2025 Education Investment Landscape in APAC

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Hello, everyone.

Good morning, good afternoon, good evening, depending on where you are joining from today.

Welcome to this annual webinar, hosted by LEK Consulting's global education practice, where we try and distill our learnings, from the work that we do, in the sector across the globe.

Today on this webinar, we are, we are close to one fifty participants who have joined from across the globe.

And, the participants today include a mix of operators, investors, educators, and, and potentially advisors.

My name is Sudip Lar. I'm partner in LEK's global education practice.

I'm I'm joined by my colleagues, Chinmay Javeri and, Subhash Punjay. Chinmay is a partner in education practice, and Subhash is a principal in, education practice.

We are going to be your host for today.

Before we before we begin, couple of quick announcements.

This webinar is being recorded, and recordings will will be made accessible to to participants.

We have set aside about ten ten to fifteen minutes, of q and a towards the end of the webinar.

There's a there's a q and a functionality, which is which is provided.

So please feel free to share your questions, reflections, and, we will take them take them in the end. Now given the paucity of time, we would also encourage participants to, to reach out to us, on a one on one basis, and we would love to engage in, in discussions or topics of, of your particular interest.

So great. I think, with that, we can we can get started. And, we, we, so what if you can move to the next page?

I think we have, we have two discussion items team, in keeping with the with the annual ritual. We will first touch upon the education investment trends and, and doing a roundup of the deal dynamics investment activity that happened in twenty twenty four. And section two is more forward looking where we talk about what are the mega themes that we, we are we are backing and, and investors and operators should watch out for as interesting themes to to participate in.

Before, before we get there, maybe a quick pulse check, from the from the audience here. And there are two or three poll questions that, that we would like to pose, in front of this group as we start our discussion.

Number one, the question is in front of you. Feel free to respond, on the screen. How are investments in education likely to trend in twenty twenty five compared to what we saw in twenty twenty four?

Team, let us see the responses, if if enough participants have filled it.

Great. I think, there is there is significant level of, you know, sentiment which is positive around equity in the sector. So close to sixty plus percentage people are saying that it'll go up about thirty percent.

Thirty to forty percent, of the audience is is sitting at the fence, at the stage. But but good to see that the overall sentiment looks positive.

We'll close this one, and we'll move to the next one, which is how have, you know, where do you where do we expect, the the investments to go to? So, Majid, if you can move to the next one.

Yeah. Which subsector within education would, in your opinion, see the most investment, as we go into twenty twenty five?

Let us see what the what the group has to say.

Oh, great. So not a not a surprise. I mean, quite a quite a fragmented opinion, just the way the sector behaves, but but clear themes in terms of core education, which is k through twelve higher education early years represent about sixty percent of, you know, of of the total sort of, you know, excitement here, followed by, upscaling, enrichment, transnational.

And, lastly, I mean, good to see that with whatever we saw in EdTech, it seems that, is them you know, the sentiment is coming back up, as we as we see this response.

So great to know that, and we'll be covering some of these themes as we go into the into the session.

And lastly, we covered the overall themes, segments.

Last is in terms of geographies, which markets are you seeing as what markets for education activity and by operators, by investors, as you go into into twenty twenty five?

Team, let us see the responses.

So I think look looks like there's a overwhelming response towards Southeast Asia, South Asia.

East Asia, given given China still, is is not fully open, but Japan and South Korea are seeing activity, follows, East Asia follows Southeast Asia and India, and, and and probably then a n z. Now we understand that this could also be purely a function of the representation within within this group as we as we as we join the session today.

Great. So I think I think with that with that pulse check, let us let us move into the session. And before we before we zoom into what happened into our into the APAC region, important to recognize that twenty twenty four did witness, large transactions in education when we look at the global education sector. So you saw, k twelve platforms like Nord Anglia, Gems, Global Educate, Middle Edge, raising raising capital.

Higher education, is a scale is a scale sector, and, it saw it saw a few large deals closer to home. KKR invested in Fin My Education.

Other deals did happen in in tutoring and enrichment segments, and and also potentially in EdTech. I think, one point to note here is that a lot of EdTech sentiment is probably shifting more towards b to b models where there's greater demonstration of profitability, particularly models like Instructure where KKR invested and Compass Education and headquarter, Australia headquarter business, where where EQT, invested.

So so all in all all in all, a good sector good good year for the sector from a from a overall deal perspective.

If you look at, you know, on this chart, what we see is, is that the is the capital deployed across, across all disclosed transactions. Now there's limitation. This may not be exhaustive, but this is a this is a good enough, indicator of, relative, activity in the sector. So few points to note. I think, you know, in twenty twenty four, the sector saw close to, six and a half billion dollar deployed in, in in education in the region.

And and more importantly, while this deployment was high, it represents a consistent, year on year, two year growth, pre from the pre COVID levels that were there. So, you know, four point three billion investment that we saw in nineteen and twenty. It is a significant upward trajectory.

And, and, you know, while we are presenting these numbers in aggregate, point point to note for for investors and operators is that, given given the sector, the the you know, while there is widespread activity, sometimes these, these trends get impacted by one or two large transactions that happen in in in, you know, some segment or in some part of the, of the market. So that also that also affects it. But despite the case, we we do expect this trend to continue going forward. And, and and as we see that the deal activity has not really, jumped up, you know, after COVID, We do see that, you know, several Asia focused funds who are sitting on an unallocated capital, and they would, they would they would look to to deploy capital as as local and regional businesses also gain gain scale.

With that with that, let us let us peel the onion further and see where the where the investment activity has been. So Southeast Southeast Asia and India attracted about ninety percent of the capital deployed in in in two thousand twenty four. And, India continues to be, to be to be on a growth path, close to ten x growth if we compare our long term trajectory from twenty seventeen to twenty twenty four. Southeast Asia, in fact, saw its biggest, year, from a deal value perspective.

And, while there's widespread participation, there was a there was a large particularly large deal in in Japan's enrichment and adult skilling sector, which also influenced that move.

And and we expect that, you know, twenty twenty five will be a further acceleration with, with scale education assets being, being transacted, as investors look into into Southeast Asia and India region.

In terms of segments, clearly, a core segment, which here is defined as early years, k through twelve, and, and higher education continues to be an attractive sector. More activity, more deal activity has happened as we move from twenty three to twenty four. And, this is again not just in traditional, you know, spaces, but also in, student financing, which which is a part of it, which enables higher education particularly in twenty two four, the higher education segment, you see the blip particularly on account of that.

But but I think on the core education, k twelve activity we have seen consistently over the years, but last year also saw higher education, scaling up and becoming prominent in terms of deal activity.

On the on the right hand side chart, we see that supplementary education. Twenty twenty one was a was an, you know, an year of bump on transactions driven by the EdTech, EdTech momentum, which has stabilized since then. And, and as we see, it is it is stable, but yet sizable.

And more and more, you know, activity here is in the brick and mortar or or or or segments or models which are which are not necessarily driven by, b to c at tech, but potentially more by b to b b to b at tech.

So I think I think, as we as we look forward, the the macro outlook for the region that we are tracking remains positive, and this will, this will this will fuel, growth going forward.

And, education education, as we have discussed multiple times, is a is an ultimate consumer good. And what we see here is that the the transact the, you know, the consumer sentiment overall is is quite positive and, which we believe that we'll we'll we'll continue to, see, an increase in spend in private education, and that will fuel fuel our transaction activity as we as we go forward.

And finally, you know, as we see increasingly and and when we when we map Asia, it clearly merges as a as a center of gravity with a large addressable market, low levels of adoption, but yet growing.

Businesses are scaling up, not just global businesses entering, but also local regional businesses, which are which are which are which are sort of, you know, homegrown. And and and regionally, they are scaling. They are achieving hundred million plus scale. And finally, the regulatory regime is is increasingly become positive and open. So all of that means that, you know, the the the geography in the sector, is is continuing to see momentum even going forward.

So so all in all, as we as we rewind twenty twenty four, continued deal momentum, strong activity in core education sector, k twelve higher education, and and which is likely to continue going forward.

And finally, Southeast Asia, India remain attractive in deep markets where, where investors will keep looking for for scale assets in the region.

With that, we move to the next section of the of the webinar today, which is, which which talks a little bit more about what are the themes that we at LEK are are are backing.

So these are the five themes that you see. Very quickly, k twelve, remains good as gold. We expect more activity in twenty twenty five.

While while a large large part of activity in the last five to seven years has been in k twelve, We think that the next decade will belong to higher education, and we will see rise of, higher education platforms with more buy and build strategy.

Number three, transnational education.

Demand demand sides remain strong, but supply is constrained, and that will give rise to new business models which we'll talk about. Number four, upskilling, strong strong labor market demand and, you know, skill gaps means that there are strong tailwinds from a demand side, demand side perspective, and and few business models are emerging, with which are demonstrating economic viability too. And finally, the elephant in the room in every conversation for education is around AI, and and EdTech has sort of, you know, been replaced by AI. And and we'll talk about how AI is seeing adoption and, and what is emerging from from that corner of the of the sector.

So with that, I and my colleagues will deep dive into into each of these themes. So we'll start with k twelve. So, I mean, k twelve, good as gold sector continues to show, strong enrollment growth. And on the on the top of enrollment growth, there is a fee growth. So we are talking about sec segments which are, you know, at market level growing at about eight percent, beyond seven to eight percent. And then if you're if you're operators or investors backing businesses, which are which are which are which are stellar businesses winning share in the market, you are easily talking about ten to fifteen percent of revenue growth in some of these some of these k twelve, assets.

If we if we move on, what is what is interesting is that in in large part, this activity is being fueled by, by by locals participating local households, participating into international education, mid price premium bilingual education, and and that segment is also driving growth. Now why why that is important is that is a more resilient part of the demand, as opposed to expatriate demand, which happens to be large in markets like Singapore, predominantly that.

But but it is it is it is often, not fully insulated by geopolitical changes or or or restrictions around, around around mobility. So, so so more and more locals dominated segments, and, and this means that rising middle class is increasingly preferring high quality private education, international education, which is, which is which is, certainly outcomes oriented.

And there are there are two ways investors are accessing this opportunity. Right? At the at the premium end, we see, continued interest from British school brands, the likes of Brighton, King's Wimbledon, NLCS, Dulwich, and continue to go deeper into newer Asia markets and, and and creating scale propositions, scale individual schools.

And and investors are participating in backing some of these, some of these operators who are bringing in foreign foreign brands.

So that that trend, which started about, about seven to eight years, ten years back in China, is finally, is finally picking up a lot of momentum in in Southeast Asia.

And then the other way that this opportunity is being accessed is that while premium segment is is, is scale, you know, has has favorable economics, The the mid price of the mass premium segment is also, becoming large. There is there is scale and and and growth in that segment, particularly with larger addressable market that one can tap, operating into this segment.

And and what is interesting is that, if you move to the next page, there are there are regional, regionally headquartered platforms in k twelve, which are, which are which are scaling up and, which have become fifteen to twenty plus school platforms and, and would become available potentially for investors as they look to participate into the mass premium segment of of education.

So that's, that's our view on on k twelve. We'll move to the next theme, and I I'll invite, CJ to talk, talk a little bit about those.

Yeah. Thanks, Sudip, and, really excited to be meeting, this interesting set of participants.

So after after the k twelve team, right, which Sudip mentioned, we had already gained strongly back and we consider it as good as gold. Another sector that we are very buoyant about is the higher education sector. I mean, that is something that also came up in in the poll that we had at the beginning of this webinar.

Interestingly, if you look at, one of the key pieces that we have at EK, as countries are driving the GDP growth rate, as we see the GDP growth rate get accelerated across emerging markets, one of the key drivers or enablers for them is the participation in the higher higher education growth rate. So we call that a gross enrollment ratio. So so clearly, as we see the entire market of the entire spectrum of the APAC market, right, be it China, Indonesia, Vietnam, India, And we see continued buoyant growth, especially in in these Southeast Asian or Southeast Asian economies.

We will see higher education or tertiary education growth being as a key in hand of that. And that is a strong thesis.

There's almost a sixty one percent correlation between the GDP growth rates and the increase in tertiary, GERS across most countries.

As we move on and and that actually, plays out across most of the markets that we see across Southeast Asia. So what we see interestingly across the spectrum here is that we have seen, private higher education grow quite rapidly in some of the buoyant economies. So Vietnam has seen an eleven percent growth rate.

Malaysia, which which has been one of the, one of the north stars when it comes to private education, has also seen a three percent growth rate, but it is at a stable enrollment levels. But Philippines is another interesting market where we've seen a nine percent growth rate. So all in all, if you look at the entire canvas, right, of the Southeast Asian economies, there is a a strong proliferation of private higher education, but backed by strong growth rates. And there is sufficient, headroom for growth across the board. And what is very interesting is I would like to draw your attention to the dashboard where, there there is a reasonable scale of higher education enrollments across most of these markets. So there is a sizable opportunity that you can back as an investor across these markets.

And and that is that is what we are seeing in terms of the at least in the last year or the last couple of years, we have seen KKR acquire Fin My Education.

I mean, there are investors and financial sponsors that are having the buy and build approach. Fin My Education or the Equest transaction, which has a proportion of, tertiary education institutes or TPG's investment in APU and IMU are are interesting deals in the last couple of years that have moved in this direction.

But we are also looking at global platforms, which are private equity backed, and that include the likes of Galileo, Global University Systems, and Hope Education that have invested quite actively, in the region, right, being in South Asia or, in China. And the reason why these are very interesting assets to look at is if you look at the left hand side chart, the scale the revenue scale of of these institutions ranges from sixty million dollars to a hundred and twenty million dollars. So these are very sizable assets which make it a very interesting player from a buy and build approach. I mean, these could be strong beachheads where you can then use to either extend the new disciplines or even use them as the anchor assets to build, further branches in other cities or other branches within the same city too.

So, I mean, the other interesting mega team even within tertiary education is beyond the buying world strategy is, tapping into the international student mobility bandwagon. Now this as a and and this is a very interesting analysis. Of course, we saw that dip. But even if you look at the long term average, right, from twenty fifteen to twenty twenty four, we have seen one trend continuing on a year on year basis, which is the trend of international student mobility.

So if you look at of which India and China now are the biggest contributor. Right? And they have been driving a lot of the growth. But even on a ten year standpoint, we've seen this trend grow from five million students to seven million students in twenty twenty four.

You, of course, see you saw some dip in the COVID years because of the embargo on international student mobility. But even after that, we have seen levels which have exceeded the levels that were witnessed pre COVID. So clearly, this is a trend and this is a trend that we as an EKF firm believers in as it expected to continue.

And and while, traditionally, if you look at the chart on the left, the Anglophone destinations have been the key recipients and they've seen they've continued seeing record levels of of international students.

Clearly, if you look at this the all the four key destination countries, the Anglophone destination countries, there are recent regulatory developments which will impact the continued student influence to some of these countries. Right? UK, has had stringent policies, high visa detection rate, around post study work rights. Also, there are some challenges there. Canada has in twenty four to twenty six capped the overall TNE promise that has really had a big jolt from a international student mobility standpoint.

I mean, UK is something that we saw as stringent work work rights. So in the case in Australia, and we are already in the Trump era in the US. Right? So there is always that continued, dilemma that students would face, be the be the post study work.

Right? Finally, be the detection rates there. So so, clearly, you see a very buoyant student inflow from countries like outflow from countries like China and India. You do see regulatory challenges across the key anglophone countries and which is where we see a very strong emergence of new regional destinations across Asia and Europe.

So you you see markets like Thailand, Taiwan, Singapore. Sorry. If you could remain on the previous slide, please.

South Korea and Malaysia continued, attracting international students. And, of course, you see a new set of markets within Europe like Germany, Spain, France, Netherlands, and Ireland that do benefit from such tailwinds in terms of the international student flow.

So if you, if you could move to the next slide, please, Subhash.

So all in all, I mean, what the the key point around our international student mobility trends is that APAC does remain, is emerging as an alternative destination for Chinese students. Chinese students and Indian students are the biggest two student cohorts. They continue continue to drive growth, and that could be another interesting mega team to back as an investor as to how do we have a value proposition that does not only focus on local students, but it also has the ability to tap into the international students there.

And and this trend is is is playing out, and and the most recent beneficiary is the Indian subcontinent where there are announcements of foreign branch campuses setting up shop in across various markets within India. So you have the likes of Southampton, Lancaster, Subway, you know, City of Wollongong that are looking at, I mean, they have already started their process of building out their branch campus.

And China had already seen this trend historically, but we now see, in addition to the Indian subcontinent, this trend play out in markets like Indonesia, where in the recent time frame, you had the Deakin University campus or the Monash University campus, and Vietnam, play out. While this trend is continued seeing continued growth in markets like Malaysia and Singapore, which have had, these branch campuses exist over the last five to ten years too.

So moving on beyond the higher education mega team, I think the next mega team that that we that Surib spoke about is the demand and upskilling sector. Right? And this is the chart on the left is very interesting where you see a five x growth in the projected, number of workforce with digital skills and APAC. Right?

And so they were on almost hundred and fifty thousand professionals, and that is expected to be around seven hundred thousand to eight hundred thousand in twenty twenty five. And and the usual suspects are the focus on data analyst, artificial intelligence, and machine learning specialist, big data specialist. Right? So so clearly clearly in addition to the conventional tertiary education sectors, upskilling is a team that has really, caught the fancy of a lot of investors.

And one of the key reasons for this is the, clear projected increase in in the workforce and backed by a strong, increase in terms of the expenditure that we see globally, right, on on training. So you would expect you're seeing that grow from two hundred and seventy one billion globally, and that has almost doubled to almost four hundred and ninety billion in twenty twenty four. You are seeing a flurry of operators that are focusing on, on on this bandwagon like like so Go one, iTrain, Edex, Iversa, provider like UpGrad and Coursera that do also have a b to b component in addition to a strong b to c component that they do focus on.

Moving on, if if you move on to slide twenty seven, please, Subhash.

I mean, the other interesting model that we see within upscaling is, is the new age models, which are often tech enabled, are trying to tap into the increased demand for upscaling. While while they have achieved the scale from a volume standpoint, I think we we are yet to see a sustainable profitable, model being developed, and some of these companies are yet on their pathway to profitability.

But what is also interesting is traditional universities are also focusing on this. So you have the likes of UNITA focusing on nano degrees or micro credentialing. You have Purdue that is also focusing on boot camps and, and and the likes of NUS that are doing sports.

So this is a the the trend clearly continues. There is demand across a lot of these upscaling mega teams. I think the only interesting bit from an investor standpoint is how's how profitable are these models even at large scales that some of these have achieved at this point in time.

So with this, I will, request my colleague Subhash to take us through the last team around, technology and artificial intelligence.

Thank you, CJ. Thank you, everyone, for taking your time. So let's address the buzzword of the year, which is AI.

Even though the space is evolving significantly, there are certain teams which are clearly emerging, both from the use case perspective and also from the overall impact that AI can have on education.

If you look at impact, it can be broadly structured into cost access and quality. Access also links to, the kind of revenue diversification and revenue enhancement that you can achieve. If you look at revenue enhancement, it's more around the kind of tools that can be provided to students, and lot of the organizations are cross selling these tools to the students to enhance their overall revenue streams. But it also is helping the students in better academic quality, primarily linked through the personalization and the collaboration that is being generated through the specific mechanisms that are being built in by the organizations itself. Now from a cost efficiencies perspective, it's more from the educator angle that we need to consider this.

Lot of the AI tools are helping educators develop their own content and show that there is strong stakeholder engagement and also is saving time from an admin, aspect that that a lot of the educators have to spend time on.

So all of these put together are creating an overall strong value within the ecosystem and is acting as an enabler in terms of not only delivering high quality education, but also at a relatively lower price point, which will benefit all the stakeholders put together.

Now if we extend this argument as a case study at an institutional level, we are looking at k twelve schools, and broadly integration of AI can be considered as three vectors.

The first one is from the tools perspective itself. And even over here, there are different ways in which AI can be integrated within the overall ecosystem. It can go as basic as just supporting in terms of data analytics. And at the other end of the spectrum, it can become more predictive so that you can ensure that there are the required interventions in ensuring personalized learning for students and also identify at least students at an earlier stage to provide the required support.

The second vector is linked to the overall AI and curriculum aspect, and this is where you can again play around in terms of the level of integration that you can have within the curriculum.

The basic level would be just ensuring that students have the required literacy to ensure that they can use AI in an effective manner.

The second nuance could be AI integration within the curriculum as an elective. And then finally, a fully integrated model, in which AI is integrated across all the levels of the educational value chain or ecosystem, so that it becomes, a fully, available aspect not only for the students, but also for, the teachers and the admin staff.

The last nuance is related to the grade offerings. Broadly, it is more challenging to provide, AI tools to younger students. Whereas if you go up the ladder and specifically in the secondary grades, you can really ensure that the students understand the concepts behind AI, right from machine learning and the use cases of it in in a more nuanced manner so that they can potentially build a career and even pursue, specific courses in their higher education linked to their interest. So these are the three vectors in which k twelve schools can think around AI and ensure that it is well integrated within their overall ecosystem, based on, the the specific stage at which they want to focus on.

So with that, I'll hand over to Sudip to summarize the overall, themes that we have discussed so far.

Thank you, Subhash.

Great. So in summary, what we discussed, the five opportunities remain remain buoyant for the for the next year, and and this is for twenty twenty five and beyond.

K twelve remains good as gold. It's a discretionary education, it it's a nondiscretionary education spend.

Demand is driven by local's participation, Asian expats. The opportunity is being accessed at both ends, premium and by British brands.

And, and at the at the mass premium segment, we see rise of local regional platforms, which are achieving multi hundred million dollar scale, and and presenting investment opportunities for, for investors.

I think the second bit, which we talked about is on higher education.

And, as I said, last decade has seen more of k twelve than higher ed in terms of, pure investor activity.

And, and we see that the the next decade, higher education will will follow.

Some some activity in that segment has already started, but what what what is behind our our confidence in that is, we are sitting at absolute lower end of the of the, you know, gross enrollment ratio versus economic growth curve, which we talked about. And, and and if we are betting on the economic growth, within SEA, within Asia, we are inherently betting on higher education attainment, and and that supply will be provided by private education.

And and, interestingly, I mean, many of the markets still are at twenty, thirty percent of the total, enrollments in private sector, which is which is low and can grow up to fifty, sixty percent like some markets, which which have that level. India, Philippines, particularly are operating at at that level in terms of the share of share of private education.

And, and finally, I mean, you know, higher education also is is a business model which has lot which is highest, single site scalability.

And, you you you see that translating into very high profitability.

So so while while you are sort of, you know, helping, help helping students get into the workforce and employability oriented courses, you're doing it in a very sustainable and profitable way.

Number three, which we talked about is transnational education, and, the demand side is as strong as ever. Right? But borders are closed, so supply is getting constrained.

And with supply getting constrained, either either local higher education has to gain, but more importantly, universities are coming closer home. We talked about, you know, campuses by Deakin, Lancaster in Indonesia, Southampton in India.

And and and there is there is a longer list which is looking to get into, Asian markets.

So that would, that would present opportunities. There are there are private operators, the likes of PSB, British University Vietnam, which are offering, you know, franchise degrees or foreign degrees, in Asia. And what it means is that, you know, an an affordable education and foreign degree is is being made available closer home.

That along with interesting one plus two, one plus three models would mean that, you know, that sector is seeing seeing activity.

Number four, upskilling as a as a segment.

And, you know, as CJ talked about, from a from a labor labor market demand, two sectors actually which which we feel are are ripe for more activity. One is digital skills, with with the rise of, you know, AI, cybersecurity, blockchain, IoT.

That is that is one area with rapidly changing technology will require much more, you know, upscaling.

And the second area where we see the huge, the gap is health care. So, so these two areas remain very high, when it comes to to, you know, demand supply mismatch.

The only thing is that as new models and universities also are taking part are participating in this segment, the the cycle for for this segment is not a four year cycle for students or, you know, eight to twelve year cycles like like eight to twelve. And as a result, businesses need to continuously, have new pipeline of students, new pipeline of courses, and that potentially makes the economic viability not a very straightforward, sort of play in this particular subsegment.

And, and finally, many use cases are emerging for AI. We don't claim to be expert in that, in such a dynamic, area, but we are learning with the sector. And, I think I think the way we are seeing is that successful brick and mortar businesses are embracing AI and finding ways of using AI as an enabler, and they're moving fast on that.

And, and it is not just in, in nonacademic functions where where still there's a there's a there's some good prevalence of technology, but also, more in in academic aspects. And and on a broader basis, how we are thinking about technology is, education companies can use, AI and and technology in three broad ways. One is enhancing the revenue. So either either you are targeting new customer segments or addressing existing customer segments with newer offerings.

Number two, efficiency.

So in terms of unlocking teacher time, in terms of, you know, doing away with with the number of, administrative, sort of, you know, costs. That also, that also is is an angle that technology is playing. And thirdly, it is about bringing bringing up the quality of education. So so AI can enable, more standardization and yet, yet creating a huge, element of, personalization, because, because, you know, as as it caters to needs of students, which are at different capability, different interest, levels.

So so that's where that's where we, you know, we land in terms of, in terms of what we had to present.

We would, welcome, quest q and a, and, and I'll ask my team to open up for us to see what are, what are we seeing, in terms of the questions.

Feel free to reach out to us. One.

Yeah. Yeah. Sorry. Why don't you complete? I think the first one is on the tutoring sector.

Yeah. CJ, you wanna make that?

Yeah. I can say that. So interesting question.

Within Southeast Asia or within the APAN markets in particular, we do see the prevalence of a lot of tutoring formats.

And and some of them have been invested into by financial sponsors and very scale assets. So, I mean, you you see the like of supplementary tutoring formats exist in, single market like Singapore, the likes of TLL, and some of the others that that have attracted investor interest and and have seen strong traction and growth.

Similarly, in Vietnam, you see the pro proliferation of English language, tutoring models, and these have seen a lot of scale.

And, traditionally, these have been brick and mortar models, but they are also interestingly using technology to good effect, both to grow, as well as, to innovate.

They're using technology innovative models not only to proliferate further, but also to increase or better the student experience.

So and, I mean, we see similar models exist also in Indonesia. So all in all, across the APAC markets, this is an exciting thing.

And, one of the biggest deals that we saw in Japan was on a tutoring platform, that was invested into last year.

Yeah. And and, CJ, I see there's a related question that has been raised, which is around, how do PEs scale, tutoring companies that operate in more than one markets in Asia? So so let I'll I'll quickly talk about that as well.

Again, you know, tutoring tutoring tends to be tends to be very localized, because in most parts, it is either related to a to a high stake examination, like the primary school living exam in Singapore, that happens or potentially plus in in China.

So so there is there is a dependency on local curriculum.

We have, having said that, there are the the the modules, the building blocks are are pretty much common. And when we say that, what we mean is, an algebra or a topic in algebra is is is is pretty much same as to what you have in either Singapore or Indonesia.

I think the the the way for platforms to operate is, if they are, let's say, in a high attention market like Singapore where the brands and the and the and the business model can, can receive a brand cache in some of the neighboring markets, Indonesia or Thailand or Malaysia.

So so one one play could be on the on the back of that branding.

And, I think I think on the tech side and and how you design, you know, the the the course curriculum, we don't see that as a very heavy impediment.

But, but but having said that, there have not been, you know, significant examples of businesses which have, which have actually done that.

So, so that would be our view.

The the some of the functionalities like, you know, how do you assess students, how do you, you know, teach them with systematic modules, that level of functionality remains same. But in every local market, you need to win local share given it's a I mean, particularly if you are operating in a brick and mortar type of, type of segment.

But, but but to some extent, technology does the again, can come to, come to bear as providers look to look to achieve scale.

I think there's another question. Sorry. There are quite a few questions. We'll quickly take through some of them. We we I given the time that we have for this webinar, we may not be able to address all of them. But let us stick through the key themes. I think there is a question on the investor landscape for investments into the international k twelve sector.

This, as we mentioned, initially in the conversation, highest proportion of deals that we see are in the core education. Even within that, there is k twelve assets.

Interestingly, the way we see the investment activity play out is there are platforms that are either caught headquartered in Southeast Asia or have a very strong presence in Southeast Asia that that are in the process of fundraising. As we speak, there are a few names, logos of which we have seen through the pack. Interestingly, another trend that we see is a lot of the global school platforms, all regional school platforms are in the process of acquiring a lot of good quality stand alone schools. And and that is a continued theme that we see play out across the markets like Malaysia, like Vietnam, like Indonesia to an extent, but and Thailand too.

And interestingly, even some of these platforms have started looking at South Asia too over the last couple of years. So that as a trend, the investor landscape is a combination of financial sponsor looking at this platform. But a lot of these regional and global platforms looking at assets, within within the entire region. Yeah.

Yeah. Next one moving from k twelve, and and I believe it's a higher education question where, how's the spread of international student flow, from China, India into SEM markets and going who's benefiting the most and why? So as we covered in the presentation, a large part of demand from China prefers going to Singapore, and there are there are businesses like BSB, and others, which which have UK and US degrees being offered in in Singapore.

So so Singapore remains a a good beneficiary.

About forty percent of the students in in businesses that we talked about are international students, and eighty percent of those international students are are probably from China.

Similarly, we are seeing, that flow from China is not just restricted to Singapore, but it has, it is also benefiting Malaysia. In Malaysia, Chinese students remain their top nationality. Malaysia also sees flow from India and, and also Thailand, increasingly with, with with with with bilingual degrees and, and also English programs.

China is emerging as a key source market even for for universities and businesses in in Thailand.

Interestingly, this flow of, international students is not only just restricted to higher education, but we see that playing out even in k twelve, where you see schools in Singapore or Malaysia, Thailand, benefiting significantly from the flow of, you know, Chinese families moving into into these markets solely for the purpose of education because, the provision in China remains constrained because of regulatory dynamics in that in that part of the world.

I think the next up, there is there is, and, you can dig in.

What are what are some potential risk factors Yeah.

That we can see for education investments in SCA?

Yeah. So, I mean, again, as as we saw across the entire team, any stoppages or, like, the COVID kind of an event did have an impact, right, both in terms of student flows slowing down or declining and and, and and the levels coming back. So any sort of macroeconomic shocks, while education is a nondiscretionary spend as we saw, the the ability to either either upgrade or not does get impacted especially for especially in certain segments like supplementary education or others through a macroeconomic shock.

So one is macroeconomic shocks, regulatory shocks where student inflows or outflows do get impacted, as we are seeing. Right? As the Anglophone destinations, have started coping.

These are the lot of the this education businesses that were in the business or in the agency business, which benefited from the flow from these traditional source markets triangle for destination have got impacted.

Right? And that has resulted into the emergence of new alternate destinations. So regulatory risks, macroeconomic risks are the risks that could persist, especially in twenty five and twenty six too in some of these markets.

The next up is, an interesting question on on, about the prospect of UK brands in Japan. Subhash, given given some of our work in Japan, why don't you comment on that?

Yeah. Thank you, Sudeep. And and that's an interesting market. So broadly, you would see that Tokyo is at a relatively higher adoption level, and a lot of British brands have shown interest.

Some of the examples are, let's say, rugby, and then you have also Melbourne College, which have established campuses over here.

There is also potential for boarding over here, and, it's not necessary that you have to establish the campuses near the city center. There is potential to move creatively farther away from there, which is where the real estate angle also comes into picture. And even between, some of the larger cities like between Osaka and Kyoto, there are enough opportunities for us to establish campuses and achieve the required scale.

And at least Tokyo, Osaka become, the two large markets that you can definitely focus on, and this has been demonstrated based on the existing brands which have established campuses there.

But interestingly, in addition to UK brand, which is definitely at the top end of the market, the the affordable brands or the mass premium brands that Sudip spoke about have seen we've seen some of our clients really use that lever, and and Japan was an interesting market. So not only are they tapping into the expatriate flow, they're also looking at local Japanese students there to to ramp up them.

Next up, next up, we have a question coming on.

Yeah. It's an interesting one. I can take that. The question is, how should we think about the impact on k twelve when Western universities are coming to Asia?

Is it is it a plus or a negative?

So, our view is that, you know, as as high quality education and, you know, foreign brands come close at home, they will continue to fuel and stimulate more demand for international education in Asia, as opposed to as opposed to sort of, you know, reducing it. The the reason is that, I mean, as it is, markets like India, China, Southeast Asia are large source markets for foreign education.

But, as they get access to some of it and and it'll be a different customer segments. We are not saying that everybody who goes abroad, you know, stays back now that, you know, there's an option closer home. But, but the segment that we will consume it would still want to do international education, bilingual education.

I think to to address this, this this sort of, you know, dichotomy, there is a segment emerging in in Vietnam where bilingual schools are increasingly offering international track and, which students can choose either at, you know, after their grade ten or or or after sort of, you know, grade six as well.

So which which means that parents can be open to prepare their their their kids for both the local higher education system as well as for the, for for the for for foreign system.

CJ, I think there's an interesting question on what are the prospects and insights on the Saudi market in terms of k twelve and EdTech.

Yeah. So I think that also, we we will plan as a. We have a very strong coverage in the GCC region. We'll plan for a separate webinar there. But to to wait in literally fifteen seconds, it is one of the most exciting sectors in the Saudi market. I in addition to my focus on Southeast Asia, I also focus on education for educate in the GCC.

I mean, there is an expectation of nine hundred to two hundred hundred new schools that will come up in the kingdom. So any one of the hottest sectors in education would be the k twelve sector in the kingdom.

Yeah. There's a there's a very nuanced question around, around Thailand market, where where somebody is asked that there's a lot of supply coming into the Thailand premium market, Dulwich, Highgate, and some of the other schools.

Will it continue to remain a growth market despite low birth rates?

So what we what we are seeing in markets like Thailand, Vietnam is that, and and Thailand is a is a slightly different story in terms of both rates and just the demographic growth.

The growth the growth in the overall segment is not is not coming from demographics, but it is largely, largely coming in from two factors. One, rise in affordability, and second, increasing adoption of, premium education.

Thailand particularly remains a market where families are, give a strong preference to brand and products when they come to the market usually gain share from, you know, other other, other schools.

So so we will we will see that type of trading up or switching happening as, as branded schools come in. And we've already seen the success of, you know, King's, Brighton, Wellington, and and Brighton has recently opened their second campus.

So so to that extent, obviously, we'll have to assess the the demand supply dynamics at catchment levels because cable is all about that.

But but on an overall, there is there is increasing demand and, providers or operators need to calibrate which catchment could give them the right scale of the school.

I think there was similar question around Singapore as well, Sudip. And these are the trends that we have seen even in the pre k and the K-twelve market in Singapore related to premiumization, and that is driving a strong growth in the setting.

Yeah. Sorry, Sujit.

I think there was a few teams.

How do how sustainable do we see the flow of Chinese students? As we mentioned, especially in markets alternate markets like Singapore and Malaysia, we are very buoyant about that demand over the next two years because of the visa restrictions that we see in anglophone countries, and these are seen a very called credible alternates to the Anglophone destinations.

I mean, has Dubai reached saturation point? There was another interesting team.

In Dubai, Indian students in particular also look at Dubai as a very interesting high rate destination.

In fact, we are we are firm believers in that that buoyancy has just started, and and, they will start attracting foreign branch campuses and Dubai will start attracting students even from other Asian source countries like China and Southeast Asia.

Yeah. Maybe we'll we'll take the last question team given we are Mhmm. We are we are we're at the top of the hour. The last question that that I would pick is, is around the risk around education investment.

And while we while we talked about a lot of excitement, there are few areas that remain, that remain challenges for for investors and operators. One is there is there's high level of fragmentation in the sector.

You do see you do see in in markets where there is rapid rapid demand growth. Sometimes supply can come in all of a sudden, and that lowers the utilization of the overall segment.

So that is another one. I think regulatory challenges do remain, but, but by and large, in most of Southeast Asia, APAC, regulations are are friendly, and for profit is allowed, within certain structures.

India and Indonesia are exceptions, but but barring that, we see very favorable, sort of regulation and acknowledgment that private private education is here to stay, and it offers complimentary solution to what public system is offering.

Yeah. And then I think many operators do talk about talent increasingly becoming a challenge, both at the management level as well as at the at the academic teacher teacher quality level. So so probably those all this also gives rise to an opportunity around teacher training and, you know, some models which help develop, the right talent for the for education as a sector.

Great. Apologies, team. We we will have to, you know, end this, end the webinar here, but, thank you for all the engaging questions that you've had.

You have you have our our email addresses here. Do not hesitate to reach out, and we would love to have one on one conversations.

Thank you. Thank you.

Thank you.