Anchor PE refinances Etoos at punishing rates as Korean edtech bet sours
What's the deal? South Korean private equity firm Anchor Equity PartnersDealroom has a profile for this one. Try Dealroom → has refinanced the acquisition financing for Etoos (formerly Etus Education), a long-held portfolio company it has struggled to exit. The new debt totals US$83.8M (roughly $72M), split between US$67.1M in senior debt at 7.3% and US$16.8M in mid-tier debt at 10.8%. Hanwha Investment & SecuritiesDealroom has a profile for this one. Try Dealroom → and Shinyoung SecuritiesDealroom has a profile for this one. Try Dealroom → jointly underwrote the deal, which carries a maturity of just 18 months.
The previous financing was around US$75.5M, underwritten by Korea Investment & SecuritiesDealroom has a profile for this one. Try Dealroom →.
Why now? Anchor PE has been trying to sell Etoos since 2022 — without success. It first invested in the entrance exam education company in 2015 via US$29.3M in bonds with warrants, then acquired a major stake for US$54.5M in 2019. It now holds a 58.9% controlling interest.
The company's financials have deteriorated sharply. Consolidated revenue fell from US$98.3M in 2023 to US$77.2M in 2025. Operating profit of US$17.9M in 2023 swung to a US$3.94M loss last year. A key subsidiary, Danbi Education, posted an operating loss of US$10.5M in 2024 after earning US$23.5M in operating profit just two years earlier.
Declining school-age populations, fierce competition in online education, and costly edtech investments have all weighed on performance.
What could go wrong? The 18-month maturity and steep interest rates suggest lenders see real risk. At 7.3% and 10.8%, these rates are well above typical Korean acquisition financing costs, reflecting both the borrower's weakened fundamentals and the uncertainty around exit timing.
Anchor PE has cycled through multiple exit strategies — a full sale, subsidiary carve-outs, an IPO for Danbi Education, partial share sales — and none has materialised. Creditor opposition over spin-off structures and valuation gaps between buyers and sellers have blocked deals. With the clock now ticking on another short-dated refinancing, the pressure to find a resolution only intensifies.
The signal: This deal illustrates a broader pattern in Asian private equity: ageing portfolios that funds cannot exit cleanly. When market conditions sour and asset performance declines simultaneously, GPs face the unenviable choice between selling at a steep discount or refinancing at punishing terms to buy more time.
South Korea's education sector — once considered a defensive, cash-generative bet — is being reshaped by demographics and digital disruption. For PE investors, what looked like a stable yield play a decade ago now looks like a value trap with shrinking revenues and mounting losses.
Read more: The Chosun Daily
