Cherry Tree & Associates | December 2019 | Volume XIV, Issue 6
Instructure to be Acquired by Thoma Bravo

Instructure (NYSE: INST), provider of the Canvas LMS platform, announced its plans to be taken private for $2 billion by Thoma Bravo, a leading private equity firm. Instructure has a strong presence in K-12 and also sells its LMS products in higher education and to corporations. Thoma Bravo claims it has plan to increase Instructure’s investment in education technology innovation and expand internationally.
Scantron Acquired by Transom Capital

Transom Capital Group, a middle-market private equity firm, acquired Scantron Corporation, the global provider of comprehensive assessment and technology solutions. Scantron provides leading education assessment capabilities, licensure and certification testing solutions and survey services to K-12, higher education, health care, financial services and other industries globally.
Mentoring Minds Acquires SchoolSpire 

Mentoring Minds, a provider of K-12 critical thinking materials, has acquired SchoolSpire, a K-12 software platform that integrates with school district’s exiting systems. Together, the companies will provide school districts with a streamlined way to incorporate its “9 Traits of Critical Thinking” into curriculum and instruction.
Pearson Sells its Mixed Reality Learning Unit

GIGXR has acquired the global mixed reality and immersive learning assets of Pearson (NYSE:PSO). GIGXR was founded in 2019 specifically to purchase the Immersive Learning Group of Pearson, spinning off the unit into a new company. Terms of the acquisition were not disclosed but CEO of GIGXR, Steve Lassman, reportedly raised just shy of $1 million to bring the assets out of Pearson.
EducationDynamics Announces Acquisition of Thruline Marketing

EducationDynamics, a higher education marketing and enrollment management service, announced the acquisition of Thruline Marketing’s agency-of-record business. The business provides paid digital marketing, traditional marketing, and SEO management services for more than 20 higher education institutions.
Degreed Acquires Adepto

Degreed, the workforce upskilling platform, has acquired Adepto, a talent platform that provides visibility into the skill-sets of current, past and potential workers. Founded in 2013, Adepto has reportedly grown by 150% annuals for the last three years and is used by one-in-three Fortune 50 companies.
Absorb Software Acquires ePath Learning

Absorb Software, provider of the Absorb LMS, acquired ePath Learning, a provider of cloud-based learning technology. The acquisition of ePath marks the third acquisition for Absorb in 2019 which completed the purchases of eLogic Learning and Torch LMS in August and May of 2019, respectively.
Science Interactive Group Acquires eScience Labs

Science Interactive Group has acquired eScience Labs, provider of undergraduate student science kits used with online classes to provide hands-on experiments. Science Interactive will combine eScience with its own lab kit company, Hands-On Labs. Combined, the companies will reportedly double their suite of college lab experiments.
Duolingo Raises $30 Million at $1.5 Billion Valuation 

The language learning application, Duolingo, raised $30 million in a series F round of funding from Alphabet’s growth equity arm, CapitalG. Duolingo has now raised $138 million and its latest round values the company at $1.5 billion. Based in Pittsburg, Duolingo claims to have 30 million monthly active users and offers 94 courses across 38 languages.
Hoonuit Acquires Tembo 

Hoonuit, the Minneapolis-based provider of data management, analytics and professional learning solutions in education, has acquired Tembo, a leader in public assessments and accountability reporting. Tembo will be a catalyst for Hoonuit's new Community Engagement solution aimed at helping education agencies showcase their key education initiatives to stakeholders through public-facing dashboards.
PSI Services Acquires Caliper

PSI Services, a global workforce solutions provider, acquired Caliper, a leading talent assessment company. Caliper has been using data and scientifically validated instruments to provide deep insights into sales effectiveness for over 60 years. Caliper has reportedly helped over 65,000 organizations hire and grow the right talent.
EAB Acquires YouVisit

EAB, a provider of enrollment management and student success to K-12 schools and colleges, has acquired YouVisit, a provider of virtual tours for higher education. YouVisit reportedly provides 360-degree virtual tours of over 600 institutions.
EdCast Raises $35 Million 

EdCast, a provider of AI-powered personalized learning and knowledge management for enterprise customers, closed a $35 million series D financing round led by Avathon Capital, an investment platform run by Sterling Partners. EdCast’s corporate learning and upskilling content reportedly has two million paid users.
HackerRank Acquires Mimir

HackerRank, a provider of technology training and assessment services for tech companies, has acquired Mimir, a platform designed for computer science professors to create and deliver online course. Founded in 2014, Mimir is reportedly used by several major US universities including Michigan State, Oregon State, Texas A&M and UCLA.
EdTechX Holdings to Acquire Meten Education

EdTechX Holdings (Nasdaq: EDTX), a London-based special purposes acquisition company, has agreed to merge with Meten Education, a Chinese company offering English language-learning services for students and professions, effectively taking the company public. The merged entity will be called Meten EdTechX and will be valued at about $614 million.
Verb Raises $6.4 Million 

Verb, a platform focused on training employees on soft skills using a blended learning model, raised $6.4 million in seed funding from angel investors Brett Hurt, Nav Sooch, Andy Roddick, Leon Chen and Barshop Ventures.
Riipen Raises $3.75 Million 

Riipen, a Vancouver-based startup that offers a platform that pairs students’ real-world projects for employers in exchange for course credits, raised $3.75 million from SEI Ventures (venture arm of Capella owner Strategic Education), Reach Capital and Strada Education Network among others. Riipen has raised about $6 million to date.
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
In addition to our M&A Services, Cherry Tree regularly publishes research on a variety of markets, including numerous aspects of Education. We are proud to announce that early in 2020 we’ll be publishing a report on the PreK-12 Assessment market, co-authored with industry expert Jim McVety of FirstStep Advisors.

The report will cover the most important market segments such as formative assessment and high-stakes testing, including market sizes and growth rates, leading and emerging players, trends and the competitive landscape, as well as venture capital and M&A activity. We’ll offer our predictions as well, on which trends and players to watch.

Which kinds of assessments will gain prominence? Will artificial intelligence lead to any genuine intelligence? Will the M&A market heat up or cool off? Will assessment and instruction come together in a truly integrated manner? And which players are most likely to lean in, or double down, or come up with some other catchy new expression to describe its focus on the market? 

To find out, please contact us to receive a copy of the report. And/or 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.