Online education company KNeoMedia (ASX: KNM) has announced its entry into India’s private school education market via an exclusive licensing agreement with education technology investment company Augustya.
The deal means Augustya will deploy KNeoMedia’s software-as-a-service (SaaS) platform into schools across India, which the company expects will facilitate a foothold in the large and well-funded Indian private education market for “minimal cost outlay”.
KNeoWorld is a learning program and assessment tool focused on storytelling to drive engagement and improve learning for children.
Augustya and KNeoMedia have secured a 10-year exclusive agreement although various key performance indicators have yet to be agreed or formalised.
According to the terms of the deal, the two companies will market, sell and distribute KneoMedia’s SaaS technology with the online education company set to receive $40 for each seat licence sold.
“This licensing agreement with Augustya is an outstanding development for KNeoMedia – it allows us to capitalise on a huge market with a well-connected and credentialed local team that have excellent in-country contacts and established channels to market,” KNeoMedia chief executive officer James Kellett said.
He said the agreement has been structured in a way that “Augustya is well incentivised to drive sales growth”.
“Dealing with the private education sector means they are working with a sector that is already funded. Our priority is to assist Augustya lock in these first sales, which will provide the catalyst and validation to scale up in what is undoubtedly a very large market,” Mr Kellett said.
Building an Indian presence
Following a six-month working period to formalise the deal, the first sale will be consummated “in the next few weeks” following extensive testing and reviewing by a respected international school in Mumbai.
As part of the testing phase, more than 80 Indian teachers and education administrators were engaged in the initial review program, which has now bypassed the pilot stage.
The ultimate goal for both companies is to target well-funded private schools given that India has over 1.5 million kindergarten to Year 12 schools with over 250 million students enrolled in total.
According to research carried out by YourStory, 40% of students in India (equivalent to around 100 million people) are educated in private schools that are not dependent on government funding.
KNeoMedia is hoping it can promote its KNeoWorld SaaS platform effectively and capture a significant commercial opportunity within a multi-billion-dollar market.
In terms of market readiness, KNeoMedia said it has already developed local content for the Indian market while its technology platform is “now ready” for sales and distribution through web portal KneoWorld.in.
In a bid to boost market appeal and sales in the medium-long term, KNeoMedia said its content management system and library has been provided to its licensee partners to enable them to create more localised content for the Indian market and enhance the platform’s overall functionality.
Furthermore, the company is targeting the US market – yet another large education market, where KNeoMedia said its prime focus is “locking in more deployments”.
The news helped push KNeoMedia shares up by over 11% to $0.02 per share in morning trade.