After making his millions selling educational content across India, Educomp's Shantanu Prakash now wants to set up his own schools
For reasons that remain shrouded in mystery, in July 2005 the Carlyle Group, a global private equity firm, sold its 16 percent stake in the education services company, Educomp, back to founder Shantanu Prakash. Incredibly, Carlyle made the sale at a loss of roughly 94 percent on the $2.1 million (Rs. 1,087 lakh) it had paid to acquire the shares in June 2000. To make up for the shortfall Carlyle took all of the 9 percent shareholding that Educomp's had in one of its subsidiary companies, LearningMate, a business in which Carlyle was already the majority shareholder. Carlyle did so, says Prakash, because it saw greater potential in LearningMate which was focussed on offshore content delivery, rather than the domestically focused Educomp.
Entrepreneurs before Prakash who had tried to sell digital content to schools had run into a chicken-and-egg wall. Most schools didn’t have the hardware (computer servers, networks, flat screen televisions) to play content, nor did they want to invest in setting it up first without having quality content at hand.
Correction: This article has been updated with corrections.
(This story appears in the 04 December, 2009 issue of Forbes India. To visit our Archives, click here.)