Cherry Tree & Associates | July 2021 | Volume XV, Issue 13 |
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Duolingo Goes Public
Duolingo, the language learning app, raised $521 million in an IPO that values the Company at about $3.5 billion. Duolingo will be listed on the Nasdaq and use the ticker “DUOL”. The Pittsburgh-based company was started by two engineers, Luis von Ahn and Severin Hacker, who will each have about 15% of the shareholder voting power in the company after the IPO. Prior to its IPO, Duolingo had raised $183 million in venture capital from firms including NewView Capital (20.1% pre-IPO stake), USV (14.2%), CapitalG (13.7%), Kleiner Perkins (10.5%) and General Atlantic.
bloomberg.com
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PowerSchool Goes Public
PowerSchool, the education software company best known for its K-12 Student Information System (SIS) platform, raised $710 million in an IPO that values the Company at around $4.5 billion. PowerSchool will be listed on the NYSE using the ticker “PWSC”. PowerSchool helps schools and districts manage state reporting and related compliance, special education, finance, human resources, talent, registration, attendance, funding, learning, instruction, grading, assessments and analytics in one unified platform. PowerSchool reportedly supports over 45 million students globally and more than 12,000 customers, including 93 of the top 100 districts by student enrollment in the United States.
businesswire.com
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Learning Technologies to Acquire GP Strategies
Learning Technologies Group (AIM:LTG), a digital learning and talent management solutions provider, has announced it will be acquiring GP Strategies, a workforce transformation and development strategy consultant, for $394 million which values GP Strategies at 0.9x LTM revenue and 10.6x LTM EBITDA. Learning Technologies plans to leverage GP Strategies to better serve the growing workforce development and talent management industry.
prnewswire.com
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DreamBox Acquires Reading Plus
DreamBox, an online math learning program for K-8 students, has acquired Reading Plus, a digital literacy program for K-12 students. The acquisition complements Dreambox’s recent acquisition of Squiggle Park, a K-2 reading solution designed to help students gain proficiency in early learning. DreamBox is reportedly used by over 200,000 educators in all 50 states as well as the District of Columbia, Puerto Rico, Canada, and Mexico.
dreambox.com
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Weld North Education Acquires Twig Education
Weld North Education, a digital curriculum provider with a full suite of assessment and learning resources products, has acquired Twig Education, a STEM curriculum developer for Pre-K to Grade 5 students. The acquisition delivers on Weld North Education’s intention to expand its digital core curriculum offerings. Today, Twig claims to have over 30% share in the elementary Science market in California.
businesswire.com
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Vista Higher Learning Acquires Wiley’s World Language Portfolio
Vista Higher Learning, a world languages textbook and content provider for K-12 schools and higher education, has acquired the world languages portfolio of Wiley, a global education publishing company. Wiley reports the divesture will allow them to better focus on their core disciplines of preparing students for careers, while Vista Learning looks to expand its solutions for language learning in both K-12 and higher education.
vistahigherlearning.com
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Pluralsight Acquires A Cloud Guru
Pluralsight, a workforce development platform for workers in the technology industry, has acquired A Cloud Guru, a training and certification platform specifically for cloud applications. A Cloud Guru creates learning tools for both individuals and organizations to stay ahead of the technology curve and claims to have served over 2.5 million learners and over 4,500 organization.
prnewswire.com
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Class Raises $105 Million
Class, the provider of virtual classroom software built on top of Zoom, raised $105 million. SoftBank Vision Fund II led the round while GSV Ventures, Emergence Capital, Reach Capital, Owl Ventures, Insight Partners and Learn Capital participated. Class, which was founded in 2020, has raised $180 million to date.
prnewswire.com
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OpenSesame Raise $50M
OpenSesame, an online workforce training and development course provider, announced it has raised $50 million in growth funding led by JMI Equity. The company reported seeing a surge in demand for its courses as COVID-19 forced companies to rethink training. OpenSesame intends on using the funds to expand globally through product-led M&A.
opensesame.com
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Sololearn Raises $24M
Sololearn, an online coding boot camp, has raised $24 million in its Series B funding round led by Drive Capital, with participation from investors from its previous $1.2 million Series A round in 2016. Sololearn claims to have over 21 million users across its ~25 curriculum categories, including Python, JavaScript, Java, C++, HTML and SQL.
techcrunch.com
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Otter Raises $23M
Otter, a marketplace platform for childcare, has raised $23 million in a Series A funding round led by Sequoia Capital. Andreessen Horowitz, previously leading the seed round, also participated in this latest round of funding. Otter plans to use the proceeds to enhance the trust and safety measures of its current marketplace platform.
forbes.com
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Unibuddy Raises $20M
Unibuddy, a peer-to-peer student recruitment platform for higher education, has raised $20 million in its Series B funding round led by Highland Europe, bringing the total amount raised to $32 million. Since starting in 2017, Unibuddy claims to have served over 770,000 students from more than 180 countries.
globenewswire.com
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Instructure Goes Public
Instructure, the creator of the Canvas learning management system (LMS), raised $250 million after going public on the NYSE, valuing the Company at about $2.9 billion. Instructure first went public in 2015, but was then taken private in March 2020 for $2.0 billion by Thoma Bravo, a private equity firm. Thoma Bravo still owns the majority of shares in Instructure and says it plans to use the proceeds towards paying down a portion of its $775 million term loan.
marketbrief.edweek.org
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Articulate Raises $1.5B
Articulate, an e-learning content creation platform for companies to use for employee training, has raised $1.5 billion in its Series A funding round. The SaaS platform is reportedly used by the entire Fortune 100 and over 100,000 other companies. Its $1.5 billion, it’s one of the largest series A rounds ever, and values the Company at $3.75 billion. Notable backers include General Atlantic, Blackstone Growth and Iconiq Growth. A typical enterprise would use Articulate to train various departments and employees on a new product and the platform allows enterprises to a track analytics regarding engagement with various training courses.
venturebeat.com
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KKR to Acquire Teaching Strategies
KKR, a global private equity firm, has acquired Teach Strategies, an early childhood teaching and assessment solutions provider, from Summit Partners. KKR will be acquiring the Company through its Core Investments strategy, which represents capital with a longer-term investment horizon. Teaching Strategies was founded in 1988, and is the largest provider of comprehensive ECE solutions for holistic child development.
tipranks.com
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Blackstone to Acquire Simplilearn for $250M
Blackstone, a private equity firm based in New York, is acquiring a majority stake in Simplilearn, an online coding and technology boot camp, for $250 million. The 11-year-old startup, which claims to run 1,000 live classes each month, says it has helped more than 2 million professionals and 2,000 companies, including Facebook, Microsoft, and Amazon across 150 countries.
techcrunch.com
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Curriculum Associates Acquires Mentoring Minds
Curriculum Associates, an instructional material and assessment developer for schools and teachers, has acquired Mentoring Minds, a classroom curriculum and assessment provider for K-12 schools. Curriculum Associates plans to migrate Mentoring Mind’s product, ThinkUp! Standards Mastery System, to its new digital environment preceding the 2021-22 school year.
mentoringminds.com
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Byju’s Acquires Epic
Byju’s, an online learning ed-tech company based in India, has acquired Epic, a U.S. digital library platform for kids to improve reading literacy. The recent acquisition follows Byju’s strategy to expand its presence within the United States. Currently, Byju’s claims to have a presence across 90% of elementary schools in the U.S. and has amassed more than 2 million teachers and 50 million kids (up from 20 million last year).
techcrunch.com
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Skillsoft Acquires Pluma
Skillsoft (NYSE:SKIL), a platform for online training courses, has acquired Pluma, a digital coaching platform, for approximately $22 million in cash. The acquisition of Pluma deepens Skillsoft’s Leadership Development Portfolio and adds a new modality to its blended learning model. Pluma was founded in 2015, and has partnerships with Fortune 1000 clients including, Adobe, Dropbox, and Gap Inc.
businesswire.com
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Ready Education Acquires Collabco & StuComm
Ready Education, a US-based student engagement platform for higher education institutions, has acquired European companies, Collabco and StuComm. The acquisition follows Ready Education’s vision to improve student success in higher education worldwide.
prnewswire.com
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PSG Invests in SchoolStatus
SchoolStatus, a data analytics and communications tool to engage parents and students with administrators and teachers, has received an investment from PSG, a growth equity firm specializing in middle-market technology-enabled services companies. The investment by PSG seeks to accelerate growth and innovation of its widely known communication platform, a tool that integrates key student data in order to increase communication among educators, district administrators, and student families.
businesswire.com
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Paper Raises $100M
Paper, an online platform offering unlimited 24/7 tutoring to students, has raised $100 million in its Series C round led by IVP. Returning investors include Framework Venture Partners, Reach Capital, Salesforce Ventures, and others. Paper reported growth in the number of students, increasing from 50,000 to one million. Paper plans to use the proceeds from the financing round to invest in its Educational Support System (ESS).
globenewswire.com
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LearnWorlds Raises $32M
LearnWorlds, a no-code platform allowing instructors and content creators to create and sell online courses, has raised $32 million in funding from private equity firm, Insight Partners. LearnWorlds intends on using the new funds to double its staff and expand internationally outside its existing headquarters in Greece and Cyprus. Since its inception in 2014, LearnWorlds claims to have served more than 4,300 customers in over 120 countries.
insightpartners.com
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Full Measure Education Raises $10M
Full Measure Education, a marketing and recruitment platform for higher education admissions, has raised $10 million in a Series B growth equity round led by Fulcrum Equity Partners. Full Measure Education plans on using the funds to hire additional talent to expand its current platform and product offerings. In 2021, they claim to have already welcomed over half a million new students into its engagement platform.
prweb.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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The education market was almost as hot as the weather in July. The IPOs of Duolingo and PowerSchool were particularly interesting in getting a better understanding of how ed tech companies build durable scale (same with Coursera’s in March). It was exciting to see the support these companies are getting in the public markets.
A couple of other things we’re watching closely are:
- The current state of federal student loan management is a catastrophe. The government is moving toward restarting federal student loan repayments and two servicers who manage millions of student loan have told the federal government they are no longer going to work with them. One of the servicers is entirely responsible for the Public Service Loan Forgiveness Program. The idea that the federal government and the remaining loan servicers can smoothy restart loan repayments while simultaneously transferring millions of loans to different servicers seems unlikely. The most likely scenario is that the government will simply continue to defer payments. The implications of this pending debacle for borrowers and institutions could be significant.
- Public investment in the K-12 space is an arrow pointing upward. This is an exciting time for businesses with channel into districts and the ability to grow with the market. We are also seeing the pace of innovation accelerate dramatically. Districts that had been hesitant to innovate were forced out of their comfort zone during the pandemic. At Cherry Tree, we’re especially excited about advances we’re seeing around data and analytics. By using shorter assessments and digital resources that track progress at a granular level, educators, administrators, policy makers, and parents have a much better record of what students are doing, what they are learning and where they need help.
We’re going to be writing more about this in coming months.
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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Prepared by:
Mike Buttry, Senior Executive Director
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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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