Cherry Tree & Associates | December 2018 | Volume XIII, Issue 6
The Carlyle Group and Quad Partners Invest in Accelerate Learning 

Accelerate Learning, a provider of science curriculum serving K-12 markets, received an investment from The Carlyle Group and Quad Partners. Accelerate Learning claims nearly 200,000 teachers use its materials nationally. Following the transaction, The Carlyle Group becomes the majority owner while Quad Partners and existing investors, Owl Ventures and Rice Management Company become minority investors.
Apex Learning Acquires Youth Digital 

Digital learning and curriculum provider, Apex Learning, acquired Youth Digital’s library of project-based technology courses. Youth Digital claims to have reached more than 100,000 students in 100 countries.
Follet Acquires NextTier Education 

Follet acquired NextTier Education, the cloud based platfrom providing students, parents and counselors with guidance and information on postsecondary education. NextTier claims to feature a database with more than 20,000 scholarships.
Educators Resource Acquired by Gladstone Investment

Gladstone Investment Corporation (NASDAQ: GAIN) acquired Educators Resource, a wholesale distributor of school supplies and K-12 teaching materials to retailers nationwide. The company claims to have over 25,000 SKUs from over 300 suppliers.
Lumen Learning Raises $5 Million from Follet

Lumen Learning, a digital courseware provider, raised $5 million in a Series C funding led by textbook publisher, Follett. Lumen Learning’s educational resources are either free or low-cost and serve the higher education market.
DataCamp Raises $25 Million

DataCamp, the platform providing supplementary education in data skills for professionals, raised $25 million in a round led by Spectrum Equity with participation from Accomplice and Arthur Ventures. DataCamp claims to have over 3.3 million users in over 190 countries and 1,000 business customers.
EBSCO Acquires Linguistics Abstracts Online

Linguistics Abstracts Online, a bibliographic database specializing in linguistics and language study journals, has been acquired by EBSCO Information Services. EBSCO, the service provider for libraries, acquired Linguistics Abstracts Online from global publisher, Wiley.
BoomWriter Announces Acquisition of Squirrel Learning

The UK-based education professional development and services company, Squirrel Learning, will be acquired by BoomWriter Media. BoomWriter media, the global provider of online collaborative writing solutions, claims to have presence in more than 45,000 classrooms.
Primus Capital Invests in BizLibrary

Primus Capital announced a growth investment in BizLibrary, a provider of online employee training content and software. BizLibrary claims to have a library of over 7,000 titles.

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The Mom Project Raises $8 Million

The Mom Project, a career destination for moms, raised $8 million in Series A funding. GroTech Ventures and Initialized Capital led the round while Aspect Ventures, Atlanta Seed Company, Engage Ventures, OCA Ventures, BBG Ventures, IrishAngels and Wintrust Financial participated.
TITAN School Solutions Raises $5.2 Million

TITAN School Solutions, provider of cloud-based services around nutrition serving K-12 school districts, raised $5.2 million Series A funding. Wavemaker Partners and Springboard Ventures led the round with participation from RezVen Partners. TITAN claims to serve 1 million students across 150 school districts.
ACT Acquires Knovation 

Knovation, the K-12 open educational resources curator, has been acquired by ACT, the nonprofit best known for its college entrance exam. Knovation’s netTrekker application, one of its core assets, claims to have served over 90 million students in its 18-year life.
Disney Invests in Kahoot

Kahoot, the platform providing user-generated educational gaming, raised $15 million earlier this year by a group of investors including Disney. In December, Disney exercised its warrants and now own a 4% stake in the company at a valuation of $376 million.
Byju’s Raises $540 million

Indian education startup, Byju’s, raised $540 million at a valuation of $3.6 billion. Naspers Ventures and Canada Pension Plan Investment Board led the round. Byju’s claims to have 30 million registered users, 2 million of which are paid customers. Byju’s is run by Think and Learn Pvt.
TAL Education Acquired CodeMonkey

Beijing-based TAL Education Group acquired the teaching platfrom focused on coding, CodeMonkey. CodeMonkey teaches middle-school students how to code using puzzle-like challenges and claims to have 10 million users around the world.
Aceable Raises $47 Million 

Aceable, the platform offering digital courses for people advancing their life goals through licensing, certification and training, raised $47 million in Series B funding. Sageview Capital led the round. Aceable claims to serve more than 550,000 students.
EdCast Raises $33.6 Million

EdCast, the cloud solution for personalized learning and knowledge management serving large companies and government organizations, has raised $33.6 million in funding. Softbank, REV Venture Partners, The London Fund, Crescent Enterprises and Mistletoe participated in the round. EdCast reports having 2 million paid users across hundreds of enterprise and public-sector customers.
West Academic Acquired by Levine Leichtman Capital

West Academic, a provider of legal education content used in law schools and commerical settings, was acquired by Levine Leichtman Capital. West Academic, headquartered in St. Paul, Minnesota, claims to have over 1,600 titles authored by 1,900 influential legal professionals.
CommonBond Acquires NextGenVest 

NextGenVest, a platform with the goal of helping Generation Z make strong financial decision from high school through college and beyond, has been acquired by CommonBond, an online lender that finances and refinances student loans. NextGenVest reports that about 15% of college-bound seniors in New York City, Chicago and Philadelphia use NextGenVest.
School Loop Acquired by Think3

School Loop, a learning management systems and content management systems serving K-12 school districts, has been acquired by the private equity fund, Think3. School Loop claims to be used in 30 states and serves over 3,500 schools.

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Ambi Raises $6.5 Million

Ambi, the edtech platfrom focused on building a learner engagement platform, recently closed $6.5 million in funding. The funding consists of a $1.5 million Seed Round and $5 million in Series A funding. VC NXT Ventures, Steigen LLC, and international early-stage fund, Global Investment, participated in the funding.
GoReact Raises $4 Million

The video-based skills training platform, GoReact, raised $4 million in growth funding led by Five Elms Capital. GoReact is reportedly deployed in over 500 university campuses.

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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
This month's articles provide a glimpse of a trend we expect to see more of in 2019: more investments in, and more M&A involving, digital curriculum.

Administrative software has long been the preferred segment for investing and M&A in the Education Market, in both K-12 and Higher Ed. One can appreciate why: less subjectivity and more straightforward purchasing decisions, and higher retention rates driven by higher switching costs, to name a few.

But as we've described in the past, there remains a large (multi-billion-dollar) opportunity for curriculum providers, and a growing one in many segments. Digital delivery platforms make it easier for customers to choose a variety of solutions, for a variety of specific needs. We continue to hear of schools limiting or delaying adoption money to free up funds for more flexible uses, and for Supplemental resources instead of Core curriculum. While their large, nationwide distribution channels and deep instructional capabilities are an incredible strength and their sheer size give them more staying power, the larger publishers continue to struggle to grow. Meanwhile small and mid-size players are investing in talent, leadership, and complementary businesses as they reach scale.

Clearly they are seeing that good, engaging, and effective curriculum is not a commodity.
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.