Pearson Affordable Learning Fund

Michael  Chu; Vincent  Dessain; Kristina  Maslauskaite

Case | HBS Case Collection | March 2015

Pearson Affordable Learning Fund

by Michael Chu, Vincent Dessain and Kristina Maslauskaite

Abstract

An in-house venture capital fund for affordable private schools at the base of the pyramid established by Pearson, the world's largest education company, PALF sought to invest in business models providing superior educational outcomes in emerging markets on a profitable and scalable basis. With Pearson's overall strategy shifting from the developed to the developing world and from a supplier of books to a host of other learning products and services, the company thought PALF's lessons might be applicable to Pearson's core businesses. By 2014, Katelyn Donnelly, the Managing Director of PALF, and her team had made seven investments in Africa and Asia and were close to fully committing the $15 million earmarked for the initiative. In the upcoming meeting of PALF's Investment Committee, Donnelly must present a recommendation: should Pearson allocate more internal money to the fund or should they open it up to third party investors?

Keywords: impact investment; low cost private schools; investment fund; business at the base of the pyramid; Transition; Investment; Development Economics; Business Growth and Maturation; Social Entrepreneurship; Emerging Markets; Private Sector; Education; Education Industry; Asia; Africa;

Language: English

Format: Print

27 pages

Educators Purchase

Citation:

Chu, Michael, Vincent Dessain, and Kristina Maslauskaite. "Pearson Affordable Learning Fund." Harvard Business School Case 315-109, March 2015.

In 2018, Henri Seydoux, CEO and Founder of Parrot, believed that his company was at an inflection point in its history. Parrot had been a European leader in consumer electronics since the 1990s, first developing Bluetooth kits for cars before moving on to electronic toys and, significantly, the AR Drone in 2010 — a remote-controlled quadcopter that was way ahead of its time. In the years that followed, Parrot’s sales volumes and popularity quickly increased. But new players were entering the market. Giant Chinese rival DJI, in particular, aggressively lowered its prices, forcing weaker companies out of the market. If Parrot was to survive the shakeout, Seydoux would have to figure out how to compete in an industry where even well-capitalized companies were collapsing. The questions that he faced were both strategic and urgent. Where to compete and how to win?

After long dominating Mexican microfinance, Compartamos Banco faces the emergence of fintech, just as for the first time its loan portfolio and clients have declined. Enrique Majós, CEO of GENTERA, the bank´s parent company, is keenly aware of the profound changes since the Compartamos IPO in April 2007, when it was valued at $1.5 billion and became the first bank wholly dedicated to microfinance to be quoted in a major stock exchange. Since then, the market has become intensely competitive, with both large established institutions and new entrants vying for the same customers. Simultaneously, the digital era has spawned fintech, threatening to disrupt Compartamos’ highly successful model but also providing opportunities for the bank to reshape it. While challenged to manage key innovation within a leading incumbent, Majós must consider whether to commit his team to a major cost reduction in the next few years to his board of directors at their next meeting at the end of the month.

With a breakthrough cure for Hepatitis C listing in the U.S. at $1,000/pill, Gilead must now solve the issue of making it available to patients across the world, much as it did for its blockbuster HIV/AIDS antiretrovirals. For Erik Musalem, the new general manager of Gilead Mexico, the challenge was complicated by operating in a middle-income country, where Gilead’s terms for more vulnerable nations did not apply. For all practical purposes, Musalem had only one customer for his company’s Hep C medicine: Mexico’s public health system and the National Pricing Commission that set prices annually for the entire sector. With no lack of priorities competing for the finite resources of the public health sector, Musalem’s charge was to devise the strategy that in the long run would maximize access to the cure in Mexico while protecting the financial strength of Gilead Sciences, Inc.

Faculty & Research

Pearson Affordable Learning Fund

Abstract

Citation:

About the Author

More from the Author