Shantanu Prakash, the CEO of Educomp Solutions dreamed of starting an IT company when he was studying management at IIM, Ahmedabad — not a software coding company, but a technology-driven firm in an area where there was not much competition.
The result was a foray into the business of digitising school textbooks and designing course curriculum for students. “The current education system does not meet social expectations,” Prakash told Hindustan Times.
Incorporated in 1994, the company struggled in the first four years of its business. “We started out at a time when online was an unknown word and educating students through the Web or computer based training was unheard of,” he says.
Coupled with the fact that every company wanted to export software and not focus within the country, Educomp had an uphill task of educating prospective clients and its employees about the advantages of e-learning.
The turning point came in 1999-2000 when the Internet “dotcom” euphoria made international companies look at Indian IT companies and Educomp’s concept of looking at education as a business opportunity came to light. The business evolved as local schools embraced computerization while outsourcing the curriculum and courseware.
“Our business model is to work with schools to implement innovative learning systems that make education fun,” says Prakash. The company now has 3,000 employees and serves 36 lakh learners and educators in India, the United States and Singapore.
The markets have rewarded the company’s efforts and the stock is currently trading at Rs 3,960, a 300 per cent rise since January last year when the scrip was quoting at Rs 968. Educomp today has a market value of more than Rs. 6,500 crore. Prakash and associates control 56 per cent of the stakes.
Educomp recently tied up with IIT, Chennai to teach science. The company has a presence in China, Singapore and US where it has acquired an e-learning company.
Despite the growth, there are challenges that the company foresees in the future. Firstly, a lot of ‘me-too’ competitors have jumped in, and and existing big players like NIIT and Aptech are eating into the marketshare of the company.
“Iin India broadband users are only about 8 million and this is a cause of concern for the company since it is betting big on web-based courses that it can sell to schools,” says an analyst from a Mumbai-based brokerage house.