Cherry Tree & Associates | April 2020 | Volume XIV, Issue 10
VidGrid Acquired by Paylocity

VidGrid, an edtech platform that enables peer-to-peer video learning courses, has been acquired by Paylocity, a provider of cloud-based HR and payroll software solutions. Paylocity has collaborated with VidGrid for several year to deliver a video-enabled learning management system for clients that allowed their users to utilize knowledge from subject matter experts.
Cornerstone Acquires Saba Software

Saba Software, a developer of talent experience solutions, has been acquired by Cornerstone, a global provider of development solutions for over 75 million users. The transaction value was announced at $1.395 billion but has decreased to $1.295 billion since then.
Thinkster Acquires SelectQ Corporation

Thinkster, a personalized tutoring company based in New Jersey, has announced that it will acquire SelectQ Corporation, an educational technology startup driven by AI. Thinkster expects to leverage the AI as a service to deliver highly personalized educational content through performance metrics. “Combining AI with the human intelligence of tutors, our offering brings the best tutors, data-driven insights and content to students to improve their learning, to enhance their analytical skills and to build a strong foundation - all at affordable price points,” – Raj Valli, CEO of Thinkster.
eLearning Brothers Acquires Trivantis and Edulence

eLearning Brothers, a platform of online courses in multiple fields, has announced an acquisition of Trivantis and Edulence. Trivantis is a provider of course-building tools, and Edulence is a learning management system provider. The acquisition will double the number of employees in eLearning Brothers from 55 to 100, expand their customer base, and deepen their sales relationships with some of their existing customers.
Lessonly Raises $15 Million in Series C

Lessonly, an online training platform, has announced the closing of a Series C funding round, raising $15 million in capital. The round was led by AXA Partners with additional participants Zendesk, Allos Ventures, Atlas Peak Capital, Rethink Education, and The Yard Ventures. Lessonly’s solutions have impacted the training of over 3 million users at more than 1 thousand companies.
Vedantu Raises $7 Million in Series C

Vedantu, an interactive online tutoring platform, has announced that they have raised $7 million in funding through an extended Series C round. The capital was invested by KB Global, a South Korean firm. Vedantu closed the initial Series C funding round earlier in April, raising a total of $12.5 million. Firms that participated in the round included Legend Capital and Ohana Holdings LLC.
Lingumi Raises €4.5 Million

UK-based Lingumi has announced the completion of a Series A funding round totaling €4.5 million. Lingumi was founded in 2015 as a pre-school edtech company that provides interactive English learning courses. The round was led by North Summit Capital and included participation from LocalGlobe, ADV, and Entrepreneur First.
Hone Raises $2.75 Million in Seed Funding

Hone, a training platform for modern teams, has announced the completion of a seed round totaling $2.75 million. This round brings the total capital raised by Hone to $6.4 million. Participants in the round included Firework Venture, NextGen Venture Partners, Cowboy Ventures, Harrison Metal, Slack Fund, and Reach Capital.
Peterson’s Acquires Wintergreen Orchard House

Peterson’s, a provider of test preparation and higher education data, has acquired substantially all the assets of Wintergreen Orchard House from Carnegie Dartlet. The annual undergraduate data collection will now be controlled by Peterson’s with the map, atlas, and College Finder products in its CollegeXpress division
Education Horizons Group Acquires Double First

A Melbourne, Australian-based company, Education Horizons Group, has announced the acquisition of Double First, an international school software provider based in Yeovil, England. Education Horizons reportedly serves over 1,900 schools and one million students across the world. Double First provides solutions for academic, marketing, administrative, and finance functions in schools.
Boxlight Acquires Robo3D and MyStemKits

Boxlight Corporation, based in Lawrenceville Georgia, has announced that it has acquired Robo3D and MyStemKits. Robo3D is a provider of 3D printers and MyStemKits manages an online collection of K-12 STEM curriculum for 3D printing. The transaction price for the companies was approximately $600 thousand in cash, assumed liabilities, and a note payable.
Strivr Raises $30 Million in Series B

Strivr, a developer of training solutions that leverage VR technology, has announced that they have closed a Series B funding round totaling $30 million. The round was led by Georgian Partners, a Canadian firm. This round brings that total funding raised by Strivr to $54 million.
BibliU Raises $10 Million in Series A

New York-based BibliU, a digital learning platform that provides e-books has announced the closing of a Series A funding round totaling $10 million. The round was led by Nesta Impact Investments with participation from Guinness Asset Management, direct investment clients of Stonehage Fleming, and ClearlySo. BibliU expects to continue to invest in the digital transformation of higher education institutions.
Frank Raises $5 Million

New York-based startup, Frank, a provider of financial advice services for students, has raised $5 million from Chegg (NYSE:CHGG) and several other investors, including Frank’s Founder and CEO, Charlie Javice, GingerBread Capital, and several previous investors. Frank expects the new economy impacted by COVID-19 to create some positive tailwinds for their operations as more students will require financial assistance.
Learn In Raises $3.5 Million in Seed Funding

Learn In, a startup that combines education, development, and training for employees that are on sabbatical, has announced that they have raised $3.5 million in seed funding from Album, GSV, and Firework Ventures. Learn In provides capabilities that enable companies to retain workers and train them instead of churning through employees to increase improve capabilities.
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
Last month we discussed the M&A and financing implications of the COVID-19 pandemic for companies in the education market segments more broadly, and this month we’ll dive into the business implications for higher education specifically. My colleague Mike Buttry is certainly an expert in the higher education market segment, having served as the head of strategy for Capella Education Corporation up through its merger with Strayer to form SEI. Mike and Cherry Tree will soon be publishing a research report on the impact of this crisis on higher education, and we wanted to provide our newsletter readers with a sneak peak of the primary takeaways: 

  • First and foremost, only growth mindsets among leadership will work in this environment  
  • College and university leaders should think more expansively about the value proposition of their institution
  • Institutions will not be able to plan on two critical elements which make business models work today: tuition increases and international enrollments
  • A greater premium will be placed on delivering student services as effectively and seamlessly as possible  
  • Higher education institutions are going to have to permanently reduce their fixed costs 
  • Colleges and universities will close, and small liberal arts colleges especially are at risk
  • We will likely see a short-term increase in federal and state funds to support students and backstop institutions 
  • Apart from emergency rescue funds, institutions should plan for decreased state funding over the long-term 
  • Online programs will continue to grow
  • Accreditors should become more tolerant of new models   

If you’d like to receive a copy of the research report, with Mike’s perspective and deep analysis on a multitude of related issues, please send us an email at . And 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.
Prepared by:
Chad Johnson, Managing Partner | 952.253.6010

Follow me on Twitter @ChadEricJohnson

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.