Education: 2023 APAC Deal Round up and Themes for 2024

Great. Let's get started. Thank you, everyone. Those who have joined today, good morning, good afternoon, good evening, depending on which time zone you're joining from.

Today on this webinar, we are about close to two hundred people who have joined from across the globe and who have interest in the education sector and the opportunity it presents.

Participants on this webinar include operators, investors, educators, and certainly also advisers.

Just a just a little bit a little bit of a history of this webinar. We started doing our first webinar, the deal roundup and and outlook way back in twenty twenty, right, during COVID. And we we did receive a lot of interest and and love, which we are which we are quite thankful about. And this got us this got us going to make this sort of an annual ritual, and we hope to continue this in in future.

As we start, a quick introduction. Most many of you actually know me. So my name is Sudeep Laad. I'm a partner in LEK's Global Education Practice.

I co lead our work in the APAC region along with my fellow partner, Anip Sharma, who is with us here today. We are also joined by Subhash Kunje, who is a senior manager in our education practice.

We are going to be your host for for today.

Quick logistical announcements. We'll be recording this event. And while we have a limited set for limited time set aside for q and a, this is a this is a power packed kind of a session and setting, but we encourage participants to reach out to us via email, and we would love to engage in one on one conversations on topics of your interest.

Great. With that, let's let's dive into it. So we will we have two sections, for the call today.

First, we'll be talking about the deal activity in twenty twenty three and how it compares to what we've seen in the past.

Then we'll move on and talk about what are the themes we at LEK's Global Education Practice are backing for twenty twenty four.

And as always, before we start, just a quick pulse check and just to garner the current sentiment of the group around education opportunities and what they are seeing in their respective fields. There are a couple of poll questions which we which we will which we will pop up on your screen. We request participants to answer and and inform their sentiment as they as they feel about opportunities in education today.

Team, could you could we get the the  question on the on the screen? The first one is around 2024 investment outlook. How do we see investments in education likely to trend in twenty twenty four compared to what we've seen in the last one year?

Great. Team, can you launch the the the results?

Oh, great. So it seems the group is reasonably upbeat about what the sector has to offer.

About fifty eight percent, close to sixty percent think that the activity will be up from last year.

About ten percent of people are overwhelmed about how education will look like in the next year.

Yeah, I think there are a few people in the group who are kind of naysayers or realists as they would like it to be interpreted.

So good, but good to see a reasonable level of optimism in the group. We'll move to the next poll question, which is about the view on subsectors of of education.

And here, if you launch the survey, which education subsector is likely to attract the most investment in twenty twenty four?

It goes from, you know, pre k to gray, as we call it, early years, higher education, edtech. So feel free to add your response here.

Great. So it is good to see. I think the responses are reasonably fragmented, but we can certainly see that between K-12and higher education, cover about fifty percent thereabouts, earlier included, which is the core education sector.

And there is there is good deal of optimism around that.

I think international education falls quite quite close there.

And good to see that EdTech, despite the funding winter that we've seen over the last twelve to eighteen months, is still not completely out of the favor as we look at these results.

So so good to good to see what the group feels about, you know, the outlook as well as which segments are they kind of betting on.

Yeah. Maybe with that, let's move on to how we see and how we have sort of, you know, looked at the market and what twenty twenty three from our lens looked like. So the chart on your screen is about data on deal value of disclosed transactions in the education sector.

We saw that in twenty twenty three, there were investments of closer to eight point four billion in total value.

It's a sizable amount of investment in the sector.

Twenty twenty two was a low year after two years of high COVID high, which we saw in twenty and twenty one.

But more importantly, I think I think so so certainly twenty twenty three was higher than twenty twenty two, but but we also see that in twenty twenty three, the number has reached suddenly at least closer to pre COVID levels.

And and and I think I think we believe that while the aggregate numbers are up thirty, forty, fifty percent, the way you look at it, the deal activity still has been has been relatively patchy. So a couple of big deals take take a good share of this investment volume that we have that we have projected here.

So noting that we expect this momentum to to continue in 2024 on a more widespread basis.

And and and the reason for this conviction is that as deal flow has been relatively subdued over the last couple of years, there are several Asia focused funds who are sitting on unallocated capital, they would look they would look to deploy it in high quality assets.

So great. I think with with with good momentum of deal activity, let's peel the onion further and see where where have these investments taken place in terms of geography and also in terms of subsectors.

So no surprises there. This is the same data. Of course, China is excluded from this one in the in the APAC region, split by the countries, the markets where the investments have happened. So India and Southeast East Asia attracted lion's share of investments, as we can see, together accounting for close to eighty percent.

India, India accounted for closer to forty five, fifty percent.

Southeast Asia, East Asia, which includes Japan, accounted for nearly nearly forty percent.

Couple of couple of key points to note about these two markets where which have garnered a lion's share of investments. India continued on a high growth trajectory with investments kind of growing multifold.

You know, if we compare from twenty seventeen, the growth is about eight to ten x.

Southeast East Asia also reached its pinnacle year, though it was led by one mega deal in the market, which influences. But even outside of that, you can see on the chart, the logos of few deals, which are contributing to this trend in Southeast Asia.

And we believe twenty twenty four, this trend is likely to be accelerated with more scale education assets transacting in India as well as in Southeast Asia.

And this is the sectoral story, the same story as viewed from the lens of sector.

So core education sectors, which you have on the left hand side in this page, core sectors have seen an increase in deal activity, a significant surge. And this kind of demonstrates the nondiscretionary nature of core education products. The way we define core education is K-12, higher education, of course, pre care leaders embedded within that, largely the brick and mortar businesses, but also cover some services which are around K-12 or higher education, such as financing.

And then on the right, you see supplementary education where deal activity has been sizable, but it has not seen that acceleration.

And part of this, this is partly linked to the slowdown we saw in EdTech investments because EdTech investments happened largely in the supplementary education segments. And and if we see the twenty twenty three data supplementary education investments, the portion of those which were tech oriented, tech led has reduced. And that kind of also explains why investments in that segment itself have seen have seen a little bit of a little bit of a of a dip or stabilization for sure.

And then, going forward, what do we what do we believe? So the long term outlook for the region is is is strong. We can see how the economic growth in the region is higher than the world economy as a whole.

Stabilising interest rates will certainly drive more transactions as investors look to deploy capital in high quality assets.

If we if we specifically talk about education, so education is an ultimate consumer good as we've been as we as we've been telling.

And consumer sentiment is positive in most of the Asian economies and which will drive consumer spend in education and ultimately lead to tailwinds for the sector as a whole.

So all in all, just a quick recap of what twenty twenty three saw.

Suddenly, activities crossed pre COVID levels.

More deployment is expected in twenty twenty four, particularly in core education sectors. India and Southeast East Asia drove a large part of that investment and will continue to be high on radar as scale assets come for for transactions, in the next six to eight to twelve months.

Now on the next section, we talk about what are the key themes we back on the back of what we've seen in twenty twenty three, and there's a momentum building towards twenty twenty four. So from a thematic point of view, these are the five themes we are we are backing and betting on. Number one, poor education remains good as a gold sector.

Strong demand in transnational education, international student mobility. Upskilling is very high on agenda for economies, fostering, you know, labor scalable market skills.

EdTech investment activities subdued, but strong use cases in supplementary and hybrid models.

And number five, from a source market from a from a market perspective, a deal of markets deal, you know, where assets will will will will will get scale and find transactions.

There'll be there'll be a big push, and all eyes will be on India as a market.

We'll we'll deep dive into each one of these and give you a little bit of a snippet on what is driving our our conviction around these five themes.

So core education sector, which is, you know, your brick and mortar k twelve, higher education institutions, are showing strong growth trajectory. The data on this chart is enrollment growth in international K-twelve schools in two or three Asian markets here.

Growth is trending upwards of four percent, five percent. If you couple this with the fee growth, market as a whole is talking about revenue growth in the digit range, close to eight percent, ten twelve percent.

And I think while this is the trend in the overall market, this also plays out to a greater extent on few segments, be it the premium segment, the mid market segment, and and and others. And I think one point to note is that now for core sector, we are past the COVID conversation.

So, you know, full recovery has long happened.

Pre COVID normal growth rates have subsumed in in this segment of education.

And what is driving this? So demand in this segment is driven by accelerated participation from locals as well as Asian expats, which are which are growing at a higher growth rate than expats. So if you look at Vietnam, the segments around premium bilingual, even within international segment, international school segment, locals are growing at a faster rate than than expats.

While on the other hand, if you look at even markets, high attention markets like Singapore, which are seeing good growth, again, there the flow the flow is the demand is driven by Asian expats, certainly including Chinese demand from China Chinese population.

And Bangkok data that you see in the in the center also tells a similar story where locals are increasingly adopting international curriculum and driving the growth in the segment.

The second sub theme in the core sector is about increasing interest from global brands towards Southeast Asia.

And British Independent Schools, the data for which we have shown here, they they are good reference point here.

We we we saw that pre twenty twenty, a lot of focus from British school brands was in China, but post twenty twenty, due to regulatory reasons and other demand related reasons, the focus shifted towards Southeast Asia, and there have been announcements and entry of operators in Vietnam, Thailand, Cambodia, Indonesia, Malaysia.

So for investors out there in this panel, British school brands, you know, serve as a good opportunity to access the core education, the core k twelve education market opportunity at the absolute premium end of the market.

And, and I think, on core, while we have seen a lot of activity in in core segment happening in the premium sectors segment or premium school segment, largely led by global k twelve platforms, we do see a rise of value for money segment.

And as you can see in this chart, the ones which are highlighted in red are the segments which are value segments, which are, either sizable or fast growing or both.

And, and and we see that, the next wave of, of investments and activity in this segment would also be around this segment and companies owned by local operators, investors will achieve scale and present investment opportunity for investors.

And while we used, you know, for for bulk of our core sector conversation, we used K to K to twelve, but similar opportunity exists in higher ed with with sort of, you know, strong demand story here driven by access, driven by quality.

And certainly from an investing point of view, significant white space exists in this space compared to, you know, K-twelve for platform building. And that's one element where K-twelve has moved progressively more ahead, but higher ed would see next wave around platform building.

Practically, there are no Asia focused, Asia wide higher education platform at the moment.

Moving on, the second theme is around international student mobility, and it continues to show a very strong demand. COVID saw a blip, but post that, there has been a very strong recovery.

And and and the story is also from a source market perspective driven by Asia.

And within that, India is India continues to be the fastest growing source market. And I think while this demand for our transnational international education is being served by students going abroad, There is also momentum around bringing foreign education back home, either in the form of foundation programs or even foreign branch campuses with few announcements in Indonesia, Malaysia, India, of Australian universities expanding campuses.

This segment is not free from regulatory changes, and these tend to be transient in nature.

Recent constraints in Canada, UK, Australia with caps on student permits do do do present do present a slight bump, you know, on the road. But but but we believe that this is transient and the long term demand drivers are as strong.

Alternate destination markets also have an opportunity.

So US, which is which is which is certainly the most popular destination market, has more to offer. And in a situation where things in Canada, UK, Australia become, you know, the remain the way they are. It presents opportunities there. And then and then increasingly, this demand is also now tapped into regional markets, be it Southeast Asia, be it European markets, where some of the regional destinations are gaining popularity.

So I think associated with this trend, this megatrend of global mobility, there will be models and there'll be boost to demand in the models which are across the entire value chain from university search, application guidance, counseling, foundation programs, and even even post enrollment, things like, you know, travel, finance, accommodation, and even employment opportunities.

So it's a big segment presenting opportunities out there.

For the third theme, I would invite my colleague, Subhash, to shed light as we go through the third and the fourth theme. Subhash?

Thank you, Sudeep, and thank you for talking about higher education. That gives us a good segue into what we are going to talk about, a sector where we are very optimistic. There is huge demand for upskilling, primarily because it fosters economic growth and there is labor market alignment that is required. But the fundamental driver of the sector itself is the skills gap, and there are two areas which have outsized skill gap, based on the data that we are showing on the slide. The first one is around digital skills.

As the adoption of digital increases, which is around AI, blockchain, IoT, data science, or even digital marketing, and all of these skill sets are currently being leveraged across the economy wide subsectors or trends. It's not limited to any one particular area which is driving the outsized demand for these kids. In addition to that, the other angle is around health care professionals. Broadly, what you will see in Southeast Asian markets is that the number of health care professionals per capita are significantly lower compared to some of the benchmarks that are published by global organizations. In addition to that, a lot of these markets do outsource these professionals in the sense that developed economies are aging. So let's say, the nursing population from Philippines, Vietnam, Malaysia is also traveling to these developed markets, so the local demand will continue to increase.

So how can we tap into this demand and build, a nice business model around the same to address the needs of the market?

So a lot of new age tech enabled models have appeared in the market. They come in different forms and sizes, and what you will see is that tech first providers have tapped into this opportunity post, including, let's say, professional certificate providers where they're also collaborating with industry bodies to ensure that the credibility of the courses that they are providing is extremely strong in the market and aligned with the industry trends.

The other sort of providers like Keypath, Upgrad collaborate with universities to ensure the credibility of their offerings and again ensure that the needs of the learners are met. But what this kind of leads us to is that the universities or typical or traditional higher education institutions are tapping into this demand quite well and in a very meaningful way, either through partnerships, which are through either forms like Upgrad or Keepout or on their own, which is like Arizona State University or Southern New Hampshire University in which they are offering these online courses directly.

So all in all, the demand is huge, and to ensure that the demand is tapped into by the providers, It's not necessary that it's limited to just tech enabled or tech first operators. Universities and traditional higher education institutions can also cater to this demand. The other final nuance is that even though there is huge demand, the market is significantly fragmented. So there is huge upside potential to leverage technology to ensure scalability of these models, and, the technology that we are talking about might not be limited to, just use of AR or VR, which is extremely useful in, let's say, upscaling for healthcare professionals, but also use of AI to ensure that, the scalability of these models is extremely high.

However, success needs to be demonstrated. So not only operators, but also investors have to roll their sleeves up and get into the core operations to deliver success within these.

Now let's talk about the other theme, which is quite interesting. I think you have now seen the data for twenty twenty two and twenty twenty three, which broadly demonstrates that EdTech has fallen out of favor. And now since you have seen the data, it would be good to get your view on, the potential for twenty twenty four in the sector and to see whether the sentiment is broadly going to stabilize or you think that it will further decrease before it rises again?

Oh, broadly, the sentiment seems to be very positive, in line with what we had seen earlier, where almost twenty five percent of the participants did choose EdTech. So this is a clear rebound story that we are seeing, in twenty twenty four, and that gives us quite an optimistic view of where the sector is headed. But at the same time, there is cautious optimism, as you will see that almost forty percent of the people still, are are having a relatively lower appetite to invest and rightly so. So let us deep dive into where the story for EdTech kind of leads us to.

So this slide broadly tells us the story of EdTech falling out of favor. We have used this as an indicator metric where we compare the performance of, listed EdTech providers in the market. Of course, the story is a bit colored with, the China regulatory impact, but you will still see that a lot of the ed tech operators have underperformed, and the data justifies, this trend, right from twenty twenty two to twenty twenty three as well.

But it's not negative story all throughout.

As you will see that there are certain use cases for EdTech which have gained significant traction, specifically in the supplementary education space, which include your tutoring and test prep and language training.

And a lot of these operators have gained lot of investor interest as well as you will see in terms of the deal value from twenty seventeen to twenty twenty three. Of course, we are not including upskilling in this case considering we have talked about it earlier.

In addition to that, there is a significant rise of education service companies of the likes of Education Horizons, PowerSchool, which are supporting your core sector, and this brings us quite well into your next theme, which is talking about the era of digital, which is where brick and mortar models are adopting technology, and they have figured out specific use cases where or use cases across the operational chain where EdTech can add a lot of value.

And we can look at it across the various key sectors. For example, in k twelve education, you will see that there is growth in blended learning with the use of LMS platforms.

Online teaching and assessment has gained a lot of traction. There are personalized learning services that are being provided to k twelve operators.

And the same goes with higher education as well, where blended learning has given a lot of flexibility. And even post COVID, you will see a lot of operators are still relying on hybrid learning or blended learning models to deliver high quality outcomes for students. And at the same time, there is also a way to structure the programs for students so that it meets their end goals and provides them the right employment opportunities as well. And this is being done not only in in the Asian markets, but also globally.

And finally, even in the enrichment space, you will see that there is a demand to reach out to a wider audience segment, not limited to just the urban centers, but also in relatively remote areas. And that is where EdTech has has played a significant demand, driving position in itself over to you, Subi.

Great. I think I think the EdTech conversation would be incomplete if we don't touch upon artificial intelligence and where we see the use cases. So certainly, we are we are learning with the with the sector and with how things are building. So we claim to be no experts on that.

But some perspective to offer here. Right? Clearly, technological changes are faster than one can one can predict.

ChadGPT itself has probably, you know, been twenty, thirty times faster in terms of achieving its reach and which does indicate that, you know, technology changes things faster than one can imagine.

We believe that promise of artificial intelligence in education is around two or three areas. One is, you know, creating intelligent content, differentiated instructions for for for students.

Assessments can be improved significantly. And finally, elements of elements of personalization.

And I think solutions that use technology as the back end and and whatever solutions like ChatGPT have to offer at the back end, but design products around it. And Conamigo by Khan Academy is a product in that direction, which uses ChatGPT to create guided tutoring and guided usage for students, wherein it is not revealing answer to the student, but rather building the the inquisitiveness and the questioning to get to the answer. Similarly, I think I think a good great use case for educators. So solution such as the one you see in the in the middle is around helping teachers create intelligent lesson plans, knowing the the level of the the level of the class, and and then sort of, you know, designing modules and guiding on what modules to cover and where to put emphasis on.

So I think I think solutions that use core technology as their back end, but wrap it around in a in a way that it is it is it appeals or it speaks to all the stakeholders, be it students, parents, or educators, is probably the direction AI will will take.

And and I think on the broader basis, our our house view of role of technology in education remains around, you know, value add in these three domains. So you could education businesses can can look to enhance their revenue, you know, in terms of existing operations.

There could be there could be ancillary revenues around tutoring enrichment, which can which can be offered in a in a tech enabled way.

And then and then obviously, you know, the in the spectrum, it goes all the way up to online schools wherein, you know, a new customer segment can be tapped into, which is currently not using, you know, the product and services of operators.

Similarly, I think on cost efficiency where student retention is a big is a big conversation in certainly in higher ed, but also also to some extent in in in in k twelve, where technology can be used to identify at risk students and then device support solutions around that.

And then and then teacher productivity in form of, you know, scheduling efficiency optimization or even helping them with assessments is an area where technology is increasingly finding its use. And the last element is is around quality. While there's a the good great deal about of efficiency around technology, even quality standardization and even personalization are elements which can improve quality and reduce teacher dependence on teacher variability to a good extent.

With that, we move to our last theme, which is around which is around opportunities in India. And India will remain to be high on the map of of Asia and and probably also on the global map.

Investments in India in it in technology sorry, in education have already surpassed what we saw in China.

In fact, in recent year, the investments in India are significantly ahead.

The fundamental drivers of demand remain, which is around huge addressable market.

Price points for education businesses was a huge constraint for a long time. But with upwardly mobile middle class and and broader economic growth, it is it is leading to, you know, greater willingness to and spend towards education.

And that is that is transforming into scale platforms, which are built locally, you know, be it in the k twelve segment or even in other segments. Local locally, you know, grown platforms, homegrown platforms are achieving scale.

And and looking at that, looking at fundamental growth drivers, there is also interest from foreign brands in the market, be it about British school brands in the k twelve segment or about, you know, universities entering in the in the higher education space.

And all of this is supported by policy regime, which is which is increasingly favorable and allowing for new models to come in, of course, with certain guards around quality. And India could continue to see potentially another wave of that, you know, quasi liberalization, which fuels scale and demand and presents opportunities for investments.

So with that, we we come to come to the end of what we had to present. In summary, the five themes that we are backing up quite strongly are core education remains good as gold.

The sector is already poised for growth, and COVID is is the real history here.

Foreign brands are entering, entering Asia, which present opportunities for investors to access it at the premium end. Local platforms in the mid market value segment, are achieving scale and present further opportunities for investments.

Number two, strong demand for transnational education led by India, which is the fastest market, will continue to remain so and in absolute scale will surpass China over the next four to five years.

Regulatory tightening in certain markets is a transient phenomenon. Long term demand drivers remain, but this also gives opportunity to to sort of, you know, others other destination markets, will gain favor and present opportunity.

Upskilling, as Subhash mentioned, a huge scale gap in few sectors, digital health care, a few of them.

While while demand remains very strong, the scalability in this segment is easier said than done. And that's why we see limited scale models in this domain.

So in terms of opportunities, if you're holding on or have access to to one such one such platform, I think there's opportunity to transform and and and reach significant scalability by use of tech.

Then and this opportunity also remains an opportunity for higher education higher education operators and investors as opposed to just limiting to new age online models.

EdTech, investment activity is uncertain, but use cases are certainly moving in the positive direction.

Brick and mortar models are adopting technology.

You know, twenty, thirty percent of online sessions in any higher ed setting are very common now.

This is also giving rise to education SaaS companies, which are serving brick and mortar models and businesses to enable efficiency and other business drivers.

AI, as we mentioned, will will increasingly find its use in terms of standardization, efficiency attainment, more use cases in supplementary education. But, but even in others, like what education SaaS companies have done, AI will AI will will will find that way, and will be used, with traditional education businesses.

And finally, a continued capital deployment is expected in India and strong growth that we see both in demand as well as availability of scale assets, will drive an accelerated investment activity in in this part of the world.

Great. So with that, we open up the floor to to question and answers, and let's see let's see what we have which has been posed. Subhash, feel free to look at the q and pick up some questions as you can.

Since we have talked about the India themes, Sudip, a lot of interest around BYJU Sun Academy and how the tutoring sector is going to trend. I think good to shed some light on that.

Yeah. I think I think even in the tutoring sector, the demand drivers remain strong.

Life did come to come to full circle when tech models, you know, started opening centers.

We believe that, you know, blended and omnichannel models in the segment where tech is rightly deployed, would be the way forward in this segment?

Probably, it's just that the valuations are now being more reasonable rather than overvaluing some of these forms. But in general, as Sudip mentioned, the fundamentals are quite strong for these sectors to still grow.

There's a lot of interest around English language training, Sudeep. I think we can talk about the use of AI and if there is any potential for further investment or consolidation.

Yeah, I think, I think the the language learning and probably there was also a related question on Chinese businesses in the language learning.

So, I think I think with the constraints posed in the home market in China, a lot of the a lot of the models who had already invested in tech capabilities and product capabilities, they are looking to deploy it outside of China in other Asian markets, particularly Southeast Asia.

And there have been very success in terms of, you know, cross country model succeeding. But that is the best way in which existing product, existing technology, operators have built in China with huge investments over the last last decade will will will find its way.

I think I we we we don't see, like, new players coming into the system, but increasingly even brick and mortar models are adopting technology. And as we said, technology is finding greater adoption in supplementary learning, language learning, where, you know, artificial models, artificial intelligence models can you know, with the back of speech recognition, modulation, will find their way. So supplementary education, certainly, a lot of the tech can be can be deployed there in in also in in language learning.

I think for the core education sector, Sudeep, there seems to be interest in the Vietnam market. Maybe we can shed some light on HCMC and Hanoi.

Yeah. I mean, Vietnam does continue to be one of the strong, you know, demand market when it comes to international education. And and I think I think the fundamental principle that products with English get premium as well as a scale remains in that market, you know, remains to be a theme in that market.

If both both at the top end, international school segment is seeing growth, but that is that that will be marked by increased competition from British school brands. Brighton has already opened a campus in Hanoi, and LCS is in Ho Chi Minh, And that will drive competition in that segment.

Even that segment will be driven by locals as we talked in our presentation.

And I think in the bilingual segment, there'll be continued growth.

And the segment is already growing at double digit in terms of enrollment growth.

So we feel strong in terms of demand.

A lot of the calibration is around demand supply at the catchment level where where because a lot of capacity has also been added in the last eighteen to twenty four months, a few catchments and few segments will find themselves in an oversupply situation. But by and large, the demand drivers are are quite quite quite healthy.

There's also a question on demand for online education bachelor degrees in the SCA market, and a lot of this is linked to employment outcomes, and that is where you'll see that a lot of the operators who are kind of looking at these degrees are either looking at the problem statement from an access perspective and ensuring that the cost of delivery is relatively lower to ensure return on investment, but the employment perspective still, is a question mark that needs to be answered.

The other potential option is to split the degree into two plus two sort of programs where the first two years are connected more online and the next two years can be connected on campus in the home country so that there is potential employment opportunities or migration opportunities into the destination markets.

But maybe you can add more light or color to it.

Yeah. I can see a question around edtech where , you know, someone from the audience is asking around deal multiples we are seeing in education sector.

So , I mean, you know, generally, we are seeing a very strong rationalization around valuations in the tech segment.

And gone are the days where, you know, high hgh valuations as multiples of revenue would would suffice seeking investments.

I think a lot of focus has shifted towards parts to profitability, commercial sustainability in that in that segment as we talked about in our fourth theme around EdTech.

So the conversation has shifted from, you know, just top line customer acquisition, you know, in the form of buying revenue to sustainable unit economics or at least the path towards that.

There's also a question on, publishers tackling the AI challenge.

Yeah. I think I think that that trend, you know, publishing as an industry has felt, you know, probably the most impact from from technology even before even before AI or even before the conversation entered into into, you know, as sophisticated tools as as AI and other other things.

So I I think large publishers who have already digitized their content have han opportunity to bring in elements of, you know, intelligent content, intelligent assessments, and leverage that in their products, so that it becomes a bit more service oriented as opposed to a pure play content business. And those, intelligent solutions would help drive publishers or the demand for intelligent content beyond just the pure play content, which, by and large, would become a commodity in the in the tech tech age.

I think there's also a question on the k twelve space in China, especially for international operators, so the considering extensive work there, maybe some details could be provided.

Yeah. I think I think the regulatory challenges in China have been felt by international operators.

Despite demand being very strong for for these products, we will not see an increase in supply. So as a result, what we are seeing is that a large part of that demand from China will actually be accessed outside of China, and which is where this promise of British school brands, you know, opening up in Southeast Asia and other parts is coming into play. So we will see and we are already seeing a great influx of of China demand into Singapore, into Bangkok, into Malaysia, and other Asian markets where international education will be accessed by Chinese population.

I think in the after school enrichment space, a lot of providers have moved towards hybrid or digital learning modes as well. In some of the cases, even if it's English language training, foreign teachers are not moving countries. So it's primarily online classes, are enabling them to increase the utilization of their physical space as well and also schedule sessions in such a way that the overall utilization levels are higher.

Yeah. I think there's a question on other than China and India, where do we see opportunities for k twelve?

So I think I think I think China and India are two large markets, but also driven by by by regulatory regulatory challenges, more so in China, less in less in India.

And as a result, we are seeing a very vibrant k twelve market in Southeast Asia, which includes Vietnam, Singapore, Thailand as top three markets where there is there are strong demand indicators which are translating into strong enrollment growth for for schools in those markets.

Which curriculum is showing greater demand in twenty twenty four? IB or British national curriculum. So this is a this is this is quite specific. And though there will be some market level nuances, I think the sophistication of Asian consumers by and large around curriculum is not very high.

There was a time when, you know, there was a there was an association of destination market with the with the kind of curriculum that you do, but but with all sorts of equivalencies in place for higher education in Anglophone markets, there are no such there are no such limitations.

And both British and IB are finding strong demand.

We are I mean, you know, the demand for IB is also tabbed by British schools when they offer IBDP at the top end of the schooling.