The Banking Act: Everything you need to know

It’s a very meaty issue for you today as we head into a nice long weekend ahead of us: Prime Ministry Moustafa Madbouly confirmed yesterday that Sunday is off in observance of Armed Forces Day. The stock exchange will be closed, and the Manpower Ministry declared it will be a paid vacation day for both civil servants and private sector employees. Enterprise will be off and return to your inboxes at the usual time on Monday morning.

Banking Act inches closer to life: The Central Bank of Egypt will hold a press conference today to discuss a final draft of the Banking and Central Bank Act, which was approved by Cabinet yesterday, Al Shorouk reports. The act, which is yet to be reviewed by the Council of State before going to parliament, would expand the CBE’s oversight of the banking sector. We have the rundown in this morning’s Speed Round, below.

It’s PMI day: The purchasing managers’ index for Egypt, the UAE, and Saudi Arabia will be released shortly after we hit “send” on this morning’s issue. You can find the press release here when it arrives at around 6:15 am CLT.

Monthly inflation figures for September are due at the end of next week. Inflation cooled for the second consecutive month in August to 7.5%, marking the lowest reading in six-and-a-half years.

Among the conferences taking place in the coming days:

• The annual International Federation of Technical Analysts (IFTA) conference takes place in Cairo on Saturday and Sunday.
• A Russian delegation will be in Cairo on 7-10 October for a joint forum to discuss cooperation in various fields, including trade, Al Shorouk reports.

Further ahead: Go talk tech and investment on the Red Sea. The Vested Summit kicks off on 9 November at the Egyptian Resorts Company’s flagship destination, Sahl Hasheesh. The three-day event will bring together 1,500 participants from 25 countries to talk investment, technology, and generating impact with “conscious tech,” according to a press release (pdf). The summit’s main guest speaker will be Jason Silva, host of National Geographic’s Brain Games TV series.

US brokerage firms rocked as Charles Schwab ends commission on online trading: Share prices of US brokerage firms crashed on Tuesday after Charles Schwab announced it will scrap commissions on online trades of stocks, exchange-traded funds and options from 7 October, the Wall Street Journal reports. Schwab — the largest publicly-traded online broker in the US — saw its shares fall 9.4% on the news. Rival companies TD Ameritrade plummeted 25.8%, and E-Trade lost 16.4%. Brokerage firms are struggling to compete against a new crop of companies offering zero-fee online trading, which has triggered what investors fear will be a race-to-the-bottom price war that would wipe out a significant chunk of revenues.

JPMorgan banking on Middle East bond market growth: Bond sales in MENA countries have so far grown 11% y-o-y and could beat the record USD 101 bn reached in 2017. The surge is reason for optimism for the region’s investment bankers, who are also about to witness the world’s largest-ever share sale when Saudi Aramco hits the market, JPMorgan Chase global corporate banking head Sjoerd Leenart tells Bloomberg. The latest bond push: Saudi Arabia could be selling USD-denominated sukuk “as early as next month,” anonymous sources in the know told the information news service.

A few things going on around the world:

• The foreign press is marking the anniversary of Jamal Khashoggi's death, with the Washington Post, Financial Times and Bloomberg all among those giving it ink.
• Mark Zuckerberg isn’t having the best of weeks, threatening legal action if a future president wants to break up his company — and facing cold feet from the financial partners including Mastercard and Visa he had enlisted to help build his cryptocurrency.

To say that last night was quiet on the airwaves would be the understatement of the year:

El Sisi shows love to SMEs: President Abdel Fattah El Sisi inaugurated a handicraft exhibition yesterday as part of a national strategy to support SMEs, Al Hayah Al Youm’s Khaled highlighted (watch, runtime: 09:39).

Environment Ministry goes to Fayoum to promote tourism: The Environment Ministry has organized a Fayoum workshop in coordination with the United Nations Development Program (UNDP) and the Egyptian Italian Environmental Cooperation Program (EIECP) to support tourism in the governorate (watch, runtime: 03:01).

The government is working on ensuring graduates are qualified for modern-day jobs in Egypt and abroad, Higher Education and Scientific Research Minister Khaled Abdel Ghaffar told Masaa DMC’s Ramy Radwan in an interview (watch, runtime: 05:35).

LEGISLATION WATCH- Cabinet greenlights Banking Act: The Madbouly Cabinet has approved in its weekly meeting a 242-article final draft of the Banking and Central Bank Act that would grant the Central Bank of Egypt (CBE) increased oversight of the banking sector, according to a cabinet statement. The draft will now head to the Council of State before being introduced to the House of Representatives. As we noted in our legislative preview on Monday, the Banking Act is among the key bills expected to keep the House busy this fall. CBE Governor Tarek Amer, who was present during the cabinet meeting yesterday, handed over the act last May.

The CBE will hold a presser today to discuss the act, the final draft of which was seen by Enterprise.

No ‘industry development’ tax: The industry development tax, unpopular with investors and the banking community, has been set aside in favour of an industry-wide 1% tithe on profits to finance a bailout fund that would insure banks against bankruptcy. The act also lays out procedures for how banks would file for bankruptcy protection.

No term limits for MDs? The imposition of term limits for bank managing directors that had previously been controversial with the banking community and bank shareholders did not appear to be included in the draft we reviewed.

The law, if passed in the form we saw, would also:

• Introduce measures for licensing e-payment and fintech businesses and explicitly authorize the CBE to regulate cryptocurrencies;
• Update licensing and ownership regulations, with the inclusion of a stipulation that no one individual or a related group could hold more than 10% of a bank’s equity without prior approval of the central bank;
• Hike, as expected, the minimum capital requirement 10x to EGP 5 bn and 3x for foreign banks to USD 150 mn;
• Establish a “financial stability” committee to prepare for and avert financial crises. The prime minister, the CBE governor, the finance minister and the chair of the Financial Regulatory Authority would all sit on the committee;
• Set up an industry association for the sector. (It is unclear whether this is in reference to the Federation of Egyptian Banks or a new entity.)

• Introduce measures to ensure data protection and customer privacy, including requiring banks to obtain written consent for indirect or direct data dissemination;
• Require all banks’ fiscal years to begin in January (many state-owned institutions end their FY on 30 June, as does the government);
• Require banks to publish quarterly financials in at least one daily newspaper and on their websites;
• Give banks 1-3 years to comply with the new provisions of the law;

ALSO YESTERDAY- Cabinet signed off on a new unified tax payment system that will see MPs debating a bill to create a single tax filing system for income tax, stamp tax and VAT. The bill was first reviewed by cabinet in July. Ministers also signed off on an amendment to the Press and Media Actallowing media outlets to contribute to public-interest campaigns.

Egypt imposes 20% cap on foreign ownership of private schools: Education Minister Tarek Shawki imposed a 20% cap on foreign investor ownership of private schools, according to a decree seen by the press. The cap applies to all foreigners, including dual-passport holders, funds, entities and authorities. Investors will need to present documents outlining their ownership and won’t be allowed to sell any shares without prior approval. A similar cap was imposed on international schools last month, prompting concerns among school owners that the move would stifle investment. Private school owners have asked that both decrees be suspended pending dialogue between the ministry and industry stakeholders, and suggested discussions between the ministry and industry stakeholders.

HHD begins hunt for private partner to take over company management: Heliopolis Housing and Development (HHD) has invited private investors to qualify as eligible bidders to take over the state-owned real estate developer’s management and acquire a 10% stake as part of its share sale process, according to an EGX disclosure (pdf). HHD is lined up to sell up to 25% of its shares in a secondary offering on the EGX as part of the state privatization program. The sale will include a 10% stake that will be offered to either private equity firms or alliances of private equity firms and private real estate developers that will both invest in and manage the company’s day-to-day operations. To be qualified to submit a bid, the firm or alliance must have at least seven years of relevant experience, and financial and technical capabilities that are on par with “global standards.”

We already know that SODIC is interested, but was waiting to get more clarity on the offer terms before making a decision, SODIC CEO Magued Sherif told Reuters last month. No other companies have expressed interest, as far as we know.

Background: Shareholders approved the move at an extraordinary general assembly meeting in August. Public Enterprises Minister Hisham Tawfik recently told us that the sale will not take place before the end of the year pending the wrap-up of a handful of procedures. Tawfik told Masrawy around the same time that HHD is currently working on preparing a booklet of conditions for the offering. NI Capital, the state-owned investment bank managing the privatization program, was also scheduled to issue last month a tender to select the bookrunner for the offering.

M&A WATCH- OCI NV, ADNOC fertilizer merger done and dusted: Abu Dhabi National Oil Company (ADNOC) has completed its merger into Orascom Construction Industries (OCI) NV’s nitrogen fertilizers production MENA platform, the local press reported. OCI agreed in June to merge with ADNOC to set up an Abu Dhabi-based JV with a production capacity of 5 mn tonnes of urea and 1.5 mn tonnes of ammonia. This will make it the largest fertilizer producer in the MENA region. OCI will own 58% of the JV and ADNOC 42%. OCI boss Nassef Sawiris is expected to take up the position of CEO while UAE Minister of State and CEO of ADNOC Sultan Ahmed Al Jaber will be chairman.

Advisors: Matouk Bassiouny & Hennawy and Shearman & Sterling acted as local counsel and Citi as financial advisor to ADNOC. Cleary Gottlieb Steen & Hamilton LLP acted as legal counsel and JPMorgan as financial advisor to OCI NV.

M&A WATCH- Plot twist: Arab Dairy rejects buyout offers: Cheesemaker Arab Dairy has turned down “all the offers” it has received for a buyout, it said in an EGX disclosure (pdf), explaining that they did not match the “strategic vision” of its management or main shareholders. The company did not disclose any details about the offers, but said it “would prefer a strategic consortium with investors instead of completely exiting the company in light of how strong the industry is and its promising future outlook.” Arab Dairy is close to 70%-owned by Pioneers Holding, which had hired CI Capital to advise it on the sale

Background: Arab Dairy said last month that Netherlands-based FrieslandCampina had completed due diligence to acquire the company but that negotiations were still ongoing. The Panda cheese producer had given the Dutch company the green light to conduct due diligence to acquire 100% of its shares in June. UAE-based Gulf Capital also considered a move, but backtracked in July, saying their “strategy and expansion plans are not in line” with its investment mandate.

Israel to boost gas supply to Egypt: Dolphinus Holdings and the operators of Israel’s offshore natural gas fields Delek Drilling and Noble Energy have agreed to increase the supply of natural gas to Egypt by 34% to 85.3 bn cubic meters (bcm) under amendments to the landmark 2018 agreement, both Bloomberg and Reuters reported, citing an Israeli bourse statement.

What’s new? The value of the agreement is now USD 19.5 bn, up from USD 15 bn when the parties signed the original pact in February 2018. Exports from the Leviathan field will double to 60 bcm over 15 years and shipments from the Tamar field will fall to 25.3 bcm from 32 bcm. Gas shipments will begin flowing on 1 January 2020, through to 2034. The first three years will see a total of 2.1 bcm sold annually, before growing to 6.7 bcm a year after that. Oil Minister Tarek El Molla previously said the first shipment is on track to arrive by the end of the year.

The increased gas supply is not for export: The extra gas is going to prove useful over the coming two decades, in which time Egypt’s gas demand is expected to rise some 30%, with a supply shortage occurring in just five years, Bloomberg said, citing Wood Mackenzie research. The initial agreement had widely been seen as a way for Egypt to position itself as the East Mediterranean’s export hub, capable of shipping large quantities of the region’s LNG to Europe.

EMG pipeline ownership transfer this month: Delek, Noble, and Egypt’s East Gas have made 70% of a USD 520 mn payment to acquire a controlling stake in subsea Ashkelon-El Arish pipeline operator East Mediterranean Gas (EMG) through their joint venture EMED. The companies are expected to pay the remainder in the coming days, paving the way for the ownership transfer to be completed this month. Last year’s acquisition agreement, which both literally and figuratively provided the missing link for Israeli gas to flow into Egypt, received final approval from an Israeli antitrust regulator yesterday.

Some investors fear walk-back of economic reforms: Investors are concerned that the Egyptian government could resort to populist measures in response to the recent protests — measures that could derail progress on economic reform, Reuters reports. The story comes after the Supply Ministry on Tuesday announced that it would return 1.8 mn people to the subsidy rolls, a move which some have framed as an attempt to assuage economic discontent. A continuation on this path, analysts say, threatens to undermine the stabilizing measures undertaken over the past three years.

What they’re saying: “Investors are wary of the risk of fiscal slippage through the reversal of subsidy reforms or raising spending on public sector wages or cash transfers,” said Farouk Soussa, senior economist with Goldman Sachs, told Reuters. “The main risk is that any fiscal slippage could reduce the likelihood of Egypt coming to an agreement with the IMF over a new deal after the current one expires in November.” Ricciardo Fabiani, North Africa project director at the International Crisis Group, told Bloomberg that anything more than adjustments to the subsidies system risks increasing instability and scaring investors away from the country.

Ration card value to double: In other news, the House of Representatives will introduce draft legislation to double the value of ration cards to EGP 100 per person “as a gift from parliament to the great Egyptian people,” Deputy House Speaker Soliman Wahdan said, according to Al Masry Al Youm. Wahdan said he will try to speed up parliamentary discussions on the topic as well as coordinate with the supply and finance ministries so that the legislation can be passed as quickly as possible.

Long-delayed steel tariffs ruling takes its toll on local steelmakers: Egyptian steel companies have slashed prices as they struggle to cope with the uncertainty caused by the delayed ruling on the government’s imposition of tariffs on rebar and iron billets, S&P Global Platts reports. Ezz Steel cut its wire rod prices by more than EGP 1k to EGP 10.8/mt and its rebar prices to EGP 11,290 from EGP 11,500/mt. Elmarakby also knocked EGP 700 from its rebar prices to EGP 10,800/mt.

The courts are taking their time. The administrative court in July ruled against a decision by the Trade Ministry to impose a 15% import duty on iron billets and a 25% duty on rebar for 180 days. The ministry appealed the decision but the court has postponed ruling on the case three times since August. Two judges resigned from the panel for unknown reasons, resulting in the hearing being rescheduled twice inside a week. The court was then supposed to produce a ruling in September but again pushed it, this time to 5 October. The ministry is now proposing new 7% duties, which would be lowered gradually to 3% over a three-year period.

Tariff uncertainty isn’t the only thing hurting the industry. Steelmakers are facing lower market demand, which CI Capital’s Ahmed Soliman says us reflected in the performance of the cement industry. “Domestic steel demand seems to be deteriorating — this is a read across from cement demand figures (5-7% down year-to-date), which are highly correlated to steel demand,” he said. Increasing competition from imports is also depressing prices and making it harder for local companies to export. “Local mills can't compete in the local market without fair conditions with imports, we exported billets before but competing in export markets now might not be possible,” Ramy Saleh, chief business development officer at Elmarakby Steel, said.

DISPUTE WATCH- Emaar-El Nasr legal proceedings suspended for another four weeks: A freeze on legal proceedings between property developer Emaar Misr and state-owned El Nasr Housing has been suspended for another four weeks “with the purpose of reaching a settlement,” Emaar said in an EGX disclosure (pdf). The two sides had reportedly reached a preliminary agreement in September, which would have seen Emaar pay El Nasr financial compensation for failing to develop 3 mn sqm of land contracted to it in 2005. The settlement would have allowed Emaar time to complete the Uptown Cairo project.

Background: El Nasr brought the arbitration case against the local subsidiary of UAE-based Emaar in June 2017. The dispute also included a 500k sqm land plot, which Emaar was accused of using for construction instead of roadworks and green areas. Deputy Justice Minister for Arbitration and International Disputes Judge Moustafa El Bahabety had told Enterprise the settlement would see both sides drop all arbitration cases against each other and Emaar pay EGP 100 mn.

STARTUP WATCH- UAE’s Beco closes second VC fund: Beco Capital has closed its second startup fund at USD 100 mn, exceeding its initial USD 80 mn target, the Dubai-based venture capital firm said in a press release (pdf). Among those committing capital to the fund were Rimco Investment, the International Finance Corporation, Warba Bank and sovereign capital committed by Al Waha Venture Capital Fund of Funds out of Bahrain. The company specializes in investing in seed and series A stage tech startups, and providing follow-on capital to its best performing portfolio investments. Beco has to date invested in 22 companies through its two funds — including in household names Careem, Property Finder, and Vezeeta. It has also raised north of USD 1 bn in “follow-on capital,” led Swvl’s USD 8 mn landmark series A funding, and co-led e-commerce startup MaxAB’s recent USD 6.2 mn round.

Analysis of what prompted Egypt’s recent demonstrations is still dominating coverage in the foreign press,with Andrew England arguing in the Financial Times that the Ikhwan are too weak and fragmented as a movement to have any influence on Egyptian politics. Meanwhile, the protests were followed by hints of political reform and the prospect of reinstated food subsidies, Turkish outlet TRT World says. The Times, meanwhile took note of concessionary language from the president and yesterday’s decision to return 1.8 mn people to the subsidy rolls. And all of this is taking place within a wider regional context, argues Robert Malley in Foreign Affairs, who says the divide between the countries that support and oppose Islamism is the conflict most likely to define the region’s future. Amnesty, meanwhile, says more than 2.3k people have been detained since protests on 20 September; the Associated Press also has coverage.

UK companies to boost investment in human capital, healthcare, education, other sectors: British companies are planning to increase their investments to develop human capital in Egypt, company reps told Investment Minister Sahar Nasr at an investment forum in Cairo yesterday, according to a ministry statement. The companies, including GlaxoSmithKline, HSBC, Vodafone, Shell, and Unilever, said they want to focus on healthcare, education, renewables, and transport.

German wind energy company Senvion has retracted its bid in the tender for Lekela’s 250 MW Ras Ghareb wind energy plant because of financial difficulties, unnamed sources from the New and Renewable Energy Authority said, according to Al Mal. This leaves Siemens Gamesa and Denmark’s Vestas in the running for the project. The plant is expected to cost EUR 260 mn and will be funded by Germany's KfW bank, the European Investment Bank, the French Agency for Development, and the EU.

Gama Construction has been awarded a EGP 1.5 bn contract to construct Capital Group Properties’ Smart Village East Business Park on the Cairo-Ismailia desert road on a turnkey basis, according to a press release (pdf). Gama will be responsible for carrying out the civil, electromechanical, and finishing works for the project. Construction is set to start this year.

The New Urban Communities Authority has approved the master plan for Ora Developers and Gemini Global Development’s EGP 35 bn Zed Towers project in Sheikh Zayed, according to the local press. The 165-feddan project must be completed within 10 years, according to the authority’s decree.

Delivery app Glovo plans to invest EUR 5.1 mn in Egypt next year to expand in cities surrounding Cairo and Alexandria and launch marketing campaigns, co-founder Sacha Michaud told reporters at a press conference yesterday, according to Al Mal. Glovo is also expected to sign contracts with eight hypermarket brands next month. The company had suspended operations in Egypt for five weeks due to difficulties in funding and studying market demand, Michaud said, adding that the company is not planning to return to Chile or Brazil, two markets it has recently exited. The ECA had accused Glovo of a deliberate, anti-competitive arrangement when it began directing users to Otlob, the food delivery app owned and operated by Delivery Hero, which owns 16% of Glovo.

Ahmed El Kalla, founder of NFX Ventures: My Morning Routine looks each week at how a successful member of the community starts their day — and then throws in a couple of random business questions just for fun. Speaking to us this week is Ahmed El Kalla, founder of NFX Ventures, a venture capital fund that invests in tech-enabled platforms that support education beyond the classroom, throughout the world.

My name is Ahmed El Kalla, and I am an executive, a venture capitalist, and a disruptor (in the best sense). I am deeply focused on creating impact in two core areas: improving affordable access for people in emerging markets to quality education and healthcare. Technology is a very valuable mechanism for doing this, and my role is to help the right tech solutions grow and scale. I am a serial entrepreneur, and have approached this challenge in multiple ways throughout my career.

For the last three years, my full-time focus has been on NFX Ventures, the venture capital fund I founded to invest in AI and tech-enabled platforms that work on education beyond the classroom. We have close to 15 companies in our portfolio, and so a lot of my time is spent working directly with the CEOs, boards, and senior employees heading up these organizations.

Venture capital is the riskiest asset class, so the returns have to match the risk. As a VC firm, the returns we can offer are about three or four times what you would get if you put your money in the bank, on a per annum basis. This is essential to absorb the risk factor. Even in the most advanced ecosystems, such as Silicon Valley, only 2-3% of the portfolios of the best money managers will generate these returns, with the rest not really coming to anything. So it’s a very humbling industry to be working in. But the outsized returns we derive wipe out our losses.

My morning routine is simple and straightforward. I wake up, have a coffee, drive my kids to school, and then usually take an hour to listen to books on Audible. I rarely have time to read physical books, so I really enjoy absorbing more information by listening to something from my long playlist — either fiction or business, depending on my mood. But I am also an avid reader of Enterprise, which is my go-to publication for Egypt-focused news and opinions.

There are three great books I’ve listened to recently. The first is Principles, by Ray Dalio, founder of hedge fund Bridgewater Associates. It looks at his efforts to make sure that the company’s decision-making was enshrined in principles, so that the drivers of its growth from a very small company to now being the world’s biggest hedge fund would remain in its DNA, moving forward. This resonates well with all companies that want to scale.

My second recommendation is Thinking in Bets, by Annie Duke, a world class [card game] player, who distills some of the lessons she learned in [the card game], which are very applicable to business. One example of this is resulting. People often equate doing the right thing with getting the right outcomes, but sometimes despite your best efforts, the macro factors around you make it impossible to get the outcome you want. You can see this in practice in the education system: given the high demand for schooling, a school may be heavily subscribed (and therefore deemed successful) without necessarily being good.

[Editor’s note: We’re not being jerks about the “card game” above, but using its name angers the algorithms that decide whether we get delivered to your inbox or not.]

The third book — and my personal favorite — is called Reboot and it’s by Jerry Colonna. It looks at leadership, and particularly the way that workplace toxicity, including the behavior of angry, greedy or abusive bosses, is rooted in their childhood insecurities. He addresses leaders to help them understand how to uncover these issues, understand them and let them go. This touched me personally, because sometimes we aren’t fully aware of the impact we have on other people, and it can ripple through an organization to employees and customers.

I like to begin my working day around 8:30am with what I call deep work, where I spend two very focused hours finishing the things that really require depth of thought. After that, I might get pulled into meetings and all sorts of things, but my current priorities are on recruiting new talent and building a harmonious group of leaders within the organization, to ensure sustainability. This is when I’m in Cairo, as I travel about half the year for work.

People often think education lies within four walls, but there’s a lot of dynamic learning taking place beyond traditional structures, and I want to capitalize on this to better meet the needs of parents and students. So, at NFX Ventures, we invest in the most innovative ventures using tech platforms to solve educational problems throughout the world, and then try to cross-pollinate so that in time the solutions will be adapted to different markets.

We’ve invested in companies and platforms in China, Turkey, and Saudi Arabia with lessons to bring back home. In China, we invested in a company that works with the Chinese government, schools and tech hubs to make AI tools more available to students. China, like most advanced economies, understands the profound impact of AI on the job market and wants to build a cohort of students that engage with those tools from a very early age. It’s a new and niche field, and one that will lead to exciting possibilities. The Turkish company aims to alleviate the pressure on tutors to support the 1.5 mn students sitting the first national placement exam every year. Students that have a problem can take a picture of it with their phones, send it to the company, and within 10 minutes a tutor will help them find a solution, at a fraction of the cost of face-to-face tuition. And in Saudi, we have platforms addressing the issue of demotivation in students by shifting otherwise boring study time to a social setting, with their peers. If they have a problem when studying they can call a teacher through the platform. The approach has been shown to significantly improve their engagement.

Egypt is an excellent market facing many of the same needs, so we’re trying to help those companies launch here. Egypt’s K12 system currently produces 750k students aiming for university every year, but the number of children entering elementary school is closer to 2.1 mn. So there is currently three times the demand at the bottom of the pyramid as at the top. We simply don’t have enough universities or community colleges to accommodate all 750k students graduating every year, and just imagine what the situation will be in 10 years, if these numbers have tripled with the population boom.

So, alternative education — whether it’s homeschooling or tech-enabled platforms that allow children to move at their own pace — will become a necessity in the coming years. Limiting ourselves to education that takes place within four walls education means fighting a losing battle, as the numbers are outpacing us.

It will take some time for the market to adjust to this. Changing established practice is very hard and it takes years. People often think of “proper schooling” as a way of safeguarding their children’s futures, even if the quality of education is so-so. We need to try to reassure parents that alternative education can still result in good academic achievement and a job down the line. The model has already been proven with the popularity of online courses and MBAs.

We also need to remember that innovation can feel uncomfortable and this is very basic human nature. When it comes to homeschooling, for instance, a lot of families are not in a position to have their children at home all the time. So sometimes your solution directly collides with basic needs, and you have to be sensitive to this.

Ultimately, what we’re trying to do is augment the current school experience. The solutions we’re investing in, and the ones that will end up taking root in this market, are supplementing existing approaches. We’re not proposing to get rid of schools or traditional forms of education, and we’re not claiming to offer everything.