Kaizen Raises $43.8 Mn For Fund II; Invests in Hyderabad Based INSOFE

Private equity firm Kaizen Management Advisors Pvt. Ltd has attained the first close of its second fund – Kaizen Private Equity II – at $43 Mn (INR 285 Cr) with five investors, including Strategic Investors, Pension funds, Family offices.

The firm is aiming to raise $125 Mn for its second fund with a ticket-size in the range of $5Mn-$8 Mn. As per an official spokesperson, the PE firm is expecting to attain final close by March 2018.

The new fund will expand Kaizen’s focus from India to Southeast Asian countries. Apart from India, the fund will focus primarily on Sri Lanka and the Philippines, and further reach out to countries like Vietnam, Bangladesh, Myanmar, and Thailand.

With this fund close, Kaizen has also invested an undisclosed amount in Hyderabad-based INSOFE (International School of Engineering), a professional skills training firm.

INSOFE was launched in 2011 with an aim to transform the applied engineering education space in India. They currently focus on areas such as big data analytics/data science. INSOFE also does high-end consulting globally for product, consulting and services companies in various domains, helping big data analytics companies build Centres of Excellence.

Talking about the funding, ‎founder & President of INSOFE, Dakshinamurthy V. Kolluru said, “This synergy adds immense value and brings in the needed direction and capital for global expansion. The expansion plans involve setting up a research environment on par with global leaders, on-boarding world-class faculty to join the INSOFE team and also ensuring excellence in applied engineering education for our students with world-class standards. We are also launching a full-time programme soon and the expansion plans include cities both in India and abroad.”

Mumbai-headquartered Kaizen is a private equity firm that invests in businesses that transform human capital. The team focusses on education and technology and represents an effective combination of investing and operating experience. Its first fund had a corpus of $70 Mn and made 10 investments. The firm has partially exited from two of its investments, with an IRR (Internal rate of return) of 21% to 23%.

Prior to this in May 2016, Kaizen acquired a majority stake in Mumbai-based Neev Knowledge Management Pvt. Ltd, a company that offers online and classroom-based finance courses under the brand name EduPristine for an undisclosed amount.

The education sector in India is poised to witness major growth in the years to come, as India will have the world’s largest tertiary-age population and second largest graduate talent pipeline globally by the end of 2020. Since 2014, around 125 Startups were funded between 2014 and 2016, with a total investment of $256 Mn. The startups that raised more than $10 Mn in edtech sector are Simplilearn, Toppr, BYJU’s, and EduPristine.