Profile: Anil Ahuja

Anil Ahuja, founder of Singapore-based education technology start-up 88tuition, had an unusual path to seed-stage entrepreneurship: 20 years in private equity.

Ahuja became one of the first private equity investors in India, when as a vice president at Citi in Mumbai, he convinced his company to begin a direct balance sheet investing program in 1994. Early investments focused on financial services and the internet, but unfortunately, the nascent IT services industry was overlooked.

By 1997, Ahuja had moved on to Chase Capital Partners, subsequently J.P. Morgan Partners, investing via the India Private Equity Fund and Indocean Capital, an affiliate set up with Soros Fund Management. This led to an eight-year tenure starting in 2005 as a partner in 3i Group’s Asia team, where he helped build out an approximately 30-strong investment team across six cities regionally.

His success is perhaps best crystallised by the offbeat milestone of becoming possibly the only investor in Asia to have invested in two entities that went on to be worth more than USD 100bn each: Gautam Adani’s Mundra Port, a commercial port operator 3i backed in 2007, and HDFC Bank, in which J.P. Morgan took a 15% stake in 1999 for USD 37.5m.

“Private equity is a wonderful career and you can enjoy it for a lifetime, no question. But every investor faces the dilemma of how long to continue playing the same game,” Ahuja said.

“If you’ve done well enough to live a comfortable life, that’s what matters. To just keep increasing that number continuously is not something that allows you to have different experiences and engage with different people in a different world.”

No matter how good one gets at the game, it’s never easy to play in developing markets, which goes some ways in explaining Ahuja’s appetite for the challenge of grassroots start-up creation late in his career. The best illustration of this effect may be in the 3i leg of his journey.

On one side, there was significant success. Amid the global financial crisis, the firm was able to raise what stands as one of the largest-ever single-country infrastructure vehicles – the USD 1.2bn 3i India Infrastructure Fund. Nevertheless, the policy environment was too immature and the investors themselves too inexperienced. 3i folded its infrastructure program within five years.

“The entire Indian infrastructure story had fits and starts in terms of clarity, deals, exits, and listings – and this came at a point around 2008 when Asia was starting to crater,” Ahuja said. “But if you were able to hold through, you would have some pretty spectacular assets. We’re talking about being at the starting point of the entire Adani Group, for example.”

Timely exit

Ahuja had announced publicly in his early 40s that he would quit private equity by age 50 and made good on the promise when he stood down from 3i in 2013. In the meantime, he’s observed many of the growing pains have eased, although there still remains much to be proved.

“Private equity in Asia has definitely matured, and it’s a proper ecosystem now. But the experience base is still quite limited in terms of people who have been around for a while and seen serious meltdowns. There are a lot of people who haven’t sold enough companies,” Ahuja said.

“If we get a correction in capital markets and this cycle of private equity selling to private equity stops, then I think we have big problem in terms of LP money being returned.”

Ahuja spent his first post-PE years investing independently and observing a public debate about education in Singapore begin to take on socially existential tones. Educational resources in the city-state ranked highly against most Asian countries, but access depended greatly on economic class. As young as age 12, children were falling into runaway streams of either academic progress or oblivion.

88tuition was conceptualised and bootstrapped over a two-year period starting in 2017. More than 80 teachers were interviewed to hire the first three. Singaporean authorities were consulted for best practices in standards and methodologies, and technology was sourced globally.

The company is recognised by local authorities as a social enterprise: for-profit but with a significant impact agenda. Everything non-core is outsourced to control costs and conserve budget for the best teachers. Margins are slim by design, to control fees. If a student cannot afford the service, the price can be lowered or eliminated.

This philosophy led to one of the company’s big breaks in terms of user uptake. When the pandemic first shut down schools in Singapore, 88tuition was the only player among some 1,000 online educators to have a comprehensive pedagogical curriculum ready to go in digital form.

The company gave away its service for free during the worst of the lockdowns. Now, it counts 4% of children in the country as paying customers and 10% as registered users. “The traditional edtech space has been attracted by the profit motive, so there’s a bit of a disconnect. I’m not saying we will not end up making a profit – but that should not be the prime driver of your strategy,” Ahuja said.

The Philippines was the first international expansion, with Ahuja citing industry research suggesting some 90% of children under 10 were reading below their age-appropriate level.

Quality is important: Singaporean standards in teaching are maintained across core categories of maths, science, English, and Chinese. Access is too: In addition to being low-cost, the service runs on internet speeds of only two megabits per second, the requirement of a YouTube video.

India is next, and Ahuja is not intimidated by the competition barrier represented by the country’s incumbent unicorns.

Big beasts

Aarin Capital, a VC firm run by T.V. Mohandas Pai, chairman of Manipal Global Education, led a USD 3m round to support the Indian entry in September last year. Aarin was also an investor (now exited) in local segment leader Byju’s, which – following a USD 22bn valuation in March and various subsequent operational retreats – has become an avatar of bloated, overly commercialised edtech.

“In developed markets, the cost of tuition for two kids over 10 years can be the difference between retiring comfortably or retiring poor. In developing markets, I’m seeing people sign up for loans to pay for tuition for their children, and it just doesn’t make any sense to me,” Ahuja said. “We crashed the price of tuition in Singapore by about 95% and we’re going to do the same thing in India.”

There is a strange dearth of impact investment in India’s clearly impact-oriented edtech space. The first mover was the Chan Zuckerberg Initiative, which backed Byju’s in 2016. Last October, ABC World Asia, an impact investor with ties to Temasek Holdings, participated in a round for live streaming teaching app Vedantu. But that appears to be the extent of it.

Ahuja is hoping for more and points to Beijing’s regulatory crackdown on edtech as a glaring example of what can happen when social institutions of this kind become too much of a financial play. “There is some merit in what happened in China’s edtech industry, and there’s reason for that to repeat in other markets,” he said.

88tuition, operating in India as 88guru, aims to keep its model above board with a pure-play media approach. There are no adjacent products, no bells and whistles targeting well-meaning parents with additional fees. Could this model exist under Chinese edtech restrictions? “Given the kind of pricing we have, I would think that the government may even welcome something like this,” Ahuja said.

Affordability has necessarily come with a no-nonsense approach that appears to deliver a value all its own. One-hour lessons comprise 20 to 30 minutes of teaching, with the rest taken up by various assessment and follow-up activities to ensure understanding.

88tuition is the only player in Singapore that makes a feature of practising what is learned with a view to promoting learning outcomes. The idea is that handwriting exercises hardwire understandings into the brain. All-visual teaching processes, by comparison, are easily forgotten.

There is also a function for parents to log in and track the progress of their children in real-time, even checking if they’ve cheated by abandoning a video lesson early. The “teach-access-review” model aims to solve doubts as they arise. In case doubts persist, students can WhatsApp the relevant teacher and typically get a response within a day.

Live classes are a part of the offering, but it’s predominantly recorded video, as most users were found to prefer this convenience. The presentation is straightforward, arguably old-school, with a front-facing camera and front-facing teacher next to a writable blackboard, digitally superimposed meteorologist-style.

“A lot of the organisations that we compete with and intend to compete that have very junior teachers or pure actors who are just delivering lines that go along with the animation script. That’s a disservice to society,” Ahuja said. “We only work with teachers who have 15-20 years of experience. No animation, nothing gimmicky.”

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• Topics
• Southeast Asia
• South Asia
• Technology
• Infrastructure
• Asia
• India
• 3i Asia Pacific
• JPMorgan Chase & Co
• Education