Cherry Tree & Associates | December 2020 | Volume XV, Issue 6
Vista to Acquire Pluralsight for $3.7 Billion

Pluralsight (Nasdaq:PS), the platform providing online technology training courses, will be acquired by Vista Equity Partners for $3.5 billion. Pluralsight, which went public in May 2018, offers a library of over 7,500 online courses serving over 17,000 customers including 70% of Fortune 500 companies. The $3.7 billion transaction represents 9.2x NTM revenue and is expected to close in the first half of 2021. Vista Equity Partners owns two other education technology companies, PowerSchool and EAB.
Instructure to Acquire Certica Solutions

Instructure announced its intent to acquire Certica Solutions, a K12 assessment an analytics platform and longtime partner of Canvas and MasteryConnect. As part of this acquisition, Instructure will add to its learning platform Certica's Videri, a powerful K12 analytics solution that integrates district data from multiple sources into one place. In March of 2020, private-equity giant, Thoma Bravo took Instructure private for roughly $2 billion.
Learning Technology Group Acquires eThink Education

Learning Technology Group (AIM:LTG), acquired eThink Education, a large Moodle provider and a Platinum Totara Partner. Open LMS, a subsidiary of LTG, will combine with eThink improving its market share in the North American Moodle market. eThink, which offers open-source Moodle, Moodle Workplace and Totara learning platforms, reports serving more than two million users across 22 countries.
L Squared Sells Learners Edge to Quad-C

Learners Edge, which supports educators at various stages of their professional lifecycle through continuing education, has been sold to Quad-C, a middle-market private equity firm. L Squared acquired the business in 2016, recruited a professional management team, completed two add-on acquisitions, and led various growth initiatives resulting in 2.5x revenue growth over the hold period.
ClassIn Raises $265 Million

Beijing-based ClassIn, the online interactive classroom SaaS platform, raised $265 million in a series C round led by Hillhouse Capital’s GL Ventures. The round comes just months after its $50 million series B round in July. ClassIn offers group video chat on top of a range of interactive classroom settings and teaching features to create a online learning experience that, combined with smart scheduling and quality teachers, claims to outperform the effect of traditional offline settings. The platform reportedly has over 20 million monthly active users across 150 countries.
Aceable Raises $50 Million

Aceable, a mobile based edtech service for state-accredited classes, raised $50 million from private equity firm HGGC. Aceable, with $100 million in capital raised to date, aims to expand the number of certifications it offers. Reportedly, Aceable has been used by 13 million students across 36 states.
Kingsland University Raises $20 Million

Kingsland University, an accredited institution providing individuals with education for the most in-demand and highest paying jobs, secured $20 million in growth financing. To launch and manage its Income Share Agreement program, Kingsland University has partnered with Leif, the ISA Management Platform. Leif works with education providers like Kingsland that promote upward career mobility into highly skilled jobs like software engineering, blockchain development and cybersecurity.
Career Karma Raises $10 Million

Career Karma, a platform providing reskilling opportunities in technology fields, raised $10 million in a series A round led by Initialized Capital. Founded in 2018, Career Karma saw early growth linking job seekers with coding bootcamps and tech-education opportunities. Reportedly, the platform attracts over 1 million users monthly and has placed over 3,000 people into training programs.
Meazure Learning Acquired by Gryphon Investors

Meazure Learning, an exam-delivery and online proctoring solutions, has been acquired by Gryphon Investors, a middle-market private equity firm. The Company employs nearly 300 people plus a network of over 1,300 trained proctors, and it serves more than 1,000 clients. Its former majority owner, Eastside Partners, will retain a minority equity stake.
Learning Pool Acquires Remote Learner

Learning Pool has acquired Remote Learner, a Denver-based LMS specialist and learning technology company. Remote Learner delivers e-learning solutions to large enterprises including Indeed, Royal Caribbean and Ultimate Kronos Group. Remote Learner is the fourth company to join the Learning Pool Group, the platform backed by The Carlyle Group and The Cardinal Capital Group.
Beacon Education Raises $6 Million

Beacon Education, one of the largest providers of online degrees to China, raised $6 million in a series B round. Redpoint China Ventures led the round. Beacon Education, based in Beijing with a US headquarters in California, partners with world class universities to bring degree programs to Chinese learners.
IntellectoKids Raises $3 Million

IntellectoKids, a developer of educational apps for young children, raised $3 million in a series A round led by Allrise Capital. The platform offers parents of preschool children “gamified” educational content and structured lessons available on mobile devices.
Edmentum Acquired by The Vistria Group 

Edmentum, a leading education technology company, received a strategic investment by The Vistria Group which will own a majority stake in the business. Edmentum is a leading digital curriculum and assessment platform reportedly serving over 40,000 schools nationwide. Its offering includes an emphasis in curriculum to specifically address a student’s COVID learning loss, supporting the whole child through partnerships in Social Emotional Learning (SEL), and helping learners of all abilities and backgrounds improve their career readiness. Its previous ownership group including New Mountain Finance Corporation and BlackRock will retain minority ownership positions.
Achieve 3000 Acquires Teachonomy

Achieve 3000, a provider PreK-12 digital resources for in-school and remote learning, has acquired Teachonomy, a professional learning platform for educators and administrators. One of the cornerstones of the Teachonomy platform is the Teacher Success Summit, an annual virtual learning event which this year featured more than 15,000 attendees and included 100+ sessions on a wide range of topics, including equity, SEL, self-care, leadership and pedagogy.
Roblox Acquires Imbellus

Roblox, the online gaming platform, acquired the assets of cognitive assessment provider, Imbellus. Developer of simulation-based tests that measure human thought-process, Imbellus, was valued at $57.5 million in a 2018 financing round. Roblox, which has filed to IPO in early 2021, stated the acquisition was made to “build a system on Roblox for fair and objective assessments that will help us broaden our sources of potential talent from more diverse backgrounds.”
KnowFully Learning Acquires The Income Tax School

KnowFully, a leading provider of continuing professional education, acquired The Income Tax School, a training program and continuing education provider for professionals in tax preparation. Through this strategic acquisition, The Income Tax School will operate under the name Surgent Income Tax School. KnowFully Learning Group is a provider of end-to-end professional education in the accounting, finance, and healthcare sectors.
Brainly Raises $80 Million

Brainly, the online learning platform offering students, teachers and parents homework questions and answers, raised $80 million in a series D round led by Learn Capital. To date, Brainly has raised $150 million as the platform is reportedly used by more than 350 million students, parents and teachers every month.
Mursion Raises $20 Million

Mursion, an emotional intelligence training tool delivered through immersive virtual reality, raised $20 million in a series B round. Leeds Illuminate led the round. Mursion offers a virtual environment for practicing critical human skills and reportedly has partnerships with major corporations including T-Mobile, Coca-Cola and LinkedIn.
WorkRamp Raises $17 Million

WorkRamp, the platform helping organization build and distribute their own training materials, raised $17 million in a series B round led by OMERS Ventures with Bow Capital participating. WorkRamp, is attempting to disrupt the legacy LMS providers by building a more user-friendly tool for companies to build training materials themselves incorporating content, videos, slides and tests. WorkRamp reports having over 250 customers including some big companies like Zoom, Box, Reddit and PayPal.
Clinical Education Alliance Acquired by The Riverside Company

Clinical Education Alliance, a provider of live and web-based certified continuing medical education, has been acquired by The Riverside Company, a private equity firm. Its former majority owner, Renovus Capital, will retain a minority stake. Jesse Serventi, Founding Partner of Renovus, said, "Under our ownership, CEA transformed from a niche, founder-owned business into one of the largest, most trusted CME providers in the U.S."
EducationDynamics Acquires ClassesUSA

EducationDynamics, the education marketing and enrollment management service, acquired ClassesUSA from Core Digital Media. Reportedly, EducationDynamics is a trusted partner to more than 700 higher education institutions.
ParentSquare Raises $7 Million

ParentSquare, a unified school-to-home engagement platform for K-12, raised $7 million in funding. The Company reports annual revenue growth of 100% and reportedly services over 4 million users across 44 states. ParentSquare has raised a total of $12 million over five funding rounds.
The Skills Raises $5 Million

The Skills, an online education platform using focused on content from accomplished professional sports figures, raised $5 million in a seed round. Will Ventures led the round with participation from Global Founders Capital, 8VC, Maveron, Hack VC and Correlation VC. The Skills features courses from athletes like Michael Phelps, Maria Sharpova, Shaun White and Megan Rapinoe.
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
Well, that was interesting, wasn’t it? As the year comes to a close, many of us will say “good riddance,” and rightly so. But we’d be derelict in our duties not to recognize that upheaval creates opportunity, and that the pandemic has permanently shifted technology’s role in education.

For the things that matter most, we recognize the pain and challenges many people went through this year. From losing loved ones to coming face-to-face with the racial injustices that still exist in this country; from struggling to educate children while parents are working from home to getting others all the technology and support they need to do remote learning; and from balancing the desire to protect vulnerable populations to the need to offer them companionship and support in the face of the isolation brought about with the pandemic. 2020 was a year when we were tested.

Educators were tested greatly, and our vote is that they be next in line for the vaccines after healthcare workers and vulnerable populations. We also recognize that the businesses and businesspeople working in the education sector, whether directly or as investors, provide the valuable products and services parents, teachers, and students need to succeed. And this is how many of us feed our families, create jobs, and create wealth that allows us to give back.

While many of the product and service providers were tested too, as were their investors, 2020 was a surprisingly good year for the Education Capital Markets. Volume for the year was consistent with 2019 (but when looked at monthly, saw a large dip in April and May and a sharp snapback in the Fall). Valuations essentially did what they had been doing for previous years: digital product firms that are growing, and with recurring revenue models, saw high valuations often based on revenue multiples. More traditional business models, or companies that were not growing, saw modest valuations based on profit multiples. VC activity was similarly consistent, and in some segments better, especially course and consumer related companies.

Overall, the markets seem to be betting that for ed-tech, 2020 wasn’t just a blip. The need to shift to online learning immediately forced us all to accelerate our technology adoption curve, and when things “get back to normal,” they are unlikely to completely go back to the way things used to be. It should be noted that for many of the more traditional products such as print, assessment, and science-related physical products, which struggled in 2020, we expect to see some bounce back in 2021, especially as we move into the 2021-22 school year. The main clouds on the horizon that buyers and investors are looking at nervously, are those related to funding. So far state budgets have performed better than feared, but it is too early to say what will happen to their fiscal health as we wait for herd immunity, and continue to spend beyond our means in the meantime.

For a confidential discussion 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.