The Pearson Affordable Learning Fund

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Imogen Taylor
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1 Find us The Pearson Affordable Learning Fund Investing in Affordable Education Solutions across the Developing World Please contact if you would like to learn more.

2 About us The Pearson Affordable Learning Fund (PALF) makes minority equity investments in for-profit companies to meet a burgeoning demand for affordable education services across the developing world. The fund was launched in June 2012, with $15 million of initial Pearson capital, to invest in innovative models of high quality education delivery for the poorest families in the world. We work in collaboration with governments, donor agencies, NGOs, entrepreneurs, investors and other corporations to share best practices, support fantastic entrepreneurs and catalyze the most promising innovations. Our work reinforces Pearson s mass-market strategy and research function particularly in access and affordability. Our Vision To help provide millions of the poorest children in the world with a quality education. To demonstrate to governments and the international community that lowcost private education can help them in their goal to ensure every child has access to a high quality education. To make a market-based return on our investments. What do we invest in? Low-cost private school chains (LCPS) in emerging markets. Service providers to LCPS (e.g. assessment solutions, teacher training). Education technology solutions (e.g., innovative blended learning content, student data and information systems). A Hands-On Investment Approach We are committed to supporting mission-driven entrepreneurs who are building high-quality education solutions for the low-income segment in the developing world. Our strategy includes: Commitment to an investment horizon of 5-10 years with competitive market returns. Focus on significant minority equity stake investments, with strategic input and board representation. Preference to invest in prototype and proven models at the seed stage and series A. Use our education expertise to ensure a relentless focus on efficacy and learner outcomes. Take early risk on very innovative models and partner through the iterative process.

3 Why invest in for-profit education in low-income countries? As we approach 2015, it is clear that the international community will not meet its commitment to universal primary education (MDG goals). Evidence shows there has been massive growth in the private education sector across the developing world in the last decade. Millions of parents have voted with their feet, opting to send their children to low-cost private schools (LCPS). These schools are accountable to quality conscious parents and often demonstrate lower teacher absenteeism and superior learner outcomes than alternative public sector schools, at a lower cost per student. Despite this growth in the LCPS sector, more action is needed. Governments and donors need to be ambitious and support whole system reform, in which both public and private sectors can play a part. Entrepreneurs and start-ups need to be nurtured to help deliver viable solutions, supported by expert investors, credible governments and supportive regulatory environments. Finally, at the core, robust and reliable data on the efficacy of affordable education should inform government policy and resource allocation and ensure value-for-money for the taxpayer. As the evidence base supporting low-cost provision accumulates, we believe that governments will come to view low-cost private provision as a vital part of their strategy to ensure high quality, education for all. The question every leader should ask is, How long do we have to ensure the next generation of children are educated and ready to contribute to the rapidly changing 21st Century? 57 million Children out of school 6% Aid to basic education Funding Gaps to reach universal education access by 2015 $26 BILLION (pre-primary and primary school) $38 BILLION (lower secondary) In order for developing world governments to deliver universal education access and drive improvements in quality across all schools, consideration should be given to the potential of the private sector, which already effectively contributes to educating students from all income segments.

4 Our portfolio Experifun, India (Edupreneurs India Winner, Nov 2013) Low-cost, interactive science learning products aimed at improving science learning at the 6-10 grade level. Pilot programs launched across 15 schools in Sudiksha, India (Edupreneurs India Winner, Nov 2013) A network of affordable private pre-schools for underprivileged children in India. Currently at 36 schools and scaling quickly. APEC, Philippines (December 2013) A chain of low-cost secondary schools built in joint venture with the Ayala Corporation. PALF Office, London PALF Office, New York Omega Schools, Ghana (July 2012) A chain of LCPS that have expanded from 10 schools to 38 schools schools by 2013 year-end. Includes a girls-only secondary boarding school, cashless payments, and an innovative workbook system. Avanti Learning Centres, India (November 2013) A seed investment in quality, after-school test prep centres that help to prepare students from low-income backgrounds college entrance exams, Students spend up to 18 hours a week at a centre and are charged only $20 per month. PALF-Village Capital: Edupreneurs, India (September 2013) 14 promising education startups enter a 3-month incubator program. Two peer-selected winners each receive $75k worth of convertible note funding.

5 Challenges for the Education Investment Sector: Lack of deep sector expertise - education requires extensive operational education knowledge. Lack of early stage risk capital to support early stage entrepreneurs to conduct R&D and prove their models. Lack of operational support education companies require local support. Government regulation differs greatly from market to market investors need to manage this risk carefully. Lack of credible management teams with the willingness and ability to build high quality and scalable low cost education companies. Lack of deep sector expertise, education requires deep operational education expertise. Opportunities: Thought leadership and advocacy for private education in international forums and with developing world governments. Seed, Series A and Series B equity investment opportunities as well as debt Role for risk capital and grants for early stage R&D for innovative models.

6 Join us We have worked with a network of investors, NGOs, entrepreneurs and government communities. Our mission is to catalyse the private low-cost education ecosystem by demonstrating market competitive returns and high education quality. If you would like to work with us in any capacity, whether as a co-investor, recruitment partner, potential investee, grant provider, or just an interested party eager to learn more, please contact info.palf@pearson.com Our current partners include

Auditorium 1 11:30-12:45 Wednesday, 4 th November, 2015

Educate A Child at World Innovation Summit for Education (WISE) 2015 Doha, Qatar Session: Current Education Financing Mechanism and Promising Options Auditorium 1 11:30-12:45 Wednesday, 4 th November,