Riiid, an edtech company powered by Artificial Intelligence (AI), is acquiring Qualson, another enterprise in the edtech sector. Riiid has received a $152 million(200 billion won) investment from the Vision Fund, led by SoftBank Group Chairman Masayoshi Son, which values the company at approximately $761 million.
Riiid is planning to finalize the acquisition of Qualson this month, according to investment banking sources on Dec. 11.
The acquisition will be made through a swap deal with a swap ratio of approximately 8 to 1. The swap ratio represents the rate at which the acquiring company will offer its own shares in exchange for the target company's shares during a merger or acquisition. The deal has already been approved by major shareholders, but it is still pending a shareholder meeting.
Riiid is a startup that has developed an AI-powered TOEIC training service called 'Santa'. TOEIC is an internationally recognized standardized test of English proficiency for non-native speakers. This test is commonly taken by individuals in Korea and Japan who are seeking certification for employment.
The company received recognition as one of the 'Most Innovative Companies' in the world by Fast Company, a US-based technology and economic media, in 2022. During the same period, Riiid achieved sales of $4.3 million but also reported an operating loss of $44 million.
In May last year, Lloyd's received a Series D investment of $152 million from the pre-mentioned SoftBank's 'Vision Fund 2′. The cumulative investment amount in the company is reportedly around $216 million.
In addition to SoftBank, other investors include banks and VC companies such as Korea Development Bank (KDB), Nvester, Intervest, IMM Investment, DSC Investment, Korea Investment Partners, Company K Partners, and Daesung Private Equity.
Qualson is a company known for its English education platforms, such as 'Super Fan' and 'Real Class'. It has reportedly received a total of $15 million in investment from various enterprises, including NAVER, a Korean tech giant. When it was reported that the company was planning to go public in 2020, its estimated valuation was $304 million.
The investment banking industry anticipates that the two companies will be able to expand their businesses without the need for additional capital injection. They foresee a scenario where increasing the companies' scale will boost their value, leading to a strategic decision on the timing of an IPO.
This article was originally published on Dec. 11, 2023.