Cherry Tree & Associates | August 2018 | Volume XIII, Issue 2
The Rise Fund Invests $130 Million in DreamBox Learning

DreamBox Learning, a provider of K-8 math programs utilizing adaptive learning software, received a $130 million investment from The Rise Fund, managed by TPG. The Rise Fund will take a majority position in the company and Arne Duncan, former U.S. Education Secretary, will join the DreamBox Board of Directors. DreamBox claims to have 3 million students and 120,000 teachers using its platform in all 50 states.
Barnes & Noble Education Acquires, a website allowing students to upload papers and receive feedback using an AI based auto-grading system, has been acquired by Barnes & Noble Education (NYSE:BNED). claims to have over 18 million paper submission uploaded through their site since its 2009 inception.
KinderCare Education Acquires Rainbow Child Care Center

KinderCare, a for-profit operator of child care and early education facilities, acquired Rainbow Child Care Center which operates 150 child care centers across 16 states. KinderCare claims its facilities serve over 185,000 children across 40 states.

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CeriFi Acquires Keir Education Resources

Keir Education Resources, a provider of education resources and preparation materials for various financial and property & casualty exams, has been acquired by CeriFi. A portfolio company of Leeds Equity Partners, CeriFi is a diversified education, training and certification provider.
Knewton Raises $25 Million

Knewton, a maker of adaptive learning technologies, raised $25 million. TriplePoint Capital led the round with a debt facility of $20 million while existing investors, Accel, Atomico, Bessemer Venture Partners, FirstMark Capital, First Round Capital, Founders Fund and Sofina contributed $5 million.
GO1 Raises $10 Million

GO1, an online marketplace for professional development and general training, raised $10 million in series A funding. Seek, the Australian online recruitment company, led the round. GO1 reports having 350 companies using the platform.
DW Healthcare Exits PRIME Education

Healthcare focused PE firm, DW Healthcare, exited PRIME Education, a portfolio company involved in medical education and research. PRIME Education was reportedly sold to a strategic buyer.

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Writable Raises $3.2 Million

Writable, a writing practice and feedback platform used in a K-12 setting, has raised $3.2 million in a seed round led by Omidyar Technology Ventures. Houghton Mifflin Harcourt also participated as a strategic investor.
Quizizz Raises $3 Million

Quizizz, a learning platform allowing teachers to turn curriculum into digital quiz games, has raised $3 million in a seed round led by Nexus Venture Partners. The company also announced it has surpassed 10 million active users.

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Concourse Global Raises $2 Million

Concourse Global, a platform connecting international students with higher education institutions, raised $2 million in a seed round. Colle Capital led the round while A-Star Education, Third Kind VC, LearnStart and GEMS Education participated.

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WeWork’s Flatiron School Acquired Designation

Flatiron School, the coding bootcamp owned by the co-working company, WeWork, acquired Designation, a for-profit design education school.

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Spring Education Acquires Noble Learning Communities 

Spring Education, an operator of PreK-12 private schools, acquired Noble Learning Communities, a fellow operator of private schools. Nobel Learning, a portfolio company of Primavera Capital, claims to have over 25,000 students in its network of 190 private schools.
National Louis University Acquires Kendall College

After receiving approval from the Higher Learning Commission and the U.S. Department of Education, National Louis University (NLU) completed its acquisition of Kendall College’s programs. NLU acquired Kendall from Laureate Education. NLU operates 6 campuses in Illinois and Florida and claims to service more than 7,400 students.
Simplicity Acquires Contratanet

Simplicity, a student employability solution, acquired Contratanet, a network of career portals for job and internships in Brazil. Simplicity is a portfolio company of H.I.G. Capital and claims over 1,300 universities use its platforms worldwide.
Wonderschool Raises $20 Million

Wonderschool, a platform allowing users to launch in-home childcare and education services, raised $20 million in a series A round led by Andreessen Horowitz. Omidyar Network, First Round, Gary Community Investments, Cross Culture Ventures, Uncork Capital, Rethink Education, Edelweiss and multiple angel investors participated in the round. Wonderschool has now raises a total of $24.1 million.
K12 Makes $9 Million Strategic Investment in STEM Premier

STEM Premium, a platform connecting job recruiters with workforce talent, received a $9 million investment from K12 Inc, an online curriculum provider. STEM Premier claims to have over 370,000 users from 19,000 schools across the country. K12 will incorporate STEM Premier’s platform into its Career Technical Education programs.
WeeCare Raises $4.2 Million

WeeCare, a Southern California startup, has raised $4.2 million in a seed round led by Social Capital with participation from Fuel Ventures. WeeCare is a platform that helps caregivers start and manage curriculum-based home daycares.

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LittleBits Acquires DIY

DIY, an online learning community for kids, was acquired by littleBits, makers of the electronic building blocks for kids. LittleBits claims to have sold over 1 million electronic building block kits into more than 20,000 schools.

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Edmit Raises $2.3 Million

Edmit, a platform that helps students and parents in the college selection process, raised $2.3 Million in a seed round led by Founder Collective. Rethink Education and Investor Precursor also participated in the round.
Daekyo Acquires Knowre

Daekyo, a Korean based education curriculum company, acquired Knowre, a deep-learning AI company with education applications. The companies have had a strategic partnership since 2013.

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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
Lately we’ve been wondering; what will education in the U.S. be like for a child born today? Based on the trends we see, and our knowledge of businesses serving the education ecosystems today at all age levels, we’re willing to make a few predictions.

K-12 schoolwork should be predominantly digital for learners and instructors, at least by the time they hit middle school. Questions of equity will no doubt be debated and print will always have a place (witness the flattening in ebook sales), and funding will remain a challenge as it is today. And some programs will hopefully never go digital (for example; art, music, phys ed, and to certain key aspects of science). But we continue to hear from digital solutions that are growing and print companies that are struggling, of adoptions being deferred and core dollars “leak” to supplemental solutions, and of educators embracing solutions that make their lives easier and get their students more engaged in learning.

On the post-secondary side, the cloud continues to support significant changes in what students experience, and costs continue to drive parents and students to seek alternatives that set them up for a meaningful career without a crushing debt load. For a child born today, we are willing to bet there will be even more flexible education options than there are today for a quality education, that sets them up for a fulfilling, productive life. These options will look very different, with more IT-centric and/or competency-based programs (from coding to design, as per Flatiron and Designation), fewer 4-year schools as small liberal arts colleges fold, and more programs for older adults and their needs to be lifetime learners. 

All parents want the best education for their children, and we ask a lot from our schools and from educators. Technology doesn’t promise all of the answers, but it has the promise to make a difference supporting the students, teachers, administrators, and parents who ultimately do the important work of educating future generations. 
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.