Singapore- and India-based education fund manager Kaizen Private Equity (Kaizen PE) has invested $10 million in YOLA, a Vietnamese ELT service provider backed by local PE firm Mekong Capital.
The transaction is Kaizen PE’s first investment in Vietnam, the firm said in a statement on Monday.
YOLA had earlier bagged a $4.9 million funding from Mekong Capital in 2016.
Co-founded by Ngo Thuy Ngoc Tu (chairwoman), Pham Anh Khoa (CEO) and a few other Vietnamese overseas alumni, YOLA focuses on providing English training embedded with life skills and knowledge for K-12 students in Vietnam.
The company has trained more than 30,000 students through its network of 14 campuses in Ho Chi Minh City and Hanoi. YOLA’s alumni have been admitted to over 200 top universities in the US, Australia, and the UK.
The company uses designed curriculum and an online content platform to deliver a blended learning experience. These are “aspects that differentiate YOLA strongly from other providers in the market,” said Sandeep Aneja, founder and managing partner of Kaizen PE.
“We expect the Vietnamese education sector to continue growing strongly over the next five years and are delighted to have Yola as our first investment in the country. We look forward to more transactions in the near future,” he added.
Vietnam spends about 8 per cent of its GDP on education annually, according to the Vietnam Ministry of Education and Training. The government has a strong focus on pursuing educational goals, committing 20 per cent of the state budget to education every year.
“We are impressed by the importance of education in Vietnamese culture, and the outstanding results that Vietnam has obtained in terms of school attendance, completion and student achievement,” Aneja said.
“By partnering with Kaizen Private Equity, one of Asia’s most active education investors, Yola gains a partner whose vision of educational and social impact is aligned with ours, and we are excited to work together to continue to deliver on our mission of educating 500,000 students,” said Pham Anh Khoa, co-founder and CEO of YOLA.
Kaizen PE is the only financial investor that invests exclusively in education institutions and companies in South and Southeast Asia. Its portfolio includes K-12, parallel education, professional training, and education technology companies such as Toppr, Varthana, KLAY School, Impartus Innovations and WizIQ.
The firm manages two equity funds with assets greater than $150 million. Its second vehicle, Kaizen Private Equity Fund II, targets a size of $125 million, according to Dutch entrepreneurial development bank FMO which has committed $15 million to the fund.
Education has been on the top list for private equity investment opportunities in Vietnam. YOLA’s earlier backer, Mekong Capital, had invested in Vietnam Australia International School and exited the firm to TPG Capital for a 4.5x return in 2017.
In the same year, EQT Partners acquired a stake at ELT group ILA Vietnam. Since then, the sector has witnessed other investments, including tens-of-million-USD funding from TAEL Partners in IvyPrep, $50-million investment by Northstar Group in Topica Edtech and Navis Capital’s investment in Thanh Thanh Cong Education recently.
