November 2017
Volume XII, Issue 5
Pearson Sells Wall Street English Business
P earson (LSE:PSON) has agreed to sell its China-based Wall Street English business to CITIC Capital and Baring Private Equity Asia for $300 million. It is reported that of this $300 million, $150 million will be retained in Wall Street English, while another $50 million will cover tax and net transaction costs. Wall Street English, which provides English language training services for adults, was purchased by Pearson in 2009 for $145 million
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Hero K12 Acquires SchoolMint
Hero K12, a provider of student behavior management applications for K-12 schools and districts, acquired SchoolMint, a school enrollment platform. Hero K12 recently received $150 million in funding from BV Investment Partners, and plans to use the funds to acquire companies and create integrated administrative solutions for schools. SchoolMint, which had raised $7.7 million prior to the acquisition, serves over 2 million students across more than 6,000 schools. Financial terms of the transaction were not disclosed.
Leeds Equity Partners Invests in Fusion Education Group    
Leeds Equity Partners, an education focused private equity firm, invested in Fusion Education Group, which operates several schools using a personalized education model. Fusion Education Group's schools, which total 43, educates over 4,000 students in grades 6 through 12 in 8 states and Washington, D.C. Financial terms of the transaction were not disclosed
Curriculum Associates Acquires Motion Math
Curriculum Associates, an education publishing company, acquired Motion Math, a developer of app and web-based instructional math games. This is only the second acquisition in Curriculum Associates nearly 50 year history. Financial terms of the transaction were not disclosed
ExploreLearning Acquires IS3D
ExploreLearning, which offers a suite of K-3 digital math and science simulation tools, has acquired Athens, Ga.-based IS3D, the developer behind online science software Cogent Education. Financial terms of the transaction were not disclosed
Ambow BSC Acquires Bay State College
Ambow BSC, a subsidiary of China-based Ambow Education Holding (OTCPK:AMBO) which provides education and career services to students, acquired Bay State College, a private for-profit college located in Boston. Bay State College has approximately 800 students and offers associate and bachelor degrees. Financial terms of the transaction were not disclosed
Springer Nature Acquires iversity
Springer Nature, a publisher of research and educational materials, acquired iversity, a Berlin-based e-learning platform that collaborates with over one hundred educational institutions and companies. The acquisition enables Springer Nature to expand the dissemination of its authors' research and educational materials via the e-learning platform. Financial terms of the transaction were not disclosed
Bristow Group Sells Bristow Academy
Bristow Group (NYSE:BRS), an industrial aviation services company, sold the Bristow Academy locations in Titusville, Florida, and Minden, Nevada. The Bristow Academy provides helicopter training services. Neither the purchaser nor financial terms of the transaction were disclosed
Wonder Workshop Raises $41 Million
Wonder Workshop, a company that offers interactive toy robots that teach children to code, raised $41 million in Series C funding. Madrona Venture Group, MindWorks Ventures, SoftBank Korea, Tencent Holdings, TAL Education Group, and VTRON Group participated in the round. The company has raised $78 million to date. Wonder Workshop's robots are used in over 12,000 elementary schools in the U.S
Panorama Raises $16 Million
Panorama, a company that provides data analytics services for K-12 educators, raised $16 million in Series B funding, led by Emerson Collective. Spark Capital, Owl Ventures, SoftTechVC, and the Chan Zuckerberg Initiative also participated in the round. Panorama, which has now raised $32 million, currently serves over 6,500 schools and 5 million students
BetterLesson Raises $10 Million 
BetterLesson, a professional development platform for K-12 teachers, raised $10 million in Series B funding. The round was led by Owl Ventures, with Reach Capital, New Markets Venture Partners, and the Michael and Susan Dell Foundation also participating. The company has now raised over $21 million
Lessonly Raises $8 Million  
Lessonly, a provider of employee training software for enterprise and corporate organizations, has raised $8 million in a Series B round led by OpenView. Rethink Education, High Alpha Capital, and Allos Ventures also chipped in. Over one million people have received training from Lessonly's platform
HopSkipDrive Raises $7.4 Million 
HopSkipDrive, a provider of ridesharing services to get children to and from school, raised $7.4 million in Series A funding. The round was led by Student Transportation Inc. (TSX:STB), and also included Upfront Ventures and FirstMark. HopSkipDrive, which gets kids to and from 2,500 schools across California, has now raised $21.5 million
SAM Labs Raises $6.75 Million 
SAM Labs, a creator of DIY toys and kits that introduce kids to programming concepts, has raised $6.75 million in a Series A round led by Touchstone Innovations and E15 Ventures. The London-based company has now raised over $11 million.
Kenzie Academy Raises $1.6 Million 
Kenzie Academy, a software engineering apprenticeship school in Indianapolis, raised $1.6 million in a seed round. Rethink Education, 500 Startups, and LearnStart all participated in the round. Kenzie Academy, which was launched in 2017, had not previously raised funding
PandaTree Raises $1.5 Million 
PandaTree, a provider of foreign language tutoring services online, raised $1.5 million in a seed round. The round was led by Michael Dearing, who founded Harrison Metal. PandaTree has now raised $2 million
Upswing Raises $1.5 Million 
Upswing, an online tutoring and academic advising platform for students, raised $1.5 million. The round was led by Lumina Impact Ventures, and also included the Stanford Graduate School of Business, Rethink Education, and Village Capital. The company, which works with more than 70 universities, has now raised $3 million
Blue Canoe Learning Raises $1.4 Million
Blue Canoe Learning, an online English pronunciation education platform, raised $1.4 million in a seed round. The round was led by Kernal Labs. Blue Canoe Learning had not previously raised funding
Galileo Global Education Midco Agrees to Acquire European University Cyprus Ltd and Laureate Italy S.r.l. for €230 Million 
Galileo Global Education Midco, a Luxembourg-based subsidiary of Galileo Global Education Sari that provides higher education services, entered into an agreement to purchase European University Cyprus Ltd and Laureate Italy S.r.l. from LEI European Investments B.V. The size of the transaction is reportedly €230 million, and is expected to close in January 2018. European University Cyprus Ltd and Laureate Italy S.r.l. collectively generated €68.5 million ($81 million) in revenue and €13 million ($15.4 million) in operating income
IK Investment Partners Agrees to Acquire Studienkreis GmbH 
IK Investment Partners, a London-based private equity firm, agreed to acquire Studienkreis GmbH, a Germany-based tutoring services provider. Studienkreis GmbH serves primary and secondary school students through a network of 1,000 learning centers. Financial terms of the transaction were not disclosed
Kano Raises $28 Million 
Kano, a London-based producer of coding kits for children, raised $28 million in Series B funding. Thames Trust and Breyer Capital led the round, with participation from Index Ventures, the Stanford Engineering Venture Fund, LocalGlobe, Marc Benioff, John Makinson, Collaborative Fund, Triple Point Capital, and Barclays. Kano plans to use the funds to put its product into 4,500 stores in time for the holidays. The company has now raised nearly $45 million
The Digital Marketing Institute Receives €26 Million Investment from Spectrum Equity 
The Digital Marketing Institute, an Ireland-based provider of online courses and certifications for digital marketing and sales professionals, received €26 million in funding from Spectrum Equity, a Boston-based growth equity firm. The company plans to use the funds to expand its learning and certification programs. To date, over 18,000 professionals in 115 countries have completed courses offered by the Digital Marketing Institute
MC Monthly Commentary

If at first you don't succeed... blame someone else? This month we explore the concept of effort and grit. We think the importance of grit is self-evident: of course it matters, when defined as "perseverance and passion for long-term goals," to quote Angela Duckworth.
Part of the concept of teaching grit, is teaching learners to apply themselves. But part of the concept is teaching them to believe in and trust the process of applying themselves. Showing them that they shouldn't always expect to understand and master a concept immediately, while reminding them that they've overcome other frustrations and that they can master whatever current problem they face.
With this in mind we were fascinated by a recent article describing a study showing that U.S. students made a marked improvement when offered financial incentives prior to taking a high-stakes test, but Chinese students didn't. Economists offer this as evidence that U.S. students are not trying their hardest, and that our persistently lagging test scores relative to other countries may have more to do with effort than ability. Many have argued that we don't expect enough of our students today, and this study supports that idea.
There is much technology can do to make us more productive, and to advance education through individualization. And all children need and deserve support and a safe learning environment. But we can't forget that success (which we define as personal fulfillment and fully developing the unique talents we are each given, not necessarily financial success) depends on both ability and effort. And on the personal work of teaching, listening, believing in students, and challenging them to be their best self.
For a confidential conversation 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.

Education For-Profit 50 Index
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 .
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.

Postsecondary Education
Training  and Development
Education Products and Services Providers
EV*/Revenue = 1.7x
EV*/Revenue = 1.3x
EV*/Revenue = 1.5x
EV*/Revenue = 1.5x
EV/EBITDA = 11.2x
EV/EBITDA = 7.9x
EV/EBITDA = 10.9x
EV/EBITDA = 13.0x
3-Yr Rev Gr = 2.8%
3-Yr Rev Gr = -3.4%
3-Yr Rev Gr = 1.9%
3-Yr Rev Gr = 1.4%
EBIT Margin = 13.0%
EBIT Margin = 6.7%
EBIT Margin = 5.2%
EBIT Margin = 7.2%

* EV= Enterprise Value

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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.