Increasing Foreign Investment in Korea’s Private Education Sector
Reports in both the Korea Times and the Joongang Ilbo recently highlighted the continued growth of South Korea’s private institutes, otherwise known as cram schools. According to the Ministry of Education, Science and Technology, the private education market was worth 20 trillion won last year. Some, however, estimate the market to be as big as 30 trillion won when including institutes for kids and adults. Many private institutes have turned into huge enterprises with nationwide franchises and are preparing to list on the stock market. Some of them are even planning to advance into other Asian markets.
A number of global private equity funds have invested in the private education market over the last few years. Their investment is expected to hone its competitiveness but concerns are growing that public education at schools might be left behind. The investments show that private education is not about small private cram schools or “hagwon” under careless management anymore ― it has grown into a huge industry.
The Carlyle Group, for example, invested $20 million in Topia Academy, a private institute specializing in English education; TStone invested 60 billion won in Time Holdings, a cram school; Elim Edu, an essay school, got a $13 million investment from Goldman Sachs; and AIG Investment put $60 million into Avalon, an English language institute.
President Lee Myung-bak administration’s focus on English education is also expected to bolster the private education market.