Matrix Partners India, a venture and growth capital firm, has invested 300 million Indian rupees ($7 million; €4.6 million) in Tree House Education and Accessories, a Mumbai-based pre-school educator. The firm is the sole investor in what is the first round of funding for the pre-school enterprise.
Established in 2003, Tree House operates more than 45 pre-schools across India, making it the largest chain of pre-schools in Mumbai, and the largest non-franchised pre-school company in India.
Rishi Navani, co-founding managing director of Matrix Partners India, said in a statement that “education is a large, attractive market opportunity in India characterised by significant growth and price inelasticity”.
he funding will be used to expand the business and to set up more schools across the country. Rajesh Bhatia, the managing director of Tree House said that the pre-school education market in India is highly fragmented and as such, there is scope to scale the company.
Education is a large, attractive market opportunity in India characterised by significant growth and price inelasticity.
The firm is investing out of the Matrix India Fund, a $450 million vehicle focussed on providing early stage and growth capital to businesses in the consumer services sector. The fund had initially closed on $150 million in August 2006 with the purpose of making venture capital investments. Subsequently, however, the firm decided to expand its fund as it began seeing opportunities that had significantly larger capital requirements.
At the time of the fund’s final close in November 2007, Navani said that the firm was seeing “a number of opportunities that require more than $10 million of capital. With close to half a billion dollars in capital under management now, we can make larger growth capital investments and will continue to partner with entrepreneurs to build market leading consumer services companies.”
The Matrix India Fund makes venture capital investments of up to $10 million and growth capital investments of up to $50 million. Some of its past deals include Brand Marketing India, a foreign brand marketer; ItzCash, a pre-paid cash card company; Seventymm, an online movie rental company; and Yo! China, a Chinese fast-food chain with outlets in major Indian cities.
Matrix Partners India was co-founded by Rishi Navani and Avnish Bajaj in partnership with US venture capital firm Matrix Partners.