As online coaching gathers pace, PE firms line up for admission

Coaching classes for competitive exams cost a bomb as parents of any teenager preparing for IIT entrance exam or a medical or management programme will testify.

A two-year preparatory course for engineering entrance exams costs nothing less than ₹6 lakh in locations such as Kota (Rajasthan) or Delhi. This is often a gamble for many middle-class families.

They now have a cheaper option. The coaching market, estimated to be worth $5 billion, is now turning ‘virtual’ as these services move online.

The virtual class is 50 per cent cheaper than the class room.

A number of students now prefer online portals such as Toppr.com, embibe.com, studycopter.com, tutorvista.com, edutor and teacherni.com for these services.

Venture capital firms and private investors have been quick to recognise this trend and are investing in these virtual classes.

Recently, Lightbox Ventures II invested close to ₹30 crore in Mumbai-based Embibe, while another portal, Toppr, has received ₹12 crore from SAIF Partners and Helion Ventures.

Delhi-based Studycopter has secured funding from the Indian Angel Network. Microsoft Ventures has received proposals for 4-5 such start-ups. Sandeep Murthy, Founder, Lightbox Ventures, said that online portals are cost-effective and less time consuming compared to physical coaching centres such as Bansal’s, RAO Tutorials, and the BSE-listed Career Point.

These portals are available even on mobiles allowing students to bone up even when they are on the go.

“The IIT-JEE exams are getting tougher and with so many students in one class it becomes difficult for teachers to focus on individual students.

“These portals are a kind of personal tutor,” added Murthy, who believes that the online test-prep market will be worth $8 billion next year.

Every year about 1.4 million students take these competitive entrance examinations.

Mukund Mohan, Director, Microsoft Ventures, said that students from rural areas will now be able to access the same resources that are available to students belonging to urban and metro areas.