COVID 19 has created an extremely challenging environment for most businesses, because of the depth of the recession and the uncertainty of when it will recover.
Preschool and daycare industry is getting hit even harder as parents are struggling with their incomes and fearful of sending their kids to school. This can result in a long term recession for the industry, which has actually never seen tough times in the last two decades.
"I expect more than half of the preschool and daycare centers would have to shut this year or next year as they do not have the financial strength to sustain prolonged closures and downturns. But it seemed like a shame for them to have to shutter their business and their dreams. I tried to rack my brain to think of what we can do to help them in this challenging market," said Amrut Dhumal announcing the acquisition fund.
"The acquisition fund will provide partial and complete sale opportunities to individual centers, small chains, and large chains. This can provide these entrepreneurs with an honorable exit to the business that they have worked so hard to build. We are looking to buy 100 centers, with around 100-400 kids per year in the last three years. Many of these centers may be losing money this year and many may do so next year as well, but we have built the capacity to hold for three years till things recover. By doing this we think we can give continuity to the efforts of these entrepreneurs," added Amrut.
Mindseed has already closed a quarter of the deals with entrepreneurs who are looking to sell for a variety of reasons:
1. Multiple centre chains keeping their company alive by selling some of their larger and more profitable centers.
2. They do not have the finances to continue but do not want to close and dislocate their staff and kids.
3. They cannot continue to operate the business, but they want their legacy to live on.
4. Standalone / franchise centres, who prefer a one-time acquisition fee and a steady rental flow rather than risking the ups and downs of the business in these challenging times.
"These are extremely personal decisions, all of them are very challenging to make, six months ago none of us could have predicted that we would be where we are today. These times are difficult and I think nationally more preschool & daycares are going to close than those that continue. However, in our own small way, I hope we can give some entrepreneurs an exit, let some of their dreams continue to be fulfilled, and let their legacy live on even in these times," added Dhumal.
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( With inputs from ANI )