Testing Giant Shops GRE and Toefl Exams for Around $500 Million
Industry has faced pressure since pandemic, when many universities made exams optional
- ETS, owner of the GRE and Toefl tests, is in discussions to sell the exams or find one or more strategic investors.
- In 2024-25, about 200,000 people took the GRE, down from more than 350,000 in 2020-21, according to ETS.
- Interested parties include the Singapore-based investment firm Hillhouse and the private-equity firms Nexus Capital and Veritas Capital.
ETS, a nonprofit that owns the GRE and Toefl tests, has held talks to sell the exams or find one or more strategic investors, according to people familiar with the matter.
While the GRE has been a pillar of admissions to graduate programs for nearly a century, the number of people taking the exam has fallen in recent years as universities made it optional. The Toefl, used by U.S. universities to assess international applicants’ English-language proficiency, has faced rising competition.
President Trump’s campaign to shake up higher education is placing additional pressure on the exams. He has moved to limit international enrollment at U.S. universities, which affects foreign speakers and international-heavy graduate programs.
ETS Chief Executive Amit Sevak declined through a spokesperson to comment.
The nonprofit, based in New Jersey, has narrowed the talks to several firms that could potentially buy the exams or act as a strategic investor to expand ETS’s reach into the Middle East and India, said people familiar with the matter.
Interested parties include the Singapore-based investment firm Hillhouse, the private-equity firms Nexus Capital and Veritas Capital and the education entrepreneur Martin Basiri, some of the people said. Elysium Management, the family office of Apollo Global Management co-founder Leon Black, had been in talks with ETS but is no longer engaged, said a person familiar with the matter.
ETS has been seeking bids of around $500 million, some of the people said.
Hillhouse, which got its start managing money for Yale University’s endowment, was long a favored way for U.S. endowments and foundations to get investment exposure to fast-growing technology companies in China. Geopolitical friction between the U.S. and China has led its founder, the onetime Yale endowment intern Lei Zhang, to emphasize the firm’s global investment reach and cultivate a broader client base outside the U.S. in recent years.
Hillhouse’s discussions with ETS have been fluid. The talks have also included the possibility of Hillhouse’s joining with a U.S. investor or investors, said people familiar with the matter.
More recently, the talks have focused on whether Hillhouse, potentially with one or more partners, could invest in the commercial arm of ETS to help it expand the markets in which it offers the GRE and Toefl. Under this scenario, Hillhouse wouldn’t buy the tests or have access to test takers’ data, one of the people said.
The testing industry has faced significant pressure since the pandemic, when many universities made the GRE exam optional. In 2024-25, about 200,000 people took the GRE, down from more than 350,000 in 2020-21, according to ETS.
The Toefl, which long dominated testing for English-language proficiency, has faced competition in recent years from Duolingo, which offered a test that students could take from home during the pandemic. Toefl exams are generally taken in testing centers.
Private-equity firms in recent years have made moves into the education sector. Nexus has investments in the ACT, a college-entrance exam taken by millions of students, and Ruffalo Noel Levitz, an enrollment-management firm.