Cherry Tree & Associates | March 2020 | Volume XIV, Issue 9
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Blackboard Divests LMS Product for $31.7 Million to Learning Technologies Group
Blackboard, a Reston VA-based provider of learning management software has announced the divestiture of its Open LMS business to Learning Technologies Group (“LTG”). LTG sees opportunities from the acquisition to cross-sell its products with Blackboard, as existing clients can still access blackboard products that are already integrated with Open LMS. LTG paid $31.7 million for the Intellectual property and assets related to Open LMS.
prnewswire.com
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AcademyX Acquired by Lernit
AcademyX, a leader in technical upskilling, has been acquired by Learnit, a San Fransico-based, corporate training and instructor-led workshop provider. The acquisition of AcademyX is expected to grow Learnit’s portfolio of learning and development programs to improve services to existing clients and expand to new markets.
prnewswire.com
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Galileo Global Education Acquired by Several Investors
Galileo Global Education, the largest provider of higher education in Europe with additional higher education programs across the world, has announced that its majority partner, Providence Equity Partners, has sold its stake in Galileo to several global long-term institution investors, including the Canada Pension Plan Investment Board and Tethys Invest.
businesswire.com
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Authess Acquired by Elsevier
Authess, a Boston MA-based developer of advanced performance-based competency assessment platform for students learning to solve complex problems that can be encountered in work, has been acquired by Elsevier. Elsevier is a global leader in information analytics with an emphasis in science and health. Elsevier expects the acquisition to enhance their current solutions to help develop more competent, job-ready nurses.
elsevier.com
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Signal Kit Acquired by ParentSquare
Signal Kit, a provider of communications for school-home communications tools for K12 schools and districts, has been acquired by ParentSquare. ParentSquare has a similar operating model and with the acquisition will serve over 2 million students across 44 states.
prweb.com
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NewSchool Acquired by Ambow Education
NewSchool, a provider of architecture, construction management, product design, graphic design, interactive media, and interior architecture and design programs has announced that they have been acquired by Ambow Education Holdings Ltd. Ambow is a provider of educational and career enhancement services in China and the U.S.
newschoolarch.edu
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MyBuddy Merges with Edwin
MyBuddy, an AI-powered tutoring app that helps children through speaking exercises has announced a merger with Edwin. Edwin is a developer of an eponymous chatbot that also provides language instruction. MyBuddy is reported to have generated $140 thousand of revenue in January of 2020 from its user base of 17 thousand. Edwin claims to have approximately 800 thousand users in Latin America, Japan, and Korea.
edsurge.com
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Le Wagon Raises $19 Million
Le Wagon, a startup that provides a highly rated full-stack web development course has raised $19 million in funding. The round was led by Cathay Capital with AfricInvest participating. The Company has 38 campuses around the world and has stated that the funding from this round will be used to expand its course offering and campus locations.
techcrunch.com
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Preply Raises $10 Million
Located in London, Preply, an online learning platform that connects language tutors with students, has raised $10 million in funding. The round was led by Hoxton Ventures and included Point Nine Capital, All Iron Ventures, The Family EduCapital, and Diligent Capital. Preply plans to use to the funds to grow their tutor network to reach more students throughout the world.
prnewswire.com
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Coursedog Raises $4.2 Million
Coursedog, a software startup that is creating an operating system for universities to better schedule classes based on demand and student interest, has announced that they have raised $4.2 million from several investors, including First Round’s Josh Kopelman. Investors in the company also include FoundersX Venture, EFund, and Jinal Jhaveri, the former CEO of SchoolMint. The Company expects to serve 100 more universities in the next year and will utilize the funding to increase development.
techcrunch.com
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Vocabulary.com Acquired by IXL Learning
IXL Learning, a K-12 learning platform utilized by 8 million students, has announced the acquisition of Vocaulary.com, a provider of solutions that improve student literacy through vocabulary building. IXL Learning plans to leverage Vocabulary.com’s tools that provide seamless integration with school curriculum to reach more students.
prnewswire.com
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FamilyID Acquired by ArbiterSports
ArbiterSports, a leader in athletic and event management for over 35 years, has announced the acquisition of FamilyID, a platform of online registrations for schools and community programs. The acquisition of FamilyID will expand Arbiter’s existing offerings and market opportunities for associations, schools, athletic departments, and community programs.
businesswire.com
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RBA International Acquired by Moody’s Corporation
London based provider of online retail bank training and certification solutions, RBA International, has been acquired by Moody’s Corporation. The acquisition will compliment Moody’s analytics department which currently offers online and classroom-based training services, certification, and credentialing services.
businesswire.com
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Madgex Acquired by John Wiley and Sons Inc.
John Wiley and Sons Inc. (NYSE: JWA), a global leader in research and education, has announced the acquisition of Madgex, a provider of advanced job board software and career center services. Madgex has provided services to John Wiley and Sons since 2011 and influenced the evolution of their recruitment services.
businesswire.com
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Teachable Acquired by Hotmart
New York-based, Teachable, has been acquired by Hotmart, a global platform for online courses with a focus on Portuguese and Spanish markets. Teachable provides a marketplace for teachers to sell their online courses and allows them to create their own classroom business. Teachable is reported to have earned $21 million in revenue in 2019 and generated losses under $2 million.
techcrunch.com
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Torch Merges with Everwise
Torch, a C-suite educator with an emphasis on empathy, has announced that it will merge with Everwise, a peer-to-peer mentorship marketplace platform that provides workplace guidance to rank-and-file staffers. Prior to the merger, Torch raised $18 million in funding and Everwise raised $26 million.
techcrunch.com
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OneSmart Raises $25 Million from Yiheng Capital Partners
OneSmart International Education (“OneSmart”) has announced the issuance of a convertible note in a principal amount of $25 million from Yiheng Capital Partners. OneSmart is a K-12 education company in China, offering online and in-person classes.
prnewswire.com
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Talespin Raises $15 Million
Talespin, a developer of education programs for enterprises through virtual reality technologies, has announced that they have raised $15 million in funding. The round was led by Cornerstone OnDemand with participation from HTC and Farmers Insurance Exchange. The round brings the Company’s total funding to $20 million since founding in 2015.
venturebeat.com
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Boro Raises $12 Million
Boro, a provider of loans and financial education to students that have been excluded from traditional lending institutions, has announced completion of a $12 million series A funding round. Boro expects to utilize the funding to expand its offering to more colleges and universities in the U.S.
markets.businessinsider.com
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Leap Finance Raises $5.5 Million
Leap Finance, a startup that underwrites loans based on alternative data points to assess a student’s future income with an emphasis on Indian students in the U.S, has announced that they have raised $5.5 million in funding. The round was led by Sequoia Capital with participation from several individuals. The funding is expected to help the startup service Indian students in Canada, the U.K., and Indonesia.
techcrunch.com
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CHERRY TREE EDUCATION FOR-PROFIT 50 INDEX
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For-profit education comprises more than 5% of the roughly $1.3 trillion that is spent on education in the U.S. annually. Cherry Tree created the Education For-Profit 50 Index representing a group of publicly traded for-profit education companies.
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The For-Profit Education 50 Index consists of companies in the Pre-K-12, Postsecondary Education, Training and Development, and Education Products and Services segments for-profit education industry.
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As people around the world attempt to limit direct person-to-person interaction to slow the transmission of COVID-19, at Cherry Tree we’re praying for everyone during this challenging time, and strongly believe that health and family should be our primary concerns. We appreciate the sacrifices many are making, especially in the healthcare fields. A secondary concern is understandably the economy. Not in the interest of “corporate greed,” as a vocal minority on Twitter seems to think. But because people need jobs to provide for their families, many also find a sense of purpose in their work in for-profit and non-profits, and because businesses need customers to generate the money to pay their employees.
Rather than discussing what is happening in education technology, which finds itself in high demand with schools closed and distance-learning adoption cycles accelerating, we wanted to share what we’re seeing in terms of investing and M&A activity. This is after all, the Education Capital Markets newsletter. Our firm closed two transactions last week, has two more teed up to close this week, is continuing with several engagements in process, and is launching a new distance learning engagement this very week.
That being said, the straight scoop is that what we are hearing from buyers is mixed. Many M&A deals that were far along in the process are being completed, while others have been put on hold. Projects mid-process are typically slowing down, and new projects are generally being delayed until the cloud of uncertainty is lifted. Businesses with the most enduring business models are faring the best, and this definitely includes distance learning and consumer technology companies. Strategic buyers are in our experience the most likely to put M&A on hold as they focus on employees and customers. But private equity firms are working hard to try to position themselves with sellers to be ready to move quickly when normalcy returns, while also focusing extra time on their portfolio companies to ensure they get through this temporary challenge. Lenders are stating they are open for business, but their actions indicate they are taking a cautious, week-by-week approach to try to get a good handle on liquidity and ability to weather this downturn, whose time frame is still uncertain.
What does this mean for your business? That depends, of course. It isn’t an ideal time for many businesses, but since a process often takes 6-9 months, it isn’t necessarily a bad time to be preparing.
For a confidential conversation about your company’s needs to add capabilities and improve operations, or regarding strategic alternatives for exiting, merging, acquiring, obtaining venture financing, and how trends in education affect your prospects, please contact us at 952-893-9012.
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Prepared by:
Chad Johnson, Managing Partner
Follow me on Twitter @ChadEricJohnson
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Cherry Tree & Associates is a private investment banking firm headquartered in Minneapolis. Our firm specializes in serving middle market companies and their owners, whether private, public, or divisions of larger corporations.
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Important Disclosures
The information included in this publication has been obtained from public sources, and is not based upon private or confidential Cherry Tree information. Cherry Tree gathers its data from sources it considers reliable. However, it does not guarantee the accuracy or completeness of the information provided within this publication. Any opinions presented reflect the current judgment of the authors and are subject to change. Cherry Tree makes no warranties, expressed or implied, regarding the accuracy of this information or any opinions expressed by the authors. Officers, directors, partners of Cherry Tree and Cherry Tree proprietary investment funds may have positions in the securities of the companies discussed, and certain affiliates of Cherry Tree may recommend to specific clients the purchase and sale of securities discussed in the publication. This publication does not constitute a recommendation with respect to the securities of any company discussed herein, and it should not be construed as such. Cherry Tree or its affiliates may from time to time provide investment banking or related services to these companies. Like all Cherry Tree employees, the authors of this publication receive compensation that is affected by overall firm profitability. We undertake no obligation to update any information in this publication.
The Education For-Profit (EFP) 50 Index is a hypothetical index, and does not reflect an actual investment portfolio. Comparisons between the EFP 50 Index and the S&P 500 are for illustrative purposes only. Correlations in performance information for the EFP 50 Index and the S&P 500 should not be relied upon as indicative of risks involved in owning or holding a portfolio of securities similar to the EFP 50 Index. Past performance should not be relied upon as indicative of future performance.
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