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Varthana is an education finance company that has been empowering affordable private school owners and students across India since 2013. Through customised loans and a suite of value-added services, Varthana has helped thousands of schools expand their reach and enhance the quality of education. Team Enmasse recently spoke to Steve Hardgrave and Brajesh Mishra, Co-founders at Varthana, about their journey, the impact it has made on thousands of schools, and how it weathered multiple shocks over the last decade through a combination of culture, strategic clarity, and customer-centricity.
Team Enmasse: Hi Steve and Brajesh. So tell us, what is Varthana's core purpose, and how does it align with your personal values?
Steve Hardgrave: Through my past experiences, beginning with founding and running a Mexican microfinance institution and investing in social venture portfolios through Omidyar Network and Gray Ghost Ventures, I witnessed the transformative power of microfinance and education. I met Brajesh Mishra, my future co-founder, when we played a key role in conceptualising and launching the Indian School Finance Company (ISFC). By empowering these dedicated school owners, I realised we could create real meaningful impact
Brajesh Mishra: We are passionate about the power of education to change the course of an individual’s life and to help the children who are the future of this country. Varthana aims to unlock the potential of Affordable Private Schools (APS) and provide quality education to millions of underserved students in India. This aligns deeply with our values and experiences.
Team Enmasse: Having travelled throughout the world, why did you choose India?
Steve Hardgrave: During my time at Gray Ghost Ventures, we explored ways to support education, recognising its significant potential to create a long-lasting impact on an individual. We chose India because of its demographic advantage as it has the largest youth population. The prosperity of these youth and the country is rooted in quality education. The end consumers of the affordable private schools we serve are parents from Entrepreneurial Households who are eager to move their children from government schools to affordable private schools so their children can have a better future.
When we launched Varthana in 2013, we had already witnessed a strong demand for better education. Parents from low-income communities were willing to forgo free alternatives and pay a significant portion of their income for quality education. Our mission is to be the trusted partner to empower school owners and students within the affordable private school segment.
Team Enmasse: Can you tell us a bit more about Varthana’s journey to date?
Brajesh Mishra: Varthana’s journey has been rooted in growth and transformation. Inventing an entire process of underwriting loans to an underbanked segment has been both a challenge and a privilege. In the beginning, many of these school owners were surprised that a finance company would loan to schools, but as we built trust and strong relationships, we developed a large base across the country. Before COVID, we were the fastest to reach a scale of INR ~1000 Cr AUM and had lent to more than 4,000 schools due to the effectiveness of our hub-spoke model and investments in technology.
Steve Hardgrave: Since our mission is to ensure better learning outcomes for children, we have always considered ourselves an education solutions provider engaging all stakeholders that can allow schools to improve the learning experience. For example, we are unique in having a large cohort of education specialists within the company. This team delivers support and solutions beyond finance, and this really empowered us to support our customers through the pandemic.
Team Enmasse: So Varthana was in the thick of things when the pandemic struck. It must have been challenging.
Brajesh Mishra: While we had dealt with multiple other situations like demonetisation and GST implementation, the pandemic acutely tested the resilience of the entire sector. What sets Varthana apart is our deep understanding of the sector and the end customer. We maintained strong relationships with all our stakeholders—from school owners and students to employees and investors. And this is what really came into play during the COVID-19 crisis.
The management team's proactive engagement ensured that employees remained loyal and went the extra mile, while investors continued to demonstrate their trust by providing additional capital. This collaborative approach with all stakeholders has been vital in Varthana's ability to bounce back stronger from crises.
Team Enmasse: How did Varthana manage its fiduciary and financial responsibilities during the crisis?
Steve Hardgrave: We took a very proactive approach on this front. First, we maintained open communication with all our lending partners, demonstrating our commitment to meeting our obligations. Internally, we implemented tight controls on expenses and cash management while also making adequate provisions to cover potential losses. This disciplined approach allowed us to keep our balance sheet stable and meet our fiduciary duties, even as the portfolio faced significant stress.
Brajesh Mishra: Even before the crisis, we had built up a healthy capital buffer, which gave us financial flexibility. As the stress intensified, we quickly raised an additional ₹105 crores in equity, mostly from existing investors. This capital infusion was crucial, allowing us to not only maintain operations but also to continue supporting our partner schools. The capital buffer meant that we did not have to restructure any of our loans, nor did we have to avail any of the pandemic moratorium programs. This prudent liquidity management and proactive engagement with lenders in the first year of the pandemic gave them the confidence to provide additional credit lines over the course of the prolonged disruption to the sector.
Team Enmasse: You mentioned employee loyalty and a focus on customers. How does this translate into operations and product development?
Steve Hardgrave: At Varthana, we see ourselves as something other than a typical financial services provider. Since part of our DNA is that of an education solutions company, this customer-centric mindset permeates everything we do.
During the pandemic, our team was on the ground immediately, engaging with school owners to understand their specific needs. We then leveraged every available resource to help them weather the storm. Financially, this included loan restructuring, working capital support, and access to government schemes.
The solutions and content support we provided schools during the pandemic are what really separated Varthana from any other lender. While higher fee schools and students could transition to remote, digital education, middle and lower fee schools and parents were unprepared to do so. Varthana’s Ed Specialists immediately curated a digital content system mapped to the various school boards that could be delivered over WhatsApp. The Varthana team not only designed the system but also trained and supported teachers in implementing the same. The lowest-fee schools could not deliver even this type of digital content. For them, the team created, printed and distributed tens of thousands of paper-based learning packets that could be sent home for students to work through remotely. Even some government schools used these packets.
Importantly, our efforts simultaneously helped solve the problems faced by our customers while also protecting Varthana’s balance sheet and financial health in the process.
Similarly, in our product development, we don't start with a credit scoring model or financial data. Instead, we deep dive into the economic realities and aspirations of school owners and students to design tailored solutions that address their pressing needs and unlock their full potential.
Team Enmasse: Did you observe any differences in how parents at different income levels reacted to the disruption in their children's education during the pandemic?
Steve Hardgrave: Yes, we definitely saw some interesting differences in how parents from different economic backgrounds responded. On one end, parents from more affluent households, who had the means to provide digital devices and internet access at home, could engage with the remote learning initiatives we and the schools offered. They understood the importance of continued education, even if the experience could have been better.
However, for parents in the lower-income segment that we primarily serve, the situation was much more challenging. Many did not have access to smartphones or laptops at home, so their children could not participate in any kind of remote classes. Without physical schooling, a significant portion of these parents chose to stop paying fees altogether, as they felt they were not receiving the full service.
This divide really highlighted the deep socioeconomic disparities when it comes to access to quality education. While the more affluent parents wanted to ensure learning continuity, those in the lower-income brackets were forced to prioritise basic survival over their children's education during this crisis. It's a stark reminder of the essential role affordable private schools play in providing learning opportunities to underserved communities.
Team Enmasse: Before we discuss the culture, can you give us an example of the kind of engagement you sustain with a customer?
Brajesh Mishra: One of the really inspiring stories that exemplifies the impact our partner schools are having is that of Everest Higher Primary School in Tumkur. The school's owner, Mr. Krishnamurty, first took over the management back in 2006. At the time, Everest was operating out of a rented building with just seven classrooms and three teachers, serving grades 1-7.
But through his passion and dedication, as well as Varthana's support, Mr. Krishnamurty has transformed Everest into a thriving 49-classroom institution with 27 teachers. Today, they offer classes up to 11th grade, with plans to start 12th grade soon.
What's remarkable is that Everest is an English-medium school using the NCERT curriculum. With a fee range of ₹20,000 to 40,000 ($240-480 USD) per student per annum, it is the best school in the local area. And the results speak for themselves—Everest has maintained a 100% pass rate in the 10th grade SSLC exams for the past ten years.
Team Enmasse: This must also have an impact on parents.
Steve Hardgrave: Exactly! For example, Sameena Firdoze is a parent with two children studying at the Everest School. When the pandemic struck, Sameena's family faced financial difficulties, but she never considered transferring her children to a government school, despite the strain. The school worked with Varthana to delay fee payments, and we also provided printed learning materials to ensure the children could continue their studies.
Stories like Sameena's underscore the deep-rooted trust and aspirations of the families we ultimately serve. They are willing to make significant sacrifices to provide their children with quality education. Varthana is committed to being their partner in realising this vision, even in the face of adversity.
Team Enmasse: Back to culture, then. How has Varthana's organisational structure and talent management enabled the company to scale and remain resilient?
Brajesh Mishra: Varthana's experienced management team, with over 120 years of collective expertise in critical areas like collections, credit, and operations, has been a major strength.
Even during the COVID-19 pandemic, Varthana ensured there were no layoffs, instead implementing selective salary controls and prioritising the well-being of its frontline employees. This people-first approach has fostered a culture of loyalty and dedication, enabling Varthana to scale while maintaining a high-performing team. The impact of people who work at Varthana is a huge source of joy and satisfaction to us as founders. We are humbled to be recognised as a Great Place to Work® for five consecutive years and have seen no senior leadership attrition.
Team Enmasse: Now, let’s talk numbers. How big is Varthana today?
Steve Hardgrave: Since our inception in 2013, Varthana has achieved significant scale and impact. We were one of the fastest-growing companies in the education finance sector, reaching an AUM of around ₹1,000 crore by 2020.
Today, we've impacted over 4 million students, disbursed over 40,000 loans, and served over 11,000 schools across 15 states through our network of 40 hubs. This is even in the face of challenges like demonetisation, the NBFC crisis, and the COVID-19 pandemic.
Team Enmasse: Now education in India today is indelibly linked with technology. Obviously, Varthana is not an “edtech” but do you use a lot of tech?
Steve Hardgrave: Technology has been a key enabler in Varthana's ability to scale our school-focused operations and deliver greater value. Our strategic pan-India presence achieved through a hub-and-spoke model and our in-house sourcing team with decentralised credit assessment processes powered by technology have helped us forge stronger relationships and streamline our underwriting.
Where technology has had a profound impact, however, is in our student lending business. Put simply, this business could not exist without technology at its core. The entire process is paperless and highly automated, such that we can deliver high volumes of smaller loans directly to students pursuing higher education throughout India. Alongside our lending offerings, we've also developed a range of digital initiatives under our "Beyond Loans" program to create deeper, more sustainable connections with our partner schools, teachers, and students.
Team Enmasse: How does Varthana's work in empowering affordable private schools contribute to the economic development of smaller towns and communities?
Steve Hardgrave: One of the really inspiring aspects of Varthana's mission is the way our partner schools are driving economic vitality and opportunity in smaller towns and communities across India. Educational institutions we support often experience significant growth, expanding into thriving establishments with multiple classrooms. These schools serve hundreds of students, offering high-quality, English-medium education. They also play a vital role in creating job opportunities, attracting families, and contributing to the overall economic development of the local area.
Stories like this are replicated across the thousands of affordable private schools we work with, many of which are located in rural and semi-urban areas. By empowering these dedicated education entrepreneurs, we're not only expanding access to transformative learning opportunities but also catalysing positive ripple effects on the local economy and community.
These small-town schools are proving to be essential engines of growth, aspiration, and social mobility. Varthana is proud to be the trusted partner helping them unlock their full potential and drive meaningful impact at the grassroots level.
Team Enmasse: What is Varthana's vision for the future, and how do you plan to build on your strengths?
Steve Hardgrave: Going forward, we see immense potential in building on our deep understanding of the affordable private school segment and the economic aspirations of our end customers—both school owners and students. Our strategic pan-India presence, strong relationships, and technological capabilities provide a solid foundation for rapidly scaling our operations and expanding our product suite.
Beyond just lending, we plan to deepen our "Beyond Loans" initiatives that strengthen our connections with schools, teachers, and students. This could include further enhancing our education support programs, developing new digital tools, and exploring opportunities to drive measurable improvements in learning outcomes.
Ultimately, Varthana's vision is to be the trusted partner and solutions provider for the entire Indian education ecosystem. We aspire to be a catalyst for transformative change in the lives of millions of families across India. With our unwavering commitment to our customers and the resilience we've demonstrated, Varthana will continue to lead the way in expanding educational opportunities and driving meaningful impact in the years to come.
