Cherry Tree & Associates | July 2019 | Volume XIV, Issue 1
Troxell and CDI Technologies Complete Merger

Troxell Communications, a leader in providing a full suite of integrated technology solutions including Chromebooks and A/V equipment in the US Education market, has merged with CDI Technologies, a leader in device lifecycle management. The merged company, now called Troxell-CDI, will reportedly offer technologies from over 500 vendors to serve over 70 million students in 50 states.
MetaMetrics to be Acquired by Apax Partners 

MetaMetrics, home to the widely used Lexile scores, and a developer of software platforms that use predictive analytics and data sciences to improve educational outcomes, has announced that it will be acquired by the Apax Digital Fund. The Apax Digital Fund, a technology-focused growth equity fund managed by the global private equity advisor, Apax Partners, purchased the Company from the lower middle market PE firm, Pamlico Capital.
UWorld Acquires Roger CPA Review  

UWorld, the provider of online learning tools for high-stakes exams, has acquired Roger CPA review, provider of learning tools to help accountants pass the CPA exam. The acquisition deepens World’s presence in the accounting profession and adds to its broad exam prep portfolio.
Perennial EdTech Acquired by Frontline Education

Perennial EdTech, a provider of business software solutions for classrooms and students, has signed a definitive agreement to be acquired by Frontline Education. Frontline is a provider of school administration software for the K-12 education community and reportedly has over 80,000 schools using its products.
Minerva Raises $57 Million

Minerva Project, an education innovator combining traditions of research-based university education with cutting-edge technology in student-success, raised $57 million in a series C round led by Bytedance. To date, Minerva has raised $128 million.
Riid Raises $18 Million 

Riid, the AI tutoring solution based in Seoul, South Korea, raised $18 million in a series C round led by Premier Partners, Alpenroute Asset Management, DSC Investment, IMM Investment, Korea Growth Investment Corporation and D Ventures.
SAM Labs Raises $8.9 Million  

SAM Labs, the provider of hands-on coding and technology teaching resources, raised $8.9 million in a series A round. To date, SAM Labs has raised $19.8 million.
Ironhack Raises $4 Million

Ironhack, provider of full-time coding bootcamps with nine campuses worldwide, raised $4 million in a round led by JME capital. To date, the Company has raised $7 million.
Edmentum, an online curriculum leader and pioneer in computer-based teaching and learning, has announced the acquisition of Calvert Education Services. The acquisition adds Calvert’s blended learning solutions and virtual K-8 academy with Edmentum’s award-winning PLATO Courseware, to provide schools and districts with standards-aligned K-12 digital curriculum delivered by state-certified educators through Edmentum’s EdOptions Academy.
Wiley Acquires ZyBooks for $56 Million

Zyante, develop of zyBooks, a digital courseware platform for STEM courses, has been acquired by Wiley in an all cash deal valued at $56 million. Zyante has a team of 84 full-time staff and reportedly reaches 500,000 students across 500 educational institutions.
ESS Acquires Enriched Schools…

Education Solutions Services (“ESS”), the K-12 staffing provider, announced that it has acquired Enriched Schools. Enriched provides substitute staffing services to charter schools around the nation.

…and Proximity Learning

Showing their appetite and bandwidth for M&A, ESS this month also acquired Proximity Learning, a staffing provider of certified virtual teachers. Proximity Learning’s base of virtual teachers will be used to complement the in-class substitutes that ESS provides.
QA Acquires Cloud Academy  

QA, the UK based B2B skills provider, has acquired San Francisco-based Cloud Academy, an enterprise technology training platform. Reportedly, Cloud Academy will add QA’s catalog of more than 500 certifications courses and 1500 instructor-led courses to its digital platform.
Graduway Raises $60 Million

Graduway, a provider of alumni engagement and career services management software for educational institutions and non-profit organizations, has announced an investment of $60 million from K1 Investment Management. K1 is a private equity firm who investments focus on the enterprise software space.
Brainly Raises $30 Million

Brainly, a peer-to-peer platform connecting students in middle school and high school with each other to discuss education topics outside of the classroom, raised $30 million in a funding round that was led by Naspers with participation from Runa Capital and Manta Ray.
WhiteHat Raises $16 Million

WhiteHat, which provides young professionals with apprenticeships at corporations including Facebook and Salesforce, has raised $16 million a series A round led by Index Ventures with participation from Lightspeed and Salesforce Ventures.

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ROYBI Raises $4.2 Million

The AI-powered robot dedicated to early childhood education and language learning, ROYBI, raised $4.2 million in a seed round from undisclosed investors located in Silicon Valley.

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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
While software companies get better valuations, and data analytics companies get a lot of attention, education technology of course includes hardware. Sure, you’ll probably get more buyer interest if you have a SaaS model. And if you’re raising money it seems obligatory to somehow include “AI” in the pitch. But there are exciting and important things happening in the hardware world as well.

First and foremost, students need something on which to interact with digital curriculum. As reported recently by EdWeek, mobile device sales are essentially flat in the education market. Our view is that the previous drop in device prices has slowed, as already thin margins have little room to go. And device price continues to be a lynchpin to the extent to which schools adopt digital curriculum.

And educators have learned that just buying machines doesn’t really get them much beyond a whole lot of questions from local taxpayers and from parents. We’ve seen from our work advising companies in this space, that offering integrated solutions matter more these days. Schools want more service and more options for getting value from their technology investments. That includes more training, more set-up, more pre-loaded resources, more partnerships between hardware and software companies, and more reporting and data for administrators. And it could mean more opportunities for you! 
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.