Cherry Tree & Associates | February 2020 | Volume XIV, Issue 8
Kendall Hunt Acquires Paradigm Education Solutions 

Paradigm Education Solutions, a leading post-secondary provider of print and digital learning solutions for computer technology, health careers, business technology and career development, has been acquired by Kendall Hunt Publishing Company. Paradigm was formerly owned by Carnegie Learning, a portfolio company of CIP Capital. Kendall Hunt is an Iowa-based publishing company with over 8,000 titles which has been family held and operated for over 75 years.

Cherry Tree & Associates acted as exclusive sell-side financial advisor to Carnegie in the sale of Paradigm.
CourseHero Raises $10 Million at $1.1 Billion Valuation

CourseHero, the education technology company operating a learning platform for students to access course-specific study resources, raised $10 million in a Series B round from NewView Capital. NewView Capital also purchased $30 million of equity from existing employees. The round values CourseHero at $1.1 billion (about 11x revenue). The Company reports having revenue over $100 million derived from its roughly 1 million subscribers paying between $10 and $40 per month.
Credential Solution Acquires Parchment

Credential Solutions, a portfolio company of Brentwood Associates, acquired Parchment, a processor and verifier of academic records. Collectively, the two companies facilitate more than 18.5 million academic records exchanges a year, serving more than 13,000 high schools, universities and professional organizations. Parchment had raised $66 million in venture funding before the transaction.
Colibri Group Invests in Hondros Education Group

Colibri Group, provider of online and in-person education learning solutions to licensed professionals, closed an investment in Hondros Education Group, a national provider of professional education. Hondros Education reports having educated over one million students through its family of brands. Colibri Group is backed by Gridiron Capital.
Frontenac Invests in XanEdu

Michigan-based XanEdu, provider of custom content solutions in Higher Ed and K-12 markets, has been recapitalized by Frontenac, the Chicago-based private equity firm. XanEdu reports serving 1,800 institutions with its library of 8 million content items.
Vendantu Raises $24 Million

Vendantu, the India-based learning app aimed at students aged between 12 and 18, raised an additional $24 million in a Series C round from GGV Capital, increasing the total raised in its Series C to $66 million. The Company reports having over 75,000 paying subscribers on its app. Vendantu has raised $82 million to date.
InterviewBit Raises $20 Million

InterviewBit, a startup that runs computer science programs for college graduates and engineers based in India, raised $20 million in a Series A round. Reportedly, the round values the company between $100 million and $110 million. The round was led by Sequoia India and Tiger Global. InterviewBit reports having more than 2,000 students enrolled in its six-month program which live-streams coaching session to aspiring software engineers.
DigitalChalk Merges with Selleration

DigitalChalk, a learning management solution, has merged with Selleration, a sales enablement company that features data-driven sales onboarding and development. DigitalChalk and Selleration will leverage their joint predictive technologies to measure skills and behaviors, predict success, and prescribe a personalized learning experience that will aim to improve corporate performance.
Graduway Acquires Snap! Advance

Graduway, provider of career services, alumni relations and fundraising software, acquired Snap! Advance, a provider of digital fundraising solutions. Snap! Advance reportedly works with over 100 universities across North America.
Udemy Raises $50 Million at $2.0 Billion Valuation

Udemy, the marketplace offering 150,000 online learning courses, has raises $50 million from Benesse Holdings, the Japan-based educational publisher that has been Udemy's strategic partner in Japan. The round values the Company as $2 billion. Udemy has raised $200 million to date and its courses have been used by 50 million students.
Byju’s Raises $200 million

Indian math and science platform, Byju’s, raised $200 million from General Atlantic in a round that values the Company at $8 billion, making it one of highest valued private Companies in India. Byju’s mobile platform reports having over 42 million registered users of which 3 million are paid subscribers. Byju’s has raised about $1.45 billion to date.
Unacademy Raises $110 Million

The India-based digital learning platform, Unacademy, raised $110 million in a Series E round led by Facebook and General Atlantic with participation from others including Sequoia India and Nexus Venture Partners. The round reportedly values the Company over $500 million and it has now raised over $200 million to date. The Company reports offering over 1 million video lessons.
Top Hat Raises $50 million

Top Hat, creator of multiple software tools for teachers in higher education, has raised $55 million in Series D round led by Georgian Partners and Inovia Capital. Existing investors Union Square Ventures, Emergence Capital and Leaders Fund also participated with debt financing from BMO Technology and Innovation Banking Group. Top Hat reports having about 2.7 million students enrolled in courses that use its tools, including 750 of the top 1,000 colleges and universities in North America.
Cadence Education To Be Acquired by Apax Partners

Cadence Education, a provider of early childhood education, will be acquired by funds advised by Apax Partners from its current owner, Morgan Stanley Capital Partners. Cadence Education reportedly services families and students in more than 225 private preschools. The transaction is expected to close in March of 2020.
Snapask Raises $35 Million

Snapask, the on-demand tutoring application operating in East Asia, raised $35 million in a Series B round led by Asia Partners and Intervest. Snapask reportedly has a total of 3 million students using its platform asking 2 million questions monthly. Snapask has raised $50 million to date.
Codility Raises $22 Million

Codility, a platform helping tech recruiters and hiring managers administer online coding tests, raised $22 million in a Series A round led by Oxx and Kennet Partners. Codility has achieved double-digit annual recurring revenue growth in its 10 year history and reports having a list of customers that include Microsoft, Tesla, Slack, American Express and other fortune 500 companies.
Coassemble Raises $4.4 Million

Coassemble, an online training platform and learning environment geared towards mid-market and technology-based companies, raised $4.4 million in a Series A round led by Equity Venture Partners. Coassemble will use the funding to grow its product development, sales and marking functions in its Denver, Colorado headquarters.
Microverse Raises $3.2 Million

Microverse, a coding schools that lets students utilize Income Share Agreements to pay tuition, raised $3.2 million in a seed round. General Catalyst and Y Combinator participated in the round. Microverse is marketing towards students in developing countries like Mexico, Brazil and India.
Roybi Acuires Kadho’s AI Engine, KidSense

Ryobi, the robot maker teaching language and math skills to young children, acquired the KidSense artificial intelligence engine developed by Kadho. KidSense uses voice data from about 150,000 children to recognize children’s speech.
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
As seen by the numerous unicorns in education who announced capital raisings this past month, and the large sums they received, venture capital activity in education is strong, especially for later stage rounds.

As a former venture capital analyst now working for a former venture capital firm (Cherry Tree had four funds between 1980 and 1996, backing education companies such as Capella and PLATO/Edmentum), I and my firm know what venture investors look for: differentiated offerings serving large addressable markets in a scalable manner, with strong teams, and the potential for high profits.

Many of the largest rounds today, and the highest valuations, are focused on the global market for online learning and courses targeted to consumers. There is no doubt this is a large market and reminds us of the large sums that a few years ago were dedicated to English language learning in foreign countries. It is inherently scalable, and offers an attractive business model with the potential for high profitability. It also strikes us as a market segment where brand and market reach will matter greatly, giving larger providers and earlier entrants an advantage. The high valuations today increase the risk of ultimately making for a profitable investment, but for the winners in this segment the returns could be tremendous.
For a confidential conversation about your company’s needs to add capabilities and improve operations, or regarding strategic alternatives for exiting, merging, acquiring, 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.