SuperKids Group, a Vietnam-based early childhood education business, is in talks to raise $3-5 million in fresh funding to support its expansion plans, two people with knowledge of the matter told DealStreetAsia.
The company sent out an investment memorandum in May 2020 to prospective investors, said one of the people mentioned above.
SuperKids intends to use the fresh funds to embark on strategic acquisitions for growth. The Vietnamese early childhood education sector is fragmented, and operators are not profitable due to a lack of operational knowledge and scale.
In the second half of this year, SuperKids plans to acquire three new schools using its internal funds. The company expects to book around $1.5 million of revenue and be profitable by the end of 2020.
SuperKids had not responded to DealStreetAsia’s queries at the time of publication.
Founded in 2016, SuperKids Group currently operates eight kindergartens. It had acquired two schools named Bambi in the second quarter of this year.
The group has around 700 students in Hanoi and Ho Chi Minh City. The company expects to have about 1,400 children enrolled in its schools by the end of 2020.
SuperKids Group currently operates five brands, namely SuperKids, Ivy Kids, Fuji Kindergarten, Lotus Kids and Bambi with a total of 200 teachers and other staff. The firm intends to rebrand all the schools as SuperKids in 2021.
Currently, the company serves the low-medium segment, medium segment and high-medium segment through its kindergartens. The group expects to operate 75 per cent of its schools under the bilingual model, said one of the people mentioned above.
Vietnam’s early childhood education sector is seen as an exciting bet for foreign investors due to macro factors such as a rising middle class and a growing desire to learn English in the country, said an industry expert.
In 2020, Vietnam’s middle-class population, the fastest-growing in Southeast Asia, is said to reach 33 million. Also, there will be around 7.73 million children aged 1-5 years in the country. This favourable demographic is expected to encourage further growth of the early childhood education market, which could reach around $1.6 billion in revenue by 2025.
Other factors driving investor interest include exit options by way of secondary sale to private equity funds, strategic sale or IPO on the local stock exchange.
Notable transactions in the Vietnamese education market include Cognita’s acquisition of International School of HCMC in 2011 and Saigon Pearl Primary Schools in 2014, the Nord Anglia-British International School deal in 2015, TPG’s purchase of a majority stake in Vietnam Australia School (VAS) in 2017 and EQT’s acquisition of English language learning centre ILA in the same year.