Gray Matters eyes education sector in India, plans to invest $40 mn

US-based impact investor Gray Matters Capital (GMC) has earmarked around $40 million to invest in India for the education space. GMC will not only invest but will also come as a Limited Partner (LP) in the fund, which will focus on the affordable space in private schools.

Ragini Chaudhary, its India chief executive, said the money would be used over the next three years to back 35-50 enterprises focused on affordable private schools.

“We will identify new fund managers and create funds focused on the education and skilling sector,” she said adding that the investment will be for profit enterprises whose products and services can be accessed by schools at an affordable price.

The enterprises could be start-ups, existing companies or a co-investor.

GMC, since entry in India, has invested at least $50 million and funded 23 enterprises. Via direct investment and other investments. It has been an anchor investor/LP in funds like Education Catalyst Fund (three investments – Simulanis, Buddy4Study, Kopykitab) and IAN Fund-1.

It has also gone at micro finance through Caspian Impact Investments, India Financial Inclusion Fund and Bellwether Microfinance Fund.


Recently, Gray Matters sold its 81.92 per cent share in Delhi-based ISFC. Caspian, also an impact — focused investor, will also exit the company, selling its 3.48 per cent stake.

The Sellers and ISFC have entered into binding agreements with Manappuram Finance Limited and the aggregate cost of acquisition is Rs2.12 billion and it will be cash consideration.

ISFC has been Gray Matter’s first exit in the Indian education space. Else the investor is in the process of realising its proceeds from leading microfinance sector funds such as Caspian Impact, Bellwether Microfinance and India Financial Inclusion Fund.


Gray Matters says it invests in companies that aim at underserved populations in developing countries. Its investments span micro finance, information technology, health care, energy and education sector. In 2007, it turned its focus to education for underserved children in developing countries, especially India.