Cherry Tree & Associates | August 2020 | Volume XV, Issue 2
Cambium Learning to Acquire Rosetta Stone

Cambium Learning Group, a provider of digital education solutions, has announced that they will acquire Rosetta Stone in a cash transaction for $792 Million, $30 per share. 
Rosetta Stone is technology-based language learning platform that helps students learn to read, write, and speak in more than 30 languages. Cambium sees the transaction as a stepping-stone to expand their online language learning capabilities in a time of expanding demand for online educational tools.
Course Hero Raises $80 Million in Series B

Course Hero, a start-up with the core goal of providing students a place to ask and answer questions, has announced that it has completed an extension to its Series B, raising $70 million of additional capital to the $10 million in raised in the beginning of the round. The completed round brings the valuation of the company of $1.1 Billion with annual revenue of over $100 million and positive earnings. Course Hero expects to use the capital for operations, product innovation and feature development, and acquisitions.
Collegis Education Acquires Education Management Solutions

Collegis Education, a provider of higher education services, has announced the acquisition of Education Management Solutions (“EMS”). EMS offers a platform of medical simulation learning management technology. Collegis sees EMS’ solutions as highly complementary to their core business.
Top Hat Acquires bluedoor

Top Hat, an active learning platform for higher education, has announced that it has acquired bluedoor, an education content creator for scientific subject matter used in higher education. Top Hat will convert bluedoor’s existing content, utilized by over 400 institutions in the U.S., into a digital format to improve educator and student engagement and adoption.
Bright Mountain Media Acquires CL Media Holdings d/b/a Wild Sky Media

Bright Mountain Media, a digital media and advertising services platform, has announced that it has acquired Wild Sky Media. Wild Sky Media offers a platform of engaging content which includes parenting and lifestyle brands such as CafeMom,, and LittleThings.  Its content has been viewed by over 360 million unique users annually with over $22 million in revenue.
Skillshare Raises $66 Million

Skillshare, a provider of online education content, has announced that it has raised $66 million in growth capital. The round was led by OMERS Growth Equity, with additional participation from Union Square Ventures, Amasia, Burda Principle Investments, and Spero Ventures. The Company has been cash-flow positive over the first half of 2020 and plans to use the capital to fund new growth initiatives.
Lead School Raises $28 Million in Series C

A provider of integrated educational content and technology solutions for private schools, Lead School, has announced that it has raised $28 million in Series C funding. The round was led by WestBridge Capital with an existing investor, Elevar Equity, participating as well. Lead School expects to utilize the capital to expand its sales channels and growth its customer base.
Infinedi Partners Invests in Cultural Experiences Abroad

Infinedi Partners, a private equity firm based in New York, has announce an investment in Cultural Experiences Abroad (“CEA”), a provider of study abroad services for U.S. college students that are seeking to study in foreign counties. CEA has provided services for more than 4,800 students from over 300 different universities.
Showbie Raises $5 Million in Series A

Showbie, an education technology start-up that develops an app used to help manage assignment, assessments, and communications, has raised $5 million through a Series A round. The round was led by Rhino Ventures and included participation from Point Nine Capital and Azure Capital. The company was founded in 2012 and is based in Edmonton, Canada.
University of Arizona Acquires Ashford University

The University of Arizona has announced that it will acquire Ashford University in a push to expand their online education platform. Ashford currently provides online education programs for approximately 35,000 students. The acquired platform will be branded as the University of Arizona Global Campus and will be a nonprofit institution.
Byju Acquires WhiteHat Jr. for $300 Million and Raises $122 Million in Capital

WhiteHat Jr., a startup based in Mumbai that provides online coding courses to students in India and the US, has been acquired by Byju for $300 million. Byju is an Indian-based online learning company which identified WhiteHat as a leader in the live online coding space and believes that it will be a strong addition to its core offerings. Byju also announced that it has raised $122 million from DST Global, an investment fund headed by billionaire Yuri Milner.
Spell Capital Invests in All About Learning Press

Spell Capital, a manager of private equity and mezzanine capital, has announced that it has invested All About Learning Press, a provider of multi-sensory education products for children that are seeking to develop their reading and spelling skills. The investment in the company was in the form of debt and equity.
American International Holdings Corp Acquires Controlling Stake in

American International Holdings Corp. (OTCPink:AMIH) has announced that it has acquired 51% ownership interest in Life Guru, an online platform of career and life coaching content. Life Guru drives its revenue through monthly and yearly subscriptions for its content and also receives a percent of the fees that its Coaches collect for individual client coaching sessions.
HighPoint Technology Solutions Acquires Smart Planner

HighPoint Technology Solutions (“HTS”), a provider of products and solutions that lead to student success, has announced that it has acquired Smart Planner. Smart Planner was founded in 2012 with the goal to help students graduate on time. Its solutions have helped more than 500,000 students plan an effective route to graduation.
Lambda Raises $74 Million in Series C

Lambda, a provider of virtual computer science courses, has announced that it has raised $74 million in capital through a Series C funding round. Participants in the round included Gigafund, Tandem Fund, and Y Combinator. The company has not disclosed its valuation but has confirmed that it has increased since its series B round in January of 2019 where it was valued at $150 million. The start-up will utilize the funds to help meet the sharp rise in demand for its courses.
Springboard Raises $31 Million in Series B

An Online education, Springboard, that provides training and reskilling courses for people that want to expand their career opportunities has announced that it has raised $31 million in a Series B financing round. The round was led by Telstra Venture, with participation from Vulcan Capital, SJF Ventures, Costanoa Ventures, Pearson Ventures, Reach Capital, and several others.
Juni Learning Raises $10.5 Million Series A

Juni Learning, a digital education platform that provides children with engaging courses led by live instructors, has announced that it has raised $10.5 million in a Series A round. The round was led by Forerunner Ventures and included participation from AME Cloud Ventures, Index Ventures, and Pear VC. Juni will utilize the funding to expand its curriculum in the subjects of Math and English.
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
Readers will notice this month that significant money continues to be invested into online learning targeted to adults, especially in the career-related and upskilling spaces, and in personal interest categories. Why the continued, and increasingly larger, investments in these segments? The simplest answer is, they are following consumers, especially millennials. We see two primary underlying drivers (that were there before COVID and will be there after) to a segment we’ll more broadly call online consumer learning.

It is no surprise that online learning is attractive because of its flexible, on-demand options for learners. That was one of the original promises of its value proposition, and a clear reason for its continual growth at the expense of traditional delivery methods including print and in-person instruction. Those old methods aren’t going away completely, but consumers increasingly are voting with their pocketbooks, filling their free time with videos, courses, interactive exercises, and relevant/interesting subject matter.

In the career-related segment, it gives consumers an added value proposition: a way to turn their free time into productive time that benefits future earnings. For similar reasons, personal interest sites are expanding. Both segments are educational in nature, and fill the void between academic credit-granting courses, and simple how-to videos. Consumers and upskillers seriously interested in a topic value an online course for scaffolded content, often delivered by a verifiable expert, with organized and logical instruction, and in some instances with assessment and a certificate of successful completion. Publishers and media companies (not to mention investors) have taken note of this trend, and of the authentic engagement it is driving among users.

So when you see transactions involving firms such as Skillshare, Life Guru, Wild Sky, Lambda, and WhiteHat Jr., ask yourself what you are doing to position your firm to benefit from the continued march into online learning. And 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 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.