Cherry Tree & Associates | April 2019 | Volume XIII, Issue 10
 2U will Acquire Trilogy Education for $750 Million

Trilogy Education, which helps set up and run short-term coding programs at university extension schools, will be acquired by 2U (Nasdaq: TWOU) for $750 million (7.7x 2018 revenue). The deal is expected to close in the 2 nd quarter of 2019 and includes $400 million in cash and $350 million in 2U common stock. Trilogy Education was founded in 2015 and claims to serve 50 schools and 20,000 students. Combined, 2U and Trilogy claim they will serve 68 universities and more than 150,000 students
Adtalem to Acquire OnCourse Learning’s Financial Services Business for $121 Million

A dtalem Global Education (NYSE: ATGE), a workforce solutions provider, will acquire the financial services division of OnCourse Learning, a provider of compliance training, licensure preparation and other professional development. Total consideration for the transaction is $121 million (3.9x 2018 revenues of $31 million). In 2018, the financial services division of OnCourse Learning reportedly delivered EBITDA margins over 30%.
Hoonuit Acquires Mizuni

Minneapolis-based data management and analytics software provider serving educational institutions, Hoonuit, has acquired Mizuni, a data warehousing and visualization provider serving the K-12 market. The combined companies claim they will service more than 13 million students across 1,500 educational institutions
Coursera Raises $103 Million

Massive open online course provider, Coursera, raised $103 million in a series E round of funding led by Seek Group. Future Fund and NEA participated in the round brining Coursera valuation over $1 billion. Coursera reportedly delivers online courses to 40 million students.
Triplebyte Raises $35 Million

Triplebyte, the platform that uses coding quizzes and machine learning to match workers with jobs, raised $35 million led by YC Continuity, Y Combinator’s investment fund. Triplebyte has raised a total of $48.1 million.

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CampusLogic Acquires Funderbolt 

CampusLogic, the student financial success platform, acquired Funderbolt, a software company focused on accelerating colleges student fundraising. CampusLogic will re-brand the software as SponsoredScholar. CampusLogic claims to service over 500 schools and 3 million students.
Noggin Acquires Sparkler 

Pre-schooler focused streaming service, Noggin, acquired Sparkler, the early childhood learning platform. Noggin will integrate Sparkler technology into its platform. Noggin claims to feature over 1,500 full-length video episodes and Sparkler.
Certica Acquires TE21

Certica Solutions, the edtech platform-as-a-service behind Certica Connect, acquired TE21, provider of the CASE Benchmark Assessments. The CASE benchmarks are reportedly used by more than 250 districts across the Southeast.

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Modo Acquires Ulyngo

Modo Labs, the no-code mobile app development platform, acquired Ulyngo, the company enabling and securing student and campus commerce. Ulyngo will expand the capabilities of the Modo Campus solutions and will facilities safe and authenticated transactions between students, student organizations, university departments and more.
Nearpod Acquires Flocabulary 

Flocabulary, the company that fuses hip-hop with educational content in music videos and instructional activities, has been acquired by Nearpod, a platform helping educators get digital content to students’ devices. The combined companies claim to reach more than 7 million students.
MyVillage Raises $5.95 Million

MyVillage, the startup working toward a solution for the nation’s early childcare crisis, has announced the closing of a $5.95 million seed round. Investors include Acumen, Better Ventures, Atlassian Foundation and Impact Engine, among others.

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Renaissance Acquires Early Learning Labs

Renaissance Learning, the pre k-12 education technology company backed by Francisco Partners, has acquired Early Learning Labs, a provider of early childhood assessment programs. Developed by researchers and educators at the University of Minnesota, Early Learning Labs’ early childhood assessment program, myIGDIs, helps early childhood educators identify children at risk of poor learning outcomes early and monitor development goals often.

Cherry Tree Managing Directors Chad Johnson and John Bergstrom were founding investors and Board members of Early Learning Labs.
Instructure Acquires MasteryConnect for $42.5 Million 

Instructure (NYSE: INST), maker of the Canvas and Bridge learning management systems, has agreed to acquire MasteryConnect for $42.5 million. MasteryConnect offers a platform where teachers can plan lessons, deliver assessments and track student performance. MasteryConnect claims to be used in over 14,000 school districts. $12.3 million of the $42.5 million total consideration will be paid in common stock of Instructure.
Gaosi Raises $140 Million

Gaosi Education Group, a Beijing-based education service provider, has raised $140 million in a series D funding round led by Warburg Pincus. Gaosi offers online live streaming courses teaching Chinese, English, math, history, chemistry and physics and has raised over $286 million to date
Onion Mathematics Raises $44.5 Million 

Yang Cong 345, the Chinese K-12 education platform commonly known as Onion Mathematics, raised $44.5 million in series D funding led by Primavera Capital. Onion Mathematics is backed by Tencent and has raised about $89.0 million. It reportedly has serves over 20 million students across 150,000 primary and secondary schools.
Zovio (formerly Bridgepoint Education) Acquires TutorMe

The owner of the for-profit school, Ashford University, Bridgepoint Education (now known as Zovio, Nasdaq: ZVO), acquired TutorMe. TutorMe is a provider of online tutoring services that connect students with experts for live, one-on-one sessions. Zovio reports paying $4.75 million in consideration for TutorMe which includes $2.79 million in cash and $1.96 million in stock.
CollegeVine Raises $24 Million 

CollegeVine, the provider of high-school and college admissions advising, raised $24 million in series B financing from Maywood Street Investments, Fidelity Investments, Morningside Technology Ventures and University Ventures. CollegeVine claims to have helped over 10,000 students navigate their way into college.
Cluey Raises $20 Million

Edtech startup, Cluey, which provides data-driven technology designed to reimagine after-school tutoring, raised $20 million in series A funding. The round was led by Allectus Capital and the Thorney Investment Group.

Read more Acquired by Red Ventures, a provider of marketing and enrollment services to post-secondary institutions, has been acquired by Red Ventures, a portfolio of digital companies. Previously owned by The Vistria Group, a Chicago based private equity firm, claims to help over 150 university partners better reach prospective students across the country.
Parchment Raises $7 Million 

Parchment, the company that digitizes and distributes education credential records for education institutions, received a $7 million in growth capital from CIBC Innovation Banking. Parchment had reportedly facilitated over 30 million transcripts globally since 2003.
Declara Acquired by Futuryng

Declara, the AI-powered social learning platform, was acquired by Futuryng, an Italian blockchain IoT company that helps companies connect data systems.

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Legends of Learning Raises $3.5 Million

Legends of Learning, a maker of curriculum-based games, raised $3.5 million in their latest round. Investors were not disclosed, and Legends of Learning has now raised $9.5 million. Legends of Learning claims to have over 1,500 games that are offered in student libraries for grades three to eight.
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.
* EV= Enterprise Value
Like many of you, we had an incredibly informative, productive, and enjoyable trip to San Diego earlier this month for the ASU-GSV conference. We spent several days in back-to-back meetings with clients, prospective clients, groups who want to buy our clients, thought leaders, and friends new and old. 

One of the more thought-provoking conversations we had was about global growth. It was posited that many of the world’s leading technology firms, and the largest education investors, increasingly see the U.S. education market as mature and with little in the way of growth potential. Yet with plenty of obstacles. Instead, these parties are focusing on opportunities in large and growing markets such as China and India, with less rigid institutions and more openness to new approaches. One can’t argue with the investment evidence, especially among the Chinese-focused education companies raising hundreds of millions here in the U.S. See this recent article in Forbes as well describing the rise of Chinese Ed-Tech companies. 

It is intriguing to think what this means for investment in the U.S. market. While in the short term it could mean a lower supply of investment dollars overall, in the long term it could add another source of buyers of U.S. companies, to obtain their products and their people. 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.
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

Prepared by:
Chad Johnson, Managing Director and Partner | 952.253.6010

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.
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.