Cherry Tree & Associates | May 2022 | Volume XVV, Issue 12
Regent Education Announces Investment from Attain Capital Partners

Regent Education, a provider of SaaS solutions that automate and simplify the financial aid process for higher education institutions, announced a significant growth equity investment led by Attain Capital Partners. Chrysalis Ventures, CNF Investments LLC, and New Markets Venture Partners, current investors, also participated. "When it comes to financial aid software, there is none better than Regent. Their comprehensive, cloud-based solution enables institutions to improve business operations and mitigate compliance risks—all while improving the student experience, which is so essential to expanding access to an affordable post-secondary education," said Greg Baroni, Founder and Managing Partner of Attain Capital Partners.

Cherry Tree and Associates served as Regent Education’s exclusive advisor in the transaction.
Cornerstone to Acquire SumTotal

Cornerstone OnDemand, a provider of cloud-based HR software solutions, to acquire SumTotal, a provider of learning and human capital management software-as-a-service for customers in highly regulated industries. The addition of SumTotal is expected to help Cornerstone support a larger and more diverse group of customers. Cornerstone currently reports serving over 6,000 customers and 75 million users worldwide.
Zovio Sells its Tutoring Service TutorMe to GoGuardian

Zovio, an Arizona-based education technology services company announced that it has sold TutorMe, an online tutoring services platform for K-12 education, to GoGuardian for $55 million in cash. Zovio acquired TutorMe in 2019 for $2.8 million in cash and nearly 310,000 shares after pivoting from its prior operations as an owner of for-profit colleges. Randy Hendricks, CEO of Zovio said, “The sale of TutorMe highlights the company's ability to fulfill its plan to pursue strategic alternatives.” He also commented that the sale will be instrumental in their plan to unlock value for their shareholders.
Progress Learning Acquired Horizon Education

Horizon Education, a provider of postsecondary readiness programs, was acquired by Progress Learning, a nationwide provider of online K-12 standard-aligned learning solutions. Horizon Education will add a fifth product in Progress Learning’s suite of education tools. This acquisition came on the heels of Progress Learning’s merger with USATestprep and Education Galaxy.
Guild Raises $175 Million in Series F Funding

Guild, a Denver-based online education and upskilling platform, raised $175 million in Series F funding at a $4.4 billion valuation. Wellington led, and was joined by Citi Impact Fund, Bon Secours Mercy Health, Oprah Winfrey and insiders Bessemer Venture Partners, D1, Felicis, FPV, General Catalyst, Iconiq Capital, Redpoint and Silicon Valley Bank.
Odilo Raises $64 Million

Odilo, a white-label platform used by clients to build their own customized e-learning offerings, raised $64 million in a round of funding led by London investor Bregal Milestone with participation from previous backers. The Company reports serving 8,500 customers covering 170 million users that have access to its catalogue of 3.9 million items. The funding is expected to be used to continue growing the catalogue and expand the Company’s footprint into new markets.
Prenda Raises $20 Million Led by 776

Prenda, an Arizona-based startup that has created a platform to enable one permutation of delivering education through tuition free micro-schools, has raised $20 million in funding to expand its business and vision. The Series B was led by Seven Seven Six (776) with strong participation from VC Learn Capital, Modern Venture Partners, Peak State Ventures, and inside angels also provided funding.
Prisms VR Raises $4.25 Million

Prisms VR, a learning platform for math education, announced it has raised $4.25 million in new Seed funding led by Andreessen Horowitz. The Company uses virtual reality to teach students mathematics spatially, allowing students to physically interact with mathematical concepts to drive better outcomes. Prisms VR reports serving dozens of school districts in the U.S. and plans to use the financing to reach more than 65 school districts and 100,000 students nationwide by the end of 2022. The Company is also preparing to release a new at-home learning solution in late 2022.
Riverside Invests in CORE Higher Education

CORE Higher Education Group, providing solutions in student competency management, clinical evaluation, and workforce readiness announced a significant growth investment from The Riverside Company. The capital is expected to be used to expand product development and customer support along with the pursuit of complementary add-on acquisitions. Currently, CORE reports serving more than 375 programs at over 175 colleges and universities through North America.
Beable Education Acquired Readorium

Beable Education acquired Readorium, a provider of educational software that teaches reading comprehension skills through science text differentiated to students’ reading levels. The Company plans to integrate Readorium’s standards-aligned content into its online Literacy Recovery Platform. Readorium has won many awards for quality and efficacy and is expected to complement Beable’s existing offerings and platform.
IXL Learning Acquires Curiosity

IXL Learning, a developer of personalized learning products, acquired Curiosity Media, the creator of a language learning platform for Spanish and English. The addition to IXL Learning’s portfolio is expected to further diversify and complement IXL’s current language and literacy offerings. Curiosity Media’s platforms have collectively reported helping more than 100 million people each year grow and refine their language skills.
Achieve Partners Acquires Majority Stake in Boclips

Achieve Partners, an education and employment-focused private equity firm, acquired a majority stake in Boclips, an online educational video and podcast platform used by publishers, schools, and Ministries. Achieve Partners Managing Director Troy Williams believes that Boclips’s platform provides structure, security, and relevant video and audio content that improves academic outcomes for students. Boclips seeks to address the frustration providers and educators face when searching for videos to suit their curriculum.
Degreed Acquired Learn In

Degreed, a California-based company helping firms develop a culture of learning to improve retention, upskilling, and onboarding, acquired Learn In. Learn In helps establish educational platforms to consolidate all resources needed to build a highly skilled workforce. The acquisition allows Degreed to offer a broader range of development options. This is the fourth acquisition for Degreed.
SourceWell Acquired FilterED

SourceWell, a self-funded government organization that allows agencies to save time and money by purchasing products and services through its cooperative purchasing program, added FilterED to its portfolio this month. FilterED is a cloud-based platform for schools that collects and analyzes school technology information to improve student outcomes.
Leap Raises $75 Million in Series D Led by Owl Ventures

Leap, a San-Francisco-based overseas education company serving students who are or are aspiring to study abroad, raised an additional $75 million in capital. The round was led by Owl Ventures with participation from four other investors. Since starting in 2019, the Company has raised over $150 million in equity.
Cuemath Raises $57 Million 

Cuemath, a global one-on-one math tutoring platform, announced a fundraise of $57 million led by Alpha Wave Global, an alternative asset management company, at a valuation of $407 million – a 2x jump in valuation. Cuemath’s new round of funding signals a positive change in the industry, both in terms of size and investor participation. The company plans to use the funding to expand its global footprint.
Kira Learning Announces $6 Million Seed Round Financing

Kira Learning, a computer science education company serving K-12 learners, announced $6 million in seed capital led by New Enterprise Associates and the AI Fund. The Company is rooted in its belief that computer science education will be a core requirement for K-12 students within the next five years and provides curriculum, content, and learning tools for educators and administrators.
Sandler Announces New Strategic Partner

Sandler, a global sales professional development and performance improvement organization, announced a new strategic partner with David Williams, Partner at Blue Marlin. The Company recently announced a corporate rebrand to reflect the evolving market. “The acceleration of new technologies and platforms, evolving buyer journeys, and modern trends in preferred learner experiences and modalities is staggering… David Williams is the best suited partner to help Sandler reach its next-level vision to be embedded in all technologies and platforms… so that sales professionals and leaders have on-demand access [to our products].” (David Mattson, CEO and President of Sandler). The partnership is set to ensure that Sandler can provide revenue generating professionals to reach new levels of success.
Northlane Capital Partners Invests in Infobase

Northlane Capital Partners, a middle market private equity firm based in Maryland, invested in Infobase, a curator of high-value content and uses its software platforms to deliver content to students, educators, librarians, corporations, and parents. Infobase reports serving more than 7,000 customers in the United States and internationally.
For-profit education comprises more than 5% of the roughly $1.5 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
First and foremost, we are proud to have worked with Regent Education as they raised capital to expand their impact. The work of Jim Hermens and his team to simplify and automate financial aid management to benefit students in all enrollment models is more relevant now than ever.

Second, as colleges and universities take a breath over the summer and reset after the most tumultuous 32 months ever in higher education, it’s a good time to look at what the near-term future might hold. We spend a lot of time speaking to leaders in the higher education space and, while nobody’s crystal ball is crystal clear, there are some trends that emerge from these conversations. Below are a handful of observations about the road ahead that may be useful or thought provoking to our readers:

  • We may be headed into a time when there is a clearer delineation than ever before between two tiers of higher education. The first tier will be made up of institutions with fortress brands, endowments, and alumni networks. They can maintain enrollment and create prestige offerings around the opportunity for in-person education, serendipitous engagement, and socialization. Their focus will be first-time, full-time students who are less sensitive to the cost of debt and drawn to the value of a prestigious institution’s alumni network.

  • The much larger second tier lacks a fortress brands, endowments, or high-value alumni networks. Institutions in the second tier are fighting over a shrinking number of enrollments. They are competing against each other, non-degree offering, and the decision to simply not go to school. They are serving the vast majority of non-first-time/full-time students. The winners in this group will be the ones that can offer a unique and compelling value proposition at a commodity price. They will go to great lengths to take all possible pain and friction out of the experience for students from enrollment to graduation. Flexible enrollment and academic delivery models will greatly benefit the winners in this tier. Institutions that successfully navigate serving students in the second tier will need to greatly reduce their fixed cost structures to make the investments needed to navigate this transition.

  • As the demands of the modern economy require a greater emphasis on career-long learning, there is a significant opportunity for colleges and universities to transform their relationship with their alumni. Rather than simply relating to them as donors or boosters, institutions can serve alumni as their go-to resource for the on-going tools they need to compete in the modern workforce. Colleges and universities can deliver training resources to alumni. Many are working to do this today. We think there is also a significant opportunity in serving as a trusted resource to guide and counsel alumni on the best tools available to them for their upskilling needs.

  • The accelerated shift to digital learning caused by the pandemic has given rise to a number of impressive innovations in both the classroom and in administration. However, these innovations are constrained by the ability to the users to extract maximum benefit from them. We think there is a huge opportunity in the professional development space. There is a significant need for credible, trusted, effective professional development that can scale across institutions. This especially extends to the use of data. I was recently a panelist at the Learning Impact Conference sponsored by 1EdTech and this was a theme of several conversations.

  • As institutions seek to differentiate, unique and special content will become increasingly desirable. Community content distributed by publishers will increasingly be commoditized.

While the disruption currently roiling the higher education market can be painful and frustrating, it also creates the conditions for creative problem solving, new ideas and innovative models. We remain excited about the future of the sector.

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.

About Cherry Tree & Associates:
Cherry Tree is a Minneapolis-based investment banking firm with more than four decades of transaction experience, with education being a primary segment focus. Our services include Sell-Side M&A where ownership wants to either realize their liquidity goals or desires to recapitalize their business to better position it for future growth. Additionally, we represent Buy-Side clients in efforts to add acquisitions to complement their organic growth efforts. 
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.
Commentary by:
Mike Buttry, Managing Director | 952.253.6027
Prepared by:
Chad Johnson, Managing Partner | 952.253.6010
Follow me on Twitter@ChadEricJohnson
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.