PE firm Northstar invests $50m in Vietnam’s Topica Edtech

Singapore-headquartered private equity firm Northstar Group has invested $50 million in Vietnam-based Topica Edtech’s Series D round, marking the biggest financing for an online education company in Southeast Asia.

Topica said Northstar had a minority stake upon completion of the investment and has joined its board of directors.

Northstar is the sole investor in this funding round. DEALSTREETASIA has learned that the funding makes the PE firm Topica’s largest institutional backer.

The investment will support new product development across the region and increase the pace of enhancements in Topica’s technology and AI capabilities, the Vietnamese firm said in a statement.

In addition to Northstar, Topica counts Openspace Ventures – a former affiliate of Northstar that was earlier known as NSI Ventures – as an investor. Openspace had invested in Topica’s previous funding round. (The venture capital firm had announced the final close of its $135-million second fund in August 2018.)

Topica had also previously raised money from investors including Patamar Capital, CyberAgent Ventures, EduLab Group and IDG Ventures.

Co-founded in 2008 by Tuan Pham, the company provides online English tutoring and education services, online bachelor’s degree programmes in partnership with 12 universities in the region, and short skill development courses. It claims to have offered its services to 1 million working adults. It also has a startup accelerator under the Founder Institute franchise.

The company says several US universities accept credits from Topica-powered programmes and claims it was the first in the world to launch an augmented reality app for speech tutoring.

Topica’s services have been available in several other Southeast Asian markets including Indonesia, Thailand and the Philippines.

The company had launched Topica Founder Institute in 2011 as one of Vietnam’s first accelerators. Its incubated startups have to date raised over $20 million outside the programme, from investors including Monk’s Hill Ventures, IDG Ventures, 500 Startups, Gobi Partners and Patamar Capital, among others.

“We at Northstar are heartened and humbled to support Dr. Tuan and his world class team at Topica as they pursue their important educational mission. We look forward to working closely with the management team and the experienced group of Topica’s existing investors on the next phase of this exciting journey,” said Bert Kwan, managing director of Northstar.

Managing more than $2 billion in committed equity capital, Northstar is currently preparing to launch its fifth fund and is targeting to raise more than $800 million for this vehicle. It is currently investing from Northstar Equity Partners IV. Its four funds have invested in over 30 companies across the banking, insurance, consumer/retail, manufacturing, coal and mining services, technology, telecom, and agribusiness sectors.

Vietnam, which had received little attention from private equity earlier, has witnessed a slew of PE deals this year as regional, global and country-specific funds rush to cash in on the country’s growing economy, a booming stock market and the government’s push to privatise state-owned enterprises.

While PE firms continue to look at traditional sectors, the Topica deal indicates that private equity is beginning to shake up the country’s tech scene too. The other notable tech deal in the country involved Goldman Sachs and Standard Chartered Private Equity investing a total of $33.8 million in e-wallet operator M-Service in 2016.

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