1/ 👇Thread on gaps I see in the preschool and daycares in India, and opportunities for startups.
2/ It’s estimated that Urban India has ~40M kids in the preschool age group i.e. 1-6yrs resp. Of these, estimates say ~10M kids go to preschool today. On avg they pay ~Rs 20-25K /yr. Thus a ~$3B market. One that’s doubling every 4-5 yrs.
3/ Estimated that 15-20% market is organised having some mid to large players like Euro Kids, Kidzee and KLAY. Each having super healthy profit margins (between 25-50% EBITDA margin).
4/ However, 80-85% of the market is unorganised, and served by neighbourhood mom and pop preschools. Often, these are just play schools versus a proper preschools with a defined pedagogy.
5/ Organised players are gaining market share at the expense of mom and pop preschools by serving to the unmet needs of the parents. Needs like security and hygiene through child proofing the place, cleanliness, clean bathrooms etc
6/ They’re also serving parent’s need for control by providing CCTV access, by having more frequent parent-teacher meetings in some cases, and by improving the parent communication across channels.
7/ They also convince the parents that their pedagogy and materials (educational toys etc) are best in class, and combined with high quality teachers, their kid is in good hands.
8/ And for 5, 6, 7 mentioned above organised players charge a price premium, often 100% over mom and pop centres, and is recurring in nature. While the additional investment to a large extent is one time.
9/ However, one thing that many if not most don’t invest in is the teacher quality. In fact, I will go on to say that teachers is the #1 component in delivering child’s happiness and learning outcomes, even more so than pedagogy or materials.
10/ At that young age, teacher is key in engaging the child and building an emotional connect. In fact, a change of teacher can often lead to unrest in the child. And maybe some parents might relate to their own experiences.
11/ Yet our preschools, both organised and mom and pop alike, are anything but teacher centric. Teachers don’t get paid well. Usually Rs 3-5K per mo in mom and pop setting. Teachers don’t get the recognition. Its often the management.
12/ And most importantly they don’t get the flexibility, which they often desire. There is no flexibility in timings and unplanned leaves. Usual timings are 8:30a to 12:30p. Young moms-at-home often find it hard to leave their home by 7:30-8a.
13/ There is no career progression for a star teacher. They can usually take up an admin role, or at best become the principal. But this takes a lot of time. As a result, there is a limited money progression too.
14/ There is also limited investment, and in case of an organised player limited enforcement, for upskilling the teacher through teacher training programs. No effort is put in getting the teacher’s buy in for the underlying pedagogy.
15/ As a result, preschools in India see high teacher attrition. In fact, my hypothesis is that many at-home moms might be best of teachers, given adequate teacher training, flexibility in timings, more money and less of a daily commute.
16/ Besides teacher quality, other big gap I see is lack of good quality and affordable preschool options today in the neighbourhood. Some organised players who are good charge too much of a price premium.
17/ The third big gap I see is the complete lack of tech usage by preschools. Tech can be used to build personalised learning paths for the child, drive efficiencies in running the centre, and significantly improve the parent-teacher communication.
18/ I really feel there is an opportunity to leverage at-home moms, put teacher at the centre, and leverage tech to create a better preschool experience for children and parents.
19/ Would love to meet startups who are building or thinking of building for the pre-primary /preschool children. Feel free to drop a WhatsApp to 9811832868.
