Switzerland-based Education First (EF) has agreed to sell a majority stake of its Kids & Teens English teaching business in China and Indonesia to private equity firm Permira for an undisclosed price, according to a joint press release on Tuesday.
With the deal, EF retains significant ownership in the business, which has operated for over 20 years and built 288 schools across 62 cities in China and 79 schools in Indonesia. EF Kids & Teens also allowed hundreds of thousands of students to learn online over the past few months, the companies said in the release.
Since January, when COVID-19 broke out in China, classrooms have been shut down, forcing training companies to shift online.
The company will use the funds from Permira to accelerate the expansion of EF Kids & Teens online learning and school network in China, according to the statement. EF was founded in Sweden in 1965 and currently has 600 premises in 50 countries. Aside from the Kids & Teens business, it offers adult education and study abroad programs for Chinese customers.
The investment comes at a time when the market for adult education in China is crossing a rough patch and study abroad tours have been canceled due to the pandemic. Webi, once a major rival in the English teaching market, ceased operations in October, triggering a major controversy as clients had taken out private loans for the classes which they had to pay in advance.
Although EF is a well-known brand in China, it has not been very active in online teaching, where it faces stiff competition. Beijing-based company Yuanfudao, which just closed a USD 1 billion Series G round at a valuation of USD 7.8 billion, is one of them.
The company runs six products, including its flagship Yuanfudao app, which offers online tutoring for K12 students, and Baima AI Ke, an AI-enabled English and math-teaching app. As of January 15, the unicorn counts over 400 million users, including more than 1 million paying full-service members for Yuanfudao and 500,000 for Banma AI Ke.
EF’s Kids & Teens unit is valued at USD 1.5 billion, Bloomberg reported on Wednesday, citing people familiar with the deal.