Education

Edtech giant faces hard slog on its M&A field trip

19 Jul 2022

Byju’s, India’s most valuable startup, is eyeing U.S. higher-learning specialist 2U in the latest period of both firms’ deal frenzy. It’s betting education technology can be outsourced to its home country. If wrong, Byju’s will be an M&A version of a Dr. Frankenstein experiment.

Capital Calls: Bank stress tests, Japan inflation

24 Jun 2022

Concise views on global finance: U.S. lenders passed the latest Federal Reserve capital exams, but they’re bound to be more stressful next time; the country’s consumer prices rose 2.1% in May, intensifying a standoff between the central bank and bond investors.

Capital Calls: SoftBank Arm-twisting

22 Jun 2022

Concise views on global finance: The UK government may be eyeing desperate measures to keep SoftBank-owned chip group Arm's IPO in London.

Capital Calls: Blackstone backs perpetual students

19 Apr 2022

Concise views on global finance: The private equity firm is buying a campus housing investment vehicle for $12.8 billion. Steady cash flows and the need for more dorms make it a nice fit for Blackstone’s permanent capital vehicles.

China tutors brave class on corporate reinvention

23 Feb 2022

An education crackdown decimated businesses like New Oriental, which laid off 60,000 staff and reversed into a $876 mln half-year net loss. Its new ventures include e-commerce. Yet tales of extreme diversification by startups can end well in nimble corporate China.

Capital Calls: Crocs knows how to pandemic

11 Jan 2022

Concise views on global finance: The rubber-clogs maker’s sales are going gangbusters, and it has used lockdown success smartly to expand with a trendy acquisition.

Disappearing students drag down U.S. higher ed

3 Jan 2022

What once seemed like a pandemic-driven downturn in college enrollment now looks like the start of a broader slump for all but the most elite schools. In 2022, the winners in the education business will be those attending to the Ivy League.

Mammoth re-engineering project begins: Germany

28 Dec 2021

Its manufacturing-led, carbon intensive economy is ill-suited to the 21st century. Chancellor Olaf Scholz and firms like Volkswagen will spend more on green and digital investment. The trick will be to plough on despite short-term supply chain problems and rising labour costs.

Byju’s SPAC turns into India’s $48 bln IPO problem

20 Dec 2021

New Delhi is yet to allow companies to list directly overseas, so ed-tech star Byju’s is mulling a U.S. debut via a merger. Other startups will probably get creative too. It’s similar to the regulatory grey area that China’s tech giants exploited but are now paying the price for.

Byju’s SPAC deal is straight out of the textbook

16 Dec 2021

India’s edtech startup has an offer to go public at a $48 bln valuation. SPAC sponsor Michael Klein would invest in a private placement too, adding credibility to sales forecasts. Byju’s copies Grab’s deal outline, but growing U.S. revenue could help it fare better.

Textbook supplier Chegg flunks terminal-value test

2 Nov 2021

A 48% collapse in the educational book-rental company’s shares – after it cut its sales forecast by just 6% – might seem draconian. Chegg’s misfortune shows how, for companies betting on long-term demographic trends, small shifts in assumptions can trigger huge changes in worth.

Indian edtech scores relatively high marks

16 Aug 2021

Foreign investors are piling into Byju’s, upGrad, Eruditus and others, fuelling valuations and acquisitions. They have a stronger foundation for international expansion than Chinese peers. A young population also makes a Beijing-style crackdown on online learning less likely.

Chancellor: Bringing down the Red Curtain

4 Aug 2021

Recent shocks from Beijing are reminders that while investors in the West are protected by the rule of law, China’s markets are characterised by the “rule by law”. Investors shouldn’t forget Beijing has the final say on how capital is allocated and who gets paid and who doesn’t.

China’s tutoring rules create tough VIE homework

27 Jul 2021

Variable interest entities used to skirt overseas investment restrictions have existed in a regulatory gray area. Beijing’s ban on foreign funds in education suggests those days are ending. Unwinding the structures will be messy, but also could teach other industries a lesson.

Chinese communists are souring on capitalism

26 Jul 2021

Beijing wants its $120 bln tutoring industry to turn non-profit, wiping billions off U.S.-listed TAL and peers. Fintech giants are being forced to hand intellectual property to state banks. A push to shrink margins and convert private assets into public goods is gaining momentum.

China’s education crackdown flunks economics

21 Jun 2021

Tougher rules on tutoring services are hammering shares of TAL, Gaotu and others. The country’s manic competition for school admission distorts the labour supply and suppresses the birth rate. It’s a byproduct of a widening wealth gap, however. This approach could make it worse.

Beijing finally gives China shorts a helping hand

15 Jun 2021

Central government crackdowns and the collapse of U.S.-based fund Archegos have delivered selective relief to investors betting against Chinese companies listed in New York. Caution is warranted as outbound investment quotas ease. Patriotic reinforcements are on the way.

Review: Meritocracy is a myth

4 Jun 2021

The business leaders who flock to the World Economic Forum use wealth and power to get their offspring into the best schools. This approach increasingly undercuts a society based on merit. Today’s capitalist elite, argues Adrian Wooldridge, is a new aristocracy in disguise.

Capital Calls: AT&T’s bankers, Blackstone in Italy

17 May 2021

Concise views on global finance: The U.S. telecom giant’s unwinding of its purchase of Time Warner is a gift for advisers on Wall Street; a court rules that the U.S. private equity firm’s 2013 purchase of Corriere della Sera’s HQ was valid.

Capital Calls: Disney misses the mark

13 May 2021

Concise views on global finance: Walt Disney reported nearly 104 million subscribers for its streaming flagship service.