Millennials can’t get jobs. New edtech fund aims to fix that

Aspiring Minds, a company that makes tests to evaluate potential employees, has launched a US$1 million seed fund to invest in education and employment technology startups. Founded by Himanshu and Varun Aggarwal, the seven-year-old company is backed by the Omidyar Network, a social enterprise investment fund launched by eBay founder Pierre Omidyar and his wife, Pam.

“We want to encourage companies which match disruptive innovation solutions like ours to build capabilities in the education and employment technology space”, Himanshu explained in a press release. They plan to invest across India, China, and the United States.

India’s employability problem

India, set to have the world’s youngest workforce by 2020 (PDF link), has over 70 million students enrolled in higher education. This makes it the largest higher education system in the world with a growth of over 40 million students in the past two decades.

Despite the presence of higher education facilities, unemployment rates among educated youth are alarmingly high. According to a NASSCOM report, only 20 percent of India’s IT graduates are considered employable.

Startups have taken notice of the issue. India’s edtech industry is valued at over US$1 billion and there are many companies using technology to improve employability.

Aspiring Minds makes AMCAT, an employability test that assesses students on language, cognitive, and behavioral skills. The product has tied up with over 2,000 companies and claims to be the world’s most widely taken employability test.