Ed Tech in Asia: Key Trends and Opportunities

1. ED TECH IN ASIA: KEY TRENDS Allison Baum,18 June 2015

2. INTRODUCTION

3. WHY BE HERE? “We’re here to put a dent in the universe. Otherwise, why be here?” - Steve Jobs

4. Early stage venture investors supporting exceptional entrepreneurs to build remarkable businesses

5. WHO WE ARE Allison Baum, Managing Director, Tokyo, Japan Ø  Experience in educa3on opera3ons management including: curriculum development, marke3ng, teacher training, real estate expansion, hiring, and business development Ø  Bootstrapped and launched educa3on business in Asia, scaled to US$1mm revenue run rate, 2,000+ students, 60 teachers, 6 employees in nine months Ø  Ins3tu3onal sales and trading at Goldman Sachs, 8 years investment experience in public and private markets Tytus Michalski, Managing Director, Hong Kong SAR, China Ø  16 years in cross-‐border investment experience across Hong Kong, Singapore, Tokyo, London, Canada, and the United States Ø  Previously Chief investment Oﬃcer of PMA Investment Advisors, where he managed both regional funds and the equity team Ø  Founding member of PMA, scaled from US$600mln to US$3bln in ins3tu3onal AUM and sold in 2006 for US$200mln Stephen Forte, Managing Director, Menlo Park, CA, USA Ø  Tech Strategy at Telerik, US$260mln exit Ø  Experienced entrepreneur with 5 successful exits Ø  Mentor at Thiel Founda3on, ChinaAccelerator, HAXLR8R Ø  Founder of Mach5, a Silicon Valley based startup accelerator and co-‐founder of AcceleratorHK, Hong Kong’s ﬁrst startup accelerator

6. WHY EARLY STAGE? RETURNS ü  Target returns 30% IRR / 5x TVPI multiple ü  Current portfolio on track to exceed targets ACCESS ü  Diverse network of deals & people ü  Over 300 co-investors around the world INNOVATION ü  Cutting edge technology, teams, businesses

7. THE NEXT FRONTIER

8. 2015 1800

9. THE RISE OF ED TECH 0 500 1,000 1,500 2,000 2,500 2010 2011 2012 2013 2014 Millions Private Investment in Learning Technology Companies (US$ Millions)

10. THE RISE OF ED TECH

11. HIGH PROFILE EXITS 0 10 20 30 40 50 60 70 80 90 100 2011 2012 2013 2014 (est) # Deals EdTech Exits +200% in 2014 IPO M&A

12. ü  75% capital invested into edtech in 2014 was U.S. ü  9/10 largest ﬁnancings in U.S. ü  60 million K-12 students ü  96% of K-12 students in the world are outside of the U.S. USA HAS LED THE WAY

13. ASIA IS NEXT US$59.90bn: Size of global ed tech market by 201816 600 million: K-12 students in Asia 5 years: Time until Asia is the largest regional market 16 300 million: People learning English in China 195 million: College graduates in China by 2020 40% income spent on education

14. DEVELOPING ECOSYSTEMS ü  People ü  Connectivity ü  Capital

15. GRASS IS GREENER

16. LOCAL CHALLENGES ü  Localization ü  Business Model ü  Language ü  Culture ü  Values ü  Timing

17. ü  B2C business models ü  Mobile ü  Language Learning ü  Exits KEY OPPORTUNITIES IN ASIA

18. #1: B2C IN ASIA ü  600 million K-12 students ü  40% income spent on education ü  60-96% of secondary school students receive outside tutoring

19. #2: MOBILE IN ASIA ü  APAC = 57.7% of the world’s mobile phones ü  80% of internet users in China access via the mobile/tablet ü  Highest % mobile payment users in the world

20. #3: LANGUAGE LEARNING ü  300 million people learning English in China ü  30% of foreign students studying in U.S.are from China ü  English skills correlate with 30-50% higher income

21. ü  EducationTravel = US$80 billion / year ü  Language Education= US$12 billion /year ü  80% students sent by agents

22. ü  Mobile ü  Publishing/Media ü  Tech/ Gaming ü  Education ü  IPO #4: EXITS

23. CROSS BORDER ACTIVITY

24. ü  Global solutions ü  Local implementations ü  Cross-border collaboration ü  Global, specialized investors WHAT’S MISSING?

25. GLOBAL CHALLENGES ACCESS EFFICIENCY ENGAGEMENT OUTCOMES ü  Limited ü  Quality vs. scalability ü  High ﬁxed costs ü  No infrastructure ü  Differentiated learning ü  Motivation ü  Assessment ü  Relevancy

26. GLOBAL SOLUTIONS ACCESS EFFICIENCY ENGAGEMENT OUTCOMES

27. WHERE FRESCO FITS IN ü  Bridging the gap ü  Investing in scalable solutions ü  Dedication to sector ü  Early stage Capital ü  People ﬁrst

28. HOW WE DO IT

29. “If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.” ― Antoine de Saint-Exupéry

30. GET INVOLVED “The people that are crazy enough to think they can change the world are the ones that do.” - Steve Jobs

31. KEEP IN TOUCH ü  www.fresco.vc ü  allison@fresco.vc ü  @allison_baum