Sign up

Have some pie!

Who invests in who? The role of funding in international education

As public-private partnerships increase, The PIE has been taking a closer look at the types of investment, strategic acquisition and subsidiaries in the global education ecosystem.

Photo: pexels

It is common for multiple firms to invest in the same start-up business in rounds of series funding

In this series, we will be signposting some interesting investment groups to our readers and following the money to see who invests in who.

First we need to understand the types of investment that are happening in the sector and then we can analyse how that influence extends through to public institutions.

Investment is driving innovation in digital marketplaces, application portals, student loans, payment platforms, outsourced admissions, pathway providers and online learning.

The under-the-radar force of private equity reaches into every part of our society including healthcare, high street shops, pharmaceuticals, supermarkets, sports franchises and education.

But as interest rates rise, should we be concerned about the role of private equity debt and ownership in many pillars of our public-private partnerships?

How does a profit-driven investment culture impact on both education provision and essential ancillary services and does it increase the vulnerability of students to be used as commodities?

First, we point out different types of funding operators active in our sector.

Sometimes companies raising finance can work with a variety of investors or investment sources including private equity funds, venture capital funds and banks or pension funds.

Companies typically go from pre-seed to seed funding to series A, B, C and D, etc. For example, by the time ApplyBoard raised its series D, it had 25 investors over 10 funding rounds.

Private equity

Private equity describes investment firms that buy and manage companies in order to make an operating profit or through re-sale at a later date.

Firms pool investment funds on behalf of other investors to acquire public or private companies. Private equity is a direct alternative to investing in the stock exchange and often avoids the scrutiny of public shareholders.

The capital for acquisitions comes from private investors and is supplemented by debt.

Reasons for investment vary: this can include ‘distress’ investing with the aim of turning around a struggling company to ‘carve outs’ where assets, teams and technology are stripped from a company and sold as separate business units.

The private equity industry has grown rapidly over the pandemic due to low interest rates on that debt compared to high prices and moderate returns on the stock market.

After the high water mark of 2021, the amount of funding available for edtech is slightly tailing off, according to investment news platform Crunchbase. But there remain a lot of companies with investment levels that mean they need to significantly scale and prove the hockey stick growth curve that may have justified the original investments.

Examples of private equity firms investing in education brands you may have heard of include Leeds Equity Partners which invested in INTO University Partnerships and Ross University; Inflexion which owns Times Higher Education; University Ventures investors in MPower Financing, Examity, CollegeVine and MissionU; Temasek Holdings which has invested in Flywire and UpGrad; Averna Capital which has backed agent SI-UK.

Venture capital

While venture capital is often grouped in with private equity, it has some distinct differences.

Private equity firms tend to acquire mature, established companies where there is potential to increase value.

Venture capital tends to invest in start-ups and disruptors at an early stage, with the hope they will become highly profitable in the future. It is common for multiple firms to invest in the same start-up business in rounds of series funding. This spreads the risk and enables rapid growth.

Venture capital investment does not even have to include finance. Part of the value offered by venture capitalists is to lend their expertise, contacts and influence to the governance of a company to try and ensure success.

Examples of venture capital firms include ETS Strategic Capital which has invested in ApplyBoard, MPower Financing and UpGrad; Emerge Education, an early stage venture capital fund which has invested in Enroly, Unibuddy and AULA; Owl Ventures which has backed Leap Finance; and OIF Ventures which invested in student recruitment marketplace

Debt funded capital

It is also possible for companies to raise similar levels of capital investment through long-term fixed-maturity borrowings.

Like any loan, this debt is accompanied by interest payments and will need to be repaid over an agreed timeframe.

However it allows a company to raise funds to make its own acquisitions, investments or new product lines to facilitate growth without giving away equity in a company.

Times Higher Education’s own acquisitions of BMI Global, Inside Higher Ed and Poets and Quants all came after debt funding an additional £5m in capital from ThinCats.

Pension fund investments

The pool of funds that are accumulated through pension plans is invested to ensure that companies can pay their employer contributions and meet their workers’ retirement plans.

This has traditionally meant safer investments in very stable industries such as government bonds and blue chip companies.

However as the pressure grows from aging populations, pension funds have been forced to invest in a wide range of assets including private equity funds, real estate and education.

The Ontario Teachers Pension Plan Board provided C$375m investment in ApplyBoard, while the Canada Pension Plan has invested in companies such as Navitas and Prodigy Finance.

In the next few articles we will be taking a closer snapshot look at some of the examples above and their links through investment.

Much of this information is publicly available through investment directories like Crunchbase.

Are you aware of the reach of private equity and venture capital in international education? Are you an edtech entrepreneur who is concerned about rising interest rates and unaffordable debt? Have your say in the comments below or email us at

Related articles

Still looking? Find by category:

Add your comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer: All user contributions posted on this site are those of the user ONLY and NOT those of The PIE Ltd or its associated trademarks, websites and services. The PIE Ltd does not necessarily endorse, support, sanction, encourage, verify or agree with any comments, opinions or statements or other content provided by users.
PIE Live Australia

Win a ticket to PIE Live Australia
plus flight credit of 200 US Dollars

Enter now