[Exclusive] Anchor PE Reinitiates Sale of Stake in Etoos, the No. 2 Online Lecture Provider

Anchor Equity Partners (PE) is resuming the sale of its stake in Etoos. Etoos is the second-largest company in the education industry, having grown through 'internet lectures.' Anchor PE attempted to sell Etoos two years ago, but the deal fell through due to unfavorable market conditions.

According to the investment banking (IB) industry on the 23rd, Anchor PE, the largest shareholder of Etoos, is pushing to sell up to 20% of its stake in EduEdison. Anchor PE holds 54% stakes each in Etoos Education and Etoos Edu through EduEdison.

In the traditional education sector, it owns Cheongsol Academy (a college entrance exam cram school), Etoos 247 Academy (a self-directed learning college entrance exam academy), Etoos (an e-learning platform), and Etoos Book (publishing). In the edutech field, major businesses include Danbi Education (smart home learning for preschool and elementary students) and Jokbo.com (learning for middle and high school students).

Combined, Etoos Education and Etoos Edu recorded sales of 245.2 billion KRW, operating profit of 32.7 billion KRW, and net profit of 34.2 billion KRW in 2022.

Etoos started in 2001 as a startup founded by three Seoul National University students. The online video lectures launched in 2004 grew rapidly, threatening Megastudy, the industry leader. At the time, Etoos gained popularity by featuring famous offline academy instructors in the then-novel internet lectures.

It was sold to SK Communications in 2005 and then acquired in 2009 by Cheongsol Academy, which was running an education business for middle and high school students. Since Etoos had a higher brand value than Cheongsol, the company was renamed Etoos Education. To expand market dominance, Etoos Education sought investment, and in 2015 Anchor PE became a minority shareholder, eventually becoming the largest shareholder with a 54% stake.

Recently, the college entrance exam preparation education market, including internet lectures, is facing a crisis due to a shortage of students as the school-age population is less than the total university capacity. When Danbi Education, a subsidiary of Etoos, saw its 'Wink' online learning program gain popularity among elementary students, it pursued capital recovery through Danbi Education's IPO instead of selling Etoos. However, with the worsening capital market conditions, even this plan's success is uncertain.

Unlike its aggressive investments so far, Anchor PE has not achieved significant results in capital recovery recently. Although it invested around 350 billion KRW in Market Kurly, the IPO market downturn delayed the opportunity to recover funds. Besides Etoos, Anchor PE is currently pursuing the sale of call center company MetaM and data analytics company Encoa.