Vietnam’s ELT firm Apax English in talks to raise funding to expand ops

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Vietnam-based English language teaching (ELT) company Apax English, owned by Ho Chi Minh Stock Exchange (HOSE)-listed Apax Holdings Investment JSC, is in talks to raise about $40 million to expand its operation, multiple sources privy to the development told DealStreetAsia.

The company is understood to have roped in PwC Vietnam as its exclusive financial advisor last year in August.

In December 2019, Apax Holdings acquired an additional 6.6 million shares in Apax English for 53,000 dong ($2.3) per share, which resulted in the former increasing its stake in the ELT company from 68.91 per cent to 79.69 per cent. The transaction had pegged the company’s total valuation at around $150 million.

Apart from Apax Holdings, South Korea’s private education company Chungdahm Learning owns another 10.11 per cent in the ELT company, according to a business registry document. Apax English was launched in 2014 in partnership with Chungdahm Learning, which invested $10 million in the company two years later.

While the exact valuation of Apax English could not be ascertained, one of the persons mentioned above said it could be riding on $200 million currently.

News pertaining to Apax English’s proposed fundraising plan has been doing the rounds for quite some time. However, sources said it may be a tad difficult for the company to raise the funding from institutional investors due to “noises in their financials.”

Earlier this month, DealStreetAsia got to learn about Apax English postponing salary payments to its employees and teachers. Sources said that the situation erupted because of Vietnam’s long new year celebrations coupled with the outbreak of CoVid-19. Every English centre operator in the country had temporarily halted classes, which resulted in no revenue for the past two months, these sources claimed. However, as the company pursues growth and expansion, its long-term story remains intact, they added.

Both Apax Holdings and Apax English comprise members of Egame Education Group JSC, an online education, retail and tech business group. Its founders include Nguyen Ngoc Thuy, who is also known for judging a popular angel investment reality show – Shark Tank Vietnam.

An email sent to Thuy, Apax Holdings’ founder, did not elicit any response.

Apax English claims to be the largest ELT chain in Vietnam with over 120 centres across the country catering to around 75,000 students. The company’s revenue increased almost 40 times in 2017 compared to the year earlier. However, over the past three years, its profit before tax has declined from 197.9 billion dong in 2017 to 113.8 billion dong in 2019.

Going forward, the firm is understood to be looking at expanding its English centres as well as establishing a K-12 school, Firbank Australia International School. It also plans to import Korean video-based English learning programme EnglishEye.

Apart from the ELT business, Apax Holdings owns another subsidiary that runs a kindergarten chain, IGarten. The holding company has recently hiked its ownership in IGarten, while it has divested a part of its stake in Apax Franklin International Academy, a business providing English courses, test prep and secondary education services. According to Apax Holdings’s H1-2019 financial report, about 60 per cent of its profit came from the ELT arm.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.