Singapore's MindChamps plans to teach kids in China how to learn
Backed by Chinese funds, the company raises $34.3 million in IPO to expand
MAYUKO TANI, Nikkei staff writer
SINGAPORE -- "Teaching children how to learn, not what to learn." With this slogan, Singapore-based kindergarten operator MindChamps Preschool is hoping to entice parents in China and elsewhere to send their children to its schools. Fueled by 46.2 million Singapore dollars ($34.3 million) raised from its initial public offering on the Singapore Exchange, Australian founder and CEO David Chiem is driving global expansion.
He believes that the school's curiculum that is based on neuroscience and psychology addresses demands in our fast-changing world, especially in Asia. MindChamps is one of the leading preschool brands in Singapore that started operation in 2008 by the Vietnamese refugee-turned-entrepreneur.
It has been growing rapidly, despite its relatively high monthly fee of about S$1,800, driven by strong interest from Singaporean parents. There are 44 preschool centers in Singapore and 10 in Australia, the Philippines and United Arab Emirates. The media company Singapore Press Holdings is a shareholder since 2014, and it will hold about 20% in the company after the IPO.
The company is targeting China, with the help of two of the three cornerstone investors who backed the IPO: Hong Kong-based CFCG Investment Partners, under China First Capital Group, and the Chinese fund Hillhouse Capital, known for investing in big technology players like Tencent Holdings. They will be MindChamps' business partners, acting as master franchisees to expand the school network in China.
The first MindChamps preschool in China will open in Beijing. It will then be rolled out to the rest of China, focusing on the premium market covering the top 5% high-income population of the first-tier cities. China partners have franchise licenses to operate 14 centers but the number is expected to grow. "They have massive funds, and they don't want to do things in a small scale", Chiem said in the interview with Nikkei Asian Review. The company also plans to run schools in remote areas.
China is a competitive market but "growing competition for a spot in prestigious primary schools will increase demand for quality preschools," the company said in its IPO prospectus. In China, MindChamps is set to introduce the bilingual education in English and Chinese, riding on the expertise built in Singapore.
Another immediate focus is to grow its presence in Australia, before moving to South Korea, Japan and Southeast Asia, as well as to the U.S, according to Chiem.
The franchise system helps the company to grow its school network quickly. In each market, the company or its local franchisee acquires existing preschool centers, or "hardware" as Chiem calls it. The company injects the "software," or its own curriculum, proprietary teaching methods and teacher training. The schools maintain the MindChamps standards by receiving teacher training in the Singapore headquarters.
MindChamps started as an education research institute in Sydney in 1998 before moving to Singapore. "Singapore is the gateway to the East and the West. Being here gave us incredible strategic position to the world - you can tap into Asia, Europe and the U.S easily," Chiem said.
The school's curriculum, based on the "Champion Mindset," a term coined by neuroscience Professor Allan Snyder at the University of Sydney, focuses on nurturing all aspects of a child's development through the neuroscientific and psychological approach. Chiem said his schools help to develop tough and resilient minds needed for the complex future.
"In 21st century, everyone has an access to information with a click of mouse. We have to nurture children not like bonsai but like bamboos [which has deep, strong roots]," Chiem said.
The company priced its IPO shares at S$0.83 each. In today's debut, they started trading at S$0.84.
The company reported revenue of S$18.4 million in fiscal year 2016, while net profit increased 51% on the year to S$12.4 million.