Deal focus: S Chand unlocks digital doors

For the management of S Chand Group, a commanding presence in India's education publishing market might have been satisfying enough.

However, as the team surveyed the sector in 2012, they felt that there was far more they could do. New hardware and software were creating considerable opportunities for an experienced education-oriented player like S Chand.

A INR2 billion ($38 million) investment from Everstone provided the support that the company needed to explore the possibilities of digital ventures. Along with the financial means to acquire educational software developers, the involvement of Everstone helped bring in more efficient ways of doing business.

"It was more of a family-run business earlier. Now I think after the investment we havemade this organization a lot more professional," says Himanshu Gupta, joint managing director of S Chand. "There are clearer systems and guidelines to take the company forward, and it has given us a clearer vision."

Now the company has gained another prominent backer, with the conclusion of a new $27 million funding round ledthe International Finance Corporation (IFC), which put in $17 million. Everstone put in the rest.

The educational product developer was a natural fit for the IFC, which recognized an investment opportunity that would help it pursue its goals of promoting positive economic development. S Chand, for its part, saw IFC as a partner with more potential for global alliances than Everstone.

Though IFC contributed the bulk of the capital, Everstone still played a crucial role in the proceedings. IFC is an LP in the private equity firm's funds, and this connection led to the first meeting between S Chand and the development finance institution.

Everstone's previous investment gave S Chand the flexibility to take financial chances that it could not support with its publishing business alone. The company's commitments since 2012 include the establishment of an in-house connected classroom venture, DS Digital, and investments in education platform developers Edutor and Smartivity.

Currently S Chand's products are used by as many as 25 million students in India, in almost 25,000 education institutions; the company hopes to grow its audience to 100,000 institutions and 100 milion students in the next five years.

With its recent moves in the digital instruction field, S Chand plans to build itself into a platform providing multiple forms of education to augment its historical strengths in publishing. A willingness to advance educational technology, supported by S Chand's generations of experience in the field, could result in a formidable lead in the market.

"Books are now becoming more of a hybrid solution. So a book will not only mean a print book; they will have other features, like interactive videos, animations, multimedia and augmented reality," says Gupta. "These things will help the students learn better in their own environments."

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• Topics
• Expansion
• Media
• South Asia
• IFC
• Everstone Capital
• India
• Growth capital
• Education
• Media