Premji arms atoddsover funding edtech
Premjiinvest and AP Foundation are divided over efficacy of for-profit education
BENGALURU: The senior leadership of billionaire Azim Premji’s foundation and investment arm are divided over funding edtech startups and the effectiveness of for-profit online education.
At the heart of the disagreements are two investments by Premjiinvest, which manages Premji’s wealth, in edtech startups—questt in October followed by Brightchamps in November.
Some executives contend that the investments are contrary to the views of the fund’s parent, the Azim Premji Foundation (APF), the country’s largest nonprofit with an endowment valued at $43 billion, and Premji’s stated position.
Premjiinvest, which manages assets worth $9 billion, has stayed away from backing forprofit enterprises in the education sector.
The investor’s charter, which sets the framework for capital deployment, also bars any investments in the edtech space, along with investments in tobacco and companies making arms and ammunition, three executives familiar with the development said, requesting anonymity.
APF, founded in 2000, has maintained that online tutoring does not help improve learning and has been working to improve the way children are taught in government-run schools in some of the country’s poorest regions.
Premjiinvest was merged with Azim Premji Trust, the holding entity for the endowment trust for Azim Premji Foundation, in 2018.
The money earned by Premjiinvest is eventually ploughed back to the foundation, which works in improving pedagogy in hundreds of schools in 50 districts across six states.
It appears that Premjiinvest’s decision to back edtech businesses goes against the approach of its parent.
Premji himself has questioned the edtech business model.
“The very nature of the education of children is such that online learning is suboptimal and offers very limited efficacy,” he wrote in a piece in The Economic Times on 24 October.
Calls and text messages to T.K. Kurien, chief investment officer of Premjiinvest, went unanswered. Emails seeking comment from Anurag Behar, chief executive officer of Azim Premji Foundation, and a spokesperson for Premji went unanswered.
Premjiinvest’s rationale behind the investments in Questt and Brightchamps will be questioned and discussed at the fund’s next once-a-quarter investment committee meeting, headed by Premji, according to an executive familiar with the development.
Azim Premji’s younger son, Tariq, is also a member of this investment committee.
“I don’t know the reason why Premjiinvest made these investments,” said an Azim Premji Foundation executive, requesting anonymity. “I don’t agree or understand the rationale behind these investments, and the Foundation’s view and Mr Premji’s view on this are well documented in public.”
“Even though Premjiinvest now comes under APF, the two entities have an independent structure, run by respective leaders. So, Premjiinvest has complete autonomy when it comes to making investments, and APF does not have any say in these decisions,” according to a second executive familiar with the development.
Startups such as Questt and Brightchamps claim that their offerings help children learn better, as many schools remain shut because of the pandemic.
Thousands of students have signed up for online courses during the pandemic to supplement their learnings without face-to-face interaction between teachers and students.
India is home to five edtech unicorns—byju’s, Unacademy, Upgrad, Eruditus and Vedantu. A unicorn is a startup valued at more than $1 billion.