Show simple item record

dc.contributor.authorHanssens, Rachel
dc.contributor.authorVan Ruiten, Isabelle
dc.contributor.authorWauthier Eléonore
dc.date.accessioned2022-04-28T07:16:50Z
dc.date.available2022-04-28T07:16:50Z
dc.date.issued2021
dc.identifier.urihttp://hdl.handle.net/20.500.12127/7047
dc.description.abstractSofina is a Belgian family holding founded in 1889 with a net asset value (NAV) of €8.9bn. It is listed on Euronext Brussels and is also part of the BEL20 since 2017. The uniqueness of Sofina lies in its patient capital, its established history as a family-owned investment company and its key partnerships with worldwide investment leaders. The firm has a global reach with investments in Europe, Asia and the United States. Sofina deploys three investment styles to partner with companies across different phases of the business life cycle: long-term minority investments, investments in venture and growth capital funds and investments in fast-growing businesses. Through an optimal mix of participations in said styles, Sofina performed particularly well in 2020, with a shareholder return of 18% and a jump in NAV from €7.6bn in 2019 to €8.9bn in 2020. The holding has four focus sectors: Consumer & Retail, Digital Transformation, Healthcare and Education. For the latter, Sofina is now looking to gain a better understanding of the fastest growing segment: continuous learning. Though poised to grow by 203% by 2030, this space has been left untapped by Sofina to date. In light of these findings, Sofina has mandated a Vlerick In-Company-Project (ICP) team to identify the investment opportunities within the European continuous learning market. This project is positioned within the fast-growing business investment style. The global education market has undergone massive transformation and growth over the last years. From a value point of view, the industry more than doubled over the course of the last two decades, growing from $2.8tn in 2000 to $4.2tn in 2010 to $5-6tn today. According to HolonIQ projections, the industry is set to reach $10tn by 2030, implying a 4% CAGR between 2000-2030. Albeit a century-old industry, education grows at a faster rate than the GDP of most advanced economies. The education market can be segmented in multiple ways. The consensus in the literature is to differentiate between four learning stages: Pre-K, K12, higher education and continuous learning. Whilst only representing 6% of the global education market in 2019, continuous learning is poised to note most growth by 2030, doubling its market share value-wise to 12%. The continuous learning market’s growth is driven by the changing demand for skills which is in turn is driven by key trends that are shaping the need for reskilling and upskilling the existing workforce. This trend that further supports Sofina’s rationale to deep-dive into the continuous learning market. The primary driver of the changing demand for skills is the Fourth Industrial Revolution. The trend of digitisation, automation and the increasing use of data and artificial intelligence are changing the way business is done and live their day-to-day lives. These innovations are happening at a faster pace which is further fuelling the pre-existing skills mismatch. Not only the nature of work is changing, but also the workforce is shifting. On the one hand, there is the ageing population which increases the need for learning for older people to stay relevant within the current workforce. On the other hand, a shift in generations within the workforce will take place. Millennials and Gen Z attach great importance to learning and development opportunities in the workplace. Moreover by 2030, 80% of new jobs added to the European economy are considered to be high-skill intensive. Our research highlight that both IT skills and soft skills are expected to be required by the majority of the workforce within ten years. Therefore, we deep dived into the different subsegments within IT skills and soft skills as well as into the different learning methods that exist to teach those skills. The IT training market is worth approximately $70bn in 2020 split between data & software ($31bn), cybersecurity ($9bn) and IT infrastructure & cloud computing ($30bn). Based on our research, data/software training is delivered via different learning methods. Two delivery methods in particular, hands-on platforms and bootcamps, have been identified as well tailored for teaching advanced IT skills. Moreover, cybersecurity has also been highlighted as a universe for potential investment. Within cybersecurity, we distinguish between technical training and awareness training. Both markets show tremendous growth potential and attractive industry structure with a lot of new emerging companies. On the other hand, we noticed that the competitive landscape of IT infrastructure and cloud computing is dominated by a few big players such as Amazon Web Service, Google Cloud, Microsoft. Therefore, those markets are not interesting for Sofina because ultimately the holding would always have to deal with those huge tech companies as end suppliers. The soft skills training market is segmented in six learning methods: microlearning, short classes, medium classes, executive classes, coaching and mentoring & peer-to-peer learning. Among these methods, coaching has been identified as the most effective learning method for soft skills development and implies the the largest future potential. Based on data from the International Coaching Federation (2020), the total market size of coaching approximated $15bn in 2019, of which B2B with 65% accounts for the lion’s share. Given that the pricepoint for corporate coaching is often up to 3 times higher than B2C, it can be assumed that the actual market is potentially even larger. The prospects of the coaching market look promising. Coaching platforms enable to deliver coaching in a more scalable and affordable way. In addition, the online segment is projected to further grow on the back of democratised pricing of new coaching platforms. Our findings served as the basis for the ultimate deliverable of this In-Company-Project as they stipulated the rationale of our investment recommendation. We developed a universe-specific longlist, shortlist and profile one-pager of promising investment targets for the four selected universes: handson platforms, bootcamps, cybersecurity and coaching). We collected company names from industryspecific reports and enriched our list with players namedropped during expert calls and meetings with the Sofina education team. In total, 203 companies have been identified during this first screening. Those 203 companies constitute our longlist. Next, we shortlisted candidates based on five criteria set by Sofina: investment stage, presence of existing investors identified by Sofina as core or target investors, customer focus of companies (i.e., B2B was favoured to B2C), business model (i.e., pure players were favoured to multi-solution providers) and employee growth. We believe that these companies fit within Sofina’s investment strategy and are well-positioned to capture current and future value in the continuous learning space. The most suitable candidates not yet on Sofina’s radar have been profiled in 15 one-pagers. In conclusion, we recognise investment opportunities within the European continuous learning market in providers of IT training solutions (i.e. interactive platforms, bootcamps and cybersecurity) and providers of soft skills development (i.e. coaching). The team recommends Sofina to schedule more expert calls to further collect insights on the position of the 15 selected targets vis-à-vis other emerging players as well as industry incumbents. If favourable, the team suggests to establish first contact with the entrepreneurs to gauge investment interest.
dc.description.sponsorshipSofina
dc.language.isoen
dc.titleWhat are the investment opportunities within the continuous learning market in Europe?
dc.source.numberofpages170
vlerick.knowledgedomainAccounting & Finance
vlerick.supervisorLuypaert, Mathieu
dc.identifier.vperid132517
vlerick.companynameSofina
vlerick.companysupervisorFawe, Bertrand
vlerick.programmeMFM
vlerick.typebusresprojectIn-Company Project


This item appears in the following Collection(s)

Show simple item record