides an opportunity to move forward, both for individuals and for the greater society. It’s essential that education companies find ways to measure that progress. One of the most compelling benchmarks of success is whether a student is able to find gainful employment after graduation—especially in a world where 65% of 12-year-olds will go on to do jobs that don’t exist today.¹

Partnering with education entrepreneurs who are addressing this need, we’ve gained valuable perspective on preparing students for the workplace. Here are three insights we believe are critical to the future of this space:

  1. High unemployment cannot be resolved without education that focuses on employment skills

Unemployment continues to be a major issue across the world as employers struggle to fill jobs with sufficiently skilled labor, and this problem is even more urgent in emerging markets in Asia and Africa where the labor force is growing exponentially. At the same time, university attainment rates on the African continent, for instance, continue to be the lowest in the world. And approximately 40% of employers say they struggle to fill job vacancies with skilled workers,² a challenge that is likely to get tougher as the global economy transforms under the pressures of increased workplace automation.

40% of employers say they struggle to fill job vacancies with skilled workers

2. Current approaches to job readiness are inadequate

At a global scale, young people are three times more likely to be unemployed than their parents.³ In emerging markets, the problem is even more apparent. 93% of the college-aged population in African countries are not in college, leaving most searching for informal employment or vocational training programs.⁴ Africa is not alone—across emerging markets, the current educational infrastructure struggles to find ways to engage young people on a path to productive employment.

Vocational education is often looked to as the answer—for example, India declared a National Skill Development Policy (NSDP) in 2007 to support an overarching goal of skilling 500 million people by year 2022. This was followed by an announcement in 2013 allocating $150 million in the Indian budget to a skill development scheme that would offer an incentive to every individual undergoing vocational training.

Although spending in the vocational space is significant and growing, the current state of this kind of education is often antiquated and not well suited to the 21st century economy. Too often, vocational education companies resemble manpower supply chain businesses, focused on finding students for courses and placing them in low-wage jobs with little attention to their preparation. Vocational education companies advertise high placement rates for their students, but a deeper exploration often reveals problems. What companies don’t advertise is that many students leave jobs within the first few months after finding themselves unprepared, or are pushed out by employers who will take a chance on a fresh batch of placements. In fact, job attrition rates for newly placed graduates can be greater than 40% within the first six months. In this environment, if we continue to spend money on these traditional approaches without exploring more innovative alternatives, we will never be able to fully unlock the potential of these young people in the workplace.

3. The lines separating secondary, higher, and vocational education are blurring

Traditionally, we’ve often thought of secondary, higher and vocational education as distinct fields with unique purposes, but it’s now time for a little more flexibility and cross-pollination between them. In many emerging markets, the way out of poverty is through higher-skilled jobs. In the Philippines, with its large service and business process outsourcing (BPO) sectors, this means a thorough basic education, professional skills and English fluency.

In emerging markets, the problem is even more apparent. 93% of the college-aged population in African countries are not in college.

Sadly, many schools in the country do not do enough to prepare students for college or employment. Our portfolio company, APEC Schools, based in Manila, seeks to address this by building English language skills. More than half of APEC’s students come from families who earn less than $550 per month. For about $50 a month, which places APEC in the cheapest quartile of private schools, students are taught in an English immersive environment. Students learn a core academic curriculum and also the skills to succeed professionally—including critical thinking and character education.

APEC doesn’t ignore the national context, serving only as a stepping stone to higher education—they recognize that many of their students will graduate from APEC high schools directly to employment and want to prepare them to be successful there. It’s a model worthy of examination—university and secondary education providers can afford to take a more rigorous look at their role in preparing students for the workplace.

The core critical thinking, leadership and language skills fundamental to the job market are largely missing from much of today’s K-12 and tertiary system in most developing countries. We believe secondary and tertiary providers will increasingly look for partnerships with businesses and development agencies that more directly prepare their students for the 21st century workforce. Universities that help students learn practical skills, perhaps through on-the-job projects in partnership with local businesses, will be best able to take advantage of the demographic trends in play.

We are optimistic that entrepreneurs will play a fundamental part in turning the tide, and we are ready to support them in doing so.

Building an ecosystem for education entrepreneurs


Starting a company is like throwing yourself off the cliff and assembling an airplane on the way down.

Reid Hoffman’s widespread analogy of starting and building Linkedin.

Over the past three years, all of us on the Pearson Affordable Learning Fund team have directly felt this harsh reality, expressed above by Linkedin’s founder, in the geographies where our entrepreneurs are hard at work. Setting up a business is difficult in any location, but in emerging economies the challenges are more pronounced, making the entire endeavor even more daunting. Resources, such as seed and growth capital, are often scarce, and there are fewer networks in which to engage with fellow entrepreneurs and seek mentorship. This means that while traditional entrepreneurship continues to emerge out of necessity to solve problems, creating high-impact, scalable businesses can be a real challenge. And taking on that kind of risk, which is often lauded in the developed world due to increased safety nets, is viewed with much more skepticism.

When a founder “jumps off the cliff” in some of these markets, they are essentially operating without a parachute until they get validation and traction from many users and/or solid sales figures—and this is especially tough for education startups for whom validating concepts requires a much longer lead time. These founders need support networks of education stakeholders to discuss big strategic topics like their strengths and failures, as well as more operational challenges that can be a barrier to entry, such as hiring the right talent, marketing, customer acquisition and teacher training. Additionally, programs to support the founders, such as PALF’s fellowship program, provide companies with much needed talent and extra resources.

At PALF, we set out to find not only the best entrepreneurs, but also those who have the greatest potential to significantly impact their education systems. We then work to bridge some of the gaps with education expertise, measuring and improving efficacy and operational support to help the companies scale, grow and reach more learners in a meaningful way. At the same time, there also needs to be a thriving education sector so that future entrepreneurs have the right environment to build and expand their companies and connect to peers and investors. We are helping that process along by creating ecosystems where they don’t already exist, and strengthening them where they are beginning to emerge.

Here are just a few of the ways we’re building and nurturing education ecosystems:

  • We began our efforts in India in 2013 with Edupreneurs, our first incubator program for earlier-stage companies in partnership with Village Capital. For three months, we worked with fourteen high potential education entrepreneurs to build their businesses and make them more likely to attract and retain investment.
  • We replicated Edupreneurs in Southern Africa in 2014, bringing together a diverse cohort of education businesses, investors and school leaders from the community. We hosted 13 companies from five different countries across sub-Saharan Africa, six of whom boast female founders. Seven different education sub-sectors were represented, and we saw that this diversity greatly contributed to the strong collaborative dynamic between companies throughout the program.
  • In September 2015, we hosted an education summit in Colombia in partnership with the Omidyar Network, bringing together carefully-selected entrepreneurs, investors and mentors from Spanish-speaking Latin America. This Summit also featured a diverse group representing companies from five countries, and six education sub-sectors ranging from early childhood to education technology to vocational training.
Latin America Education Summit Participants. Bogota, Colombia, September 2015

We’ve been thoroughly impressed by the quality of companies in these markets and the passion and knowledge they bring to their work. One entrepreneur expressed their appreciation for the Southern Africa Edupreneurs program: “... Love how it built camaraderie and we really feel like a part of a Pan-African community of edupreneurs now. So many potential partners and new friends. We want to do whatever we can to help everyone in the cohort succeed!”

Peer learning and mentorship during the Edupreneurs workshop in Johannesburg, South Africa in 2014

As we learn and adapt to the local context appropriate for each region, our efforts have only reinforced our belief in the power of building and strengthening entrepreneurial networks. As our MD Katelyn Donnelly puts it, “within these micro-communities and micro-geographies, people will eventually be able to learn from other larger communities and together we’ll create a more global ecosystem of entrepreneurs and innovators that are learning from each other.” Our approach continues to evolve, but one thing is certain: this work is critical to supporting the growth of ecosystems and we are committed to doing our part. In 2016, we are collaborating with Omidyar Network and running programs in Southeast Asia, Brazil, India and Africa. To all our potential future partners: we look forward to working together to create environments where talented entrepreneurs have the tools and support for a safe landing when they ‘jump off the cliff’.

Within these micro-communities and micro-geographies, people will eventually be able to learn from other larger communities and together we’ll create a more global ecosystem of entrepreneurs and innovators that are learning from each other.