Cherry Tree & Associates | April 2022 | Volume XVI, Issue 10 |
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CeriFi Acquires MarkMeldrum.com
CeriFi, a Leeds Equity Partners portfolio company, acquired MarkMeldrum.com, a provider of exam preparation and review materials for levels I, II, and III of the Chartered Financial Analyst® ("CFA®") exam. MarkMeldrum.com prepares CFA® candidates globally by offering exam preparation materials, including lecture videos, question banks, practice guides and mock exams. MarkMeldrum.com represents the eleventh acquisition for CeriFi, a provider of premium financial education, training and certification solutions to the financial services industry.
prnewswire.com
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NexPhase Capital Invests in Aztec Software
NexPhase Capital, an operationally-focused private equity firm, made an investment in Aztec Software, an educational software company focused on the adult education and workforce training and certification markets. The investment is expected to support Aztec’s continued growth and expansion into adjacent markets, solutions and channels and position the Company to execute on its acquisition pipeline.
prnewswire.com
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Instructure Acquires Concentric Sky
Instructure (NYSE:INST), an education technology company supporting more than 30 million educators and learners globally, acquired its partner Concentric Sky, the makers of Badgr. Currently, Badgr is the default micro-credentialing tool within Canvas LMS and going forward it will be rebranded as “Canvas Badges” as it joins the Instructure Learning Platform.
prnewswire.com
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SchoolMint Acquires Enrollhand
SchoolMint, a provider of strategic enrollment management for K-12 education, acquired Enrollhand, a provider of highly-customized and personalized marketing solutions for K-12 schools and districts. Through the acquisition, SchoolMint expects to better help schools and districts attract and enroll more students and families and retain them for years to come. According to SchoolMint’s Chief Enrollment Officer, Nick LeRoy, “SchoolMint has long been seen as the leader in school enrollment, including strategic marketing and branding. With Enrollhand, SchoolMint is ready to offer this capability at scale.”
businesswire.com
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SensibleSchool Acquires Huntington Junior College
SensibleSchool, a wholly-owned subsidiary of Certell Inc., acquired Huntington Junior College, a regionally accredited private college located in Huntington, West Virginia. Founded in 1936, Huntington Junior College is ranked among the top six medical assistant schools and dental assistant schools in West Virginia. “What particularly attracted me this college is that if you read the mission statement, it says it has a global mission,” said Fred Fransen, Certell CEO and official Huntington Junior College President.
dailyadvent.com
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Openmind Learning Rebrands as Studio and Raises $50 Million
Educational startup, originally known as Openmind Learning, then Monthly, and now Studio, raised $50 million in funding, led by Human Capital with contribution from the likes of Airbnb co-founder Joe Gebbia. What was once Monthly, performed a domain name upgrade in late 2020, moving from LearnMonthly.com to simply Monthly.com. Under that domain, the company grew its brand, partnering with notable youtubers, such as Casey Neistat.
domainnamewire.com
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Newton School Raises $25 Million
Income sharing based online coding trainer platform Newton School has received $25 million in its Series B round led by Steadview Capital. The new round has come within 15 months for the Company which picked up $5 million in Series A led by RTP Global. Among the investors, Nexus has the largest stake in the company with ~25% holding followed by RTP Global and Steadview with ~15% and ~11% respectively.
entrackr.com
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Stravos Raises $15 Million
Stravos Education, a holding company for tutoring services, placement services, and academic preparation services, received a $15 million investment from Boathouse Capital, a Philadelphia-based private equity firm. The additional funds are expected to support the Company's acquisition pipeline.
bizjournals.com
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PDH Academy Acquires DermQBank
PDH Academy, an Eden Capital portfolio company and provider of exam preparation services, acquired DermQBank, a question bank and testing engine that allows its users to prepare efficiently and succeed on their dermatology board certification examinations and earn continuing medical education credits. PDH, through its delivery model, seeks to transform the typically fragmented exam preparation and continuing education experience and create offerings that serve professionals for the entire lifetime of their careers.
prnewswire.com
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Jenzabar Acquires Spark451
Jenzabar, a technology company serving higher education, acquired Spark451, a full-service marketing and technology firm providing enrollment strategies for the higher education market. The acquisition comes at a time when creative and modern enrollment strategies are critical for colleges facing declining student populations, shifting learner demographics, and other emerging challenges. Since 2011, Spark451 reports working with over 200 colleges and universities nationwide.
businesswire.com
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Alkido Pharma Invests in MasterClass
Alkido Pharma (NASDAQ: AIKI) secured an early equity interest in privately-held Yanka Industries, Inc., doing business as MasterClass. MasterClass is self-described as the “streaming platform where the world’s best come together so anyone, anywhere, can access and be inspired by their knowledge and stories. With an annual membership, members get access to 150+ instructors and classes across a wide variety of fields, including Arts & Entertainment, Business, Design & Style, Sports & Gaming, Writing and more.
prnewswire.com
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Brookes Acquires Caslon
Brookes Publishing, a provider of evidence-based assessments, textbooks, and training for professionals in early childhood, special education, and communication, language, and literacy, acquired the complete list of titles from Caslon Publishing, a publisher of books on multilingual language and literacy education. The acquisition is expected to enable Brookes to expand its offerings for teachers and other education professionals serving diverse learners.
prnewswire.com
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Securly Acquires Rhithm
Securly, the student safety and wellness provider and portfolio company of Golden Gate Capital, acquired Rhithm in a transaction that is expected to unite Rhithm’s social, emotional, and mental wellness assessments, content, and insights with Securly’s whole-student success platform to provide K-12 schools with the first comprehensive student wellness solution. Founded in 2019 and headquartered in Fort Worth, TX, Rhithm reports serving over 1.25 million students across 27 states.
businesswire.com
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Strivr Raises $35 Million
Strivr, the company behind an enterprise-focused virtual reality (VR) training platform used by big names such as Walmart, Verizon, and Bank of America, raised $35 million in an extension to it previously announced $30 million Series B round of funding. Founded in 2015, Strivr supports companies by delivering training through VR, including the software, content, hardware, and related services such as strategy and planning. Since Strivr’s original series B funding tranche two years ago, the Santa Clara, California-based company has acquired new customers such as MGM Resorts and Bank of America, the latter of which last year revealed it would be rolling out VR training to some 45,000 employees across 4,000 banks in the U.S.
venturebeat.com
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Galena Raises $16 Million
Galena, a Brazillian startup that propels young talents to access careers, raised $16.7 million in Series A funding. The investment was led by Altos Ventures, a global venture capital fund based in Silicon Valley. The new funds are expected to be deployed through key investments in technology, product development and talent acquisition. Galena intends to help propel 50,000 young people to the labor market in the next five years.
prnewswire.com
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AdmitKard Raises $3.3 Million
AdmitKard, an Ed-Tech platform that simplifies accessing higher education abroad, raised $3.3 million in its new round. This is the second round for the Noida-based company in a gap of nine months. Five-year-old AdmitKard helps students apply to more than 1,000 universities and colleges in countries including the U.S., U.K., Canada, Australia, and New Zealand.
entrackr.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 $1.5 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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Over the last year, we’ve heard versions of “if you see anything compelling in the adult skills training space, keep us in mind” enough times that it sometimes feels like it’s playing on a loop inside the Cherry Tree office. This accelerating interest in skills training businesses and platforms among strategic and financial buyers is being driven by a volatile labor market and the deteriorating value proposition of college degrees, especially for middle-skill jobs. The labor market will demand constant and effective upskilling and re-skilling, especially as the pace of job turnover increases. It’s one of the most interesting spaces in the education capital markets, but we’re early in the evolutionary cycle.
Current models in the very broad skills training market offer promise. There are brilliant minds and significant investments working on the opportunity. However, we often find that the difficulty of delivering these models is underappreciated. Many current skills training models are struggling to crack the code on providing repeatable solutions with attractive economics. There are a few reasons for this. First, it’s hard to provide meaningful, sticky learning in a low-cost delivery model. Second, technical competence is often only half the battle. Providers need to support learners through a wide variety of life challenges that get in the way of learning and then deliver capable employees who will persist. Finally, initial acquisition costs are often a challenge in these skills training models.
The models that break through these challenges are likely to be found in the niches of the labor market. We’re looking for models with a beachhead in the skills training space with favorable supply and demand dynamics where learning can be effectively delivered digitally or through a hybrid model and partnerships help support learners and lower acquisition costs. The opportunity for transformation in the non-degree skills training space is huge but it’s going to be a long road to get there. In the meantime, we’ll let you know if we see anything exciting.
About Cherry Tree & Associates:
Cherry Tree is a Minneapolis-based investment banking firm with more than four decades of transaction experience, with education being a primary segment focus. Our services include Sell-Side M&A where ownership wants to either realize their liquidity goals or desires to recapitalize their business to better position it for future growth. Additionally, we represent Buy-Side clients in efforts to add acquisitions to complement their organic growth efforts.
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For a confidential discussion about your company’s strategic alternatives for exiting, merging, acquiring, or obtaining venture financing, and how trends in education affect your prospects, please contact us at 952-893-9012. |
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Commentary by:
Mike Buttry, Managing Director
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Prepared by:
Chad Johnson, Managing Partner
Follow me on Twitter@ChadEricJohnson
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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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