Cherry Tree & Associates | March 2019 | Volume XIII, Issue 9

SELECTED NEWS

Advance Acquires Turnitin Private investment firm, Advance, has acquired Turnitin, a provider of education technology for academic integrity and writing solutions. Turnitin reports its products are used by over 34 million students in over 15,000 K-12 and higher education institutions.  Read more businesswire.com Blackboard to Divest Payments and Transaction Tools Blackboard will divest its Transact division to private equity firm, Reverence Capital Partners. The division includes a suite of campus ID, payments, attendance and event management services used in higher-ed institutions. The transaction is expected to close in the second quarter of 2019.  Read more edsurge.com Bright Scholar Invests in Start Camp Education Bright Scholar Education (NYSE: BEDU) announced it has agreed to acquire 25% of Start Camp Education. Start Camp Education provides a complete solution in camp layout and program design for education departments of local governments, education groups and real estate developer. Start Camp has reportedly completed 17 education camp design projects in 11 provinces in China.  Read more prnewswire.com ClassDojo Raises $35 Million ClassDojo, makers of a communication app for pre-K-8 schools, raised $35 million in a series C round. The round was co-led by GSV and SignalFire with participation from General Catalyst and Uncork Capital. ClassDojo reportedly reaches 95% of US pre-K-8 schools and has now raised $65 million to date.  Read more edsurge.com GO1 Raises $30 Million GO1, a corporate education startup based in Australia, has raised $30 million in series B funding led by Microsoft’s M12 venture fund, Seek, and Y Combinator. GO1 raised $10 million in a series A round just seven months ago. Read more www.smartcompany.com.au Boxligght Acquires Modern Robotics Boxlight (Nasdaq: BOXL), maker of interactive displays and hardware for education markets, acquired Modern Robotics, a provider of K-12 programs related to programming and robotics.  Read more edsurge.com Securly Acquires TechPilot Labs Securly, a student safety company, acquired TechPilot Labs, a mobile device management and classroom technology provider serving K-12 markets. TechPilot Labs reportedly serves hundreds of K-12 school districts across four continents.  Read more americaninno.com Tinkergarten Announces $21 Million Investment from WndrCo Tinkergarten, a leader in outdoor play-based learning, announced is has closed a $21 million investment from WndrCo. Tinkergarten reportedly has a network of 2,000 leaders trained to delivery healthy, social and engaging learning experiences in all 50 states.  Read more businesswire.com FutureFuel.io Raises $11.2 Million  FutureFuel.io, an edtech startup with a platform that helps employees manage their student debt, raised $11.2 million in a series A round led by Rethink Impact. FutureFuel.io has raised $15.7 million to date.  Read more americaninno.com Empowered Education Raises $8 Million Empowered Education, the parent company of Health Coach Institute and Functional Nutrition Alliance, has raised $8 million in series A funding from Rethink Education. Read more www.businesswire.com CompTIA Acquires TechGirlz CompTIA’s tech workforce charity, Creating IT Futures, acquired TechGirlz, a nonprofit that inspires middle school girls to explore careers in technology. Read more www.prnewswire.com

Weld North Education to Acquire Assessment Technology, Inc.  Assessment Technology Inc. (“ATI”), a provider of learning, educational measurement, and assessment, will be acquired by Weld North Education, a digital curriculum company. ATI’s two flagship applications are Galileo K-12 and Galileo Pre-K. The acquisition is expected to close in the second quarter of 2019. Read more prnewswire.com Bridgepoint to Acquire Fullstack Academy   Bridgepoint Education, the for-profit education company, agreed to acquired Fullstack Academy, a coding boot camp. Fullstack has campuses in Chicago and New York in additional to online offerings. The deal, expected to close in the third quarter of 2019, is valued at $49.3 million and includes $17.5 million in cash.  Read more educationdive.com Betterworks Raises $51 Million Betterworks, an enterprise HR software platfrom for continuous performance management, raised $51 million in a series B round led by Emergence Capital. Betterworks has now raised $65 million in total funding. Read more www.prnewswire.com Newsela Raises $50 Million    Newsela, a platform that packages 3 rd party resourced for teachers to use as learning tools in lieu of textbooks, has raised $50 million in a series C round led by TCV. Newsela reportedly has more than 20 million students and 1.8 million teachers using its platform.  Read more techcrunch.com Zum Raises $40 Million  Zum, the mobile app that enables parents to schedule rides for kids from fully vetted drivers, raised $40 million in series C funding led by BMW i Ventures. Spark Capital, Sequoia Capital and Volvo Cars Tech Fund participated. To date, Zum has reportedly partnered with 150 school districts and has transported 500,000 students.  Read more techcrunch.com Madison Dearborn Invests in Lightspeed Systems Lightspeed Systems, provider of K-12 specific software solutions, has received strategc growth investment from private equity firm, Madison Dearborn Partners. Lightspeed reportedly services over 15 million students worldwide.  Read more businesswire.com Certica Solutions Acquires K-12 Dynamics  Certica Solutions, an edtech platform-as-a-service, acquired K-12 Dynamics, provider of a K-12 analytics solution. Following the transaction, the technology will be called ViewPoint Connect and will be offered in Certica’s suite of data management products.  Read more prweb.com Academia.edu Raises $16 Million  The social media platform built for sharing academic research, Academia.edu, has raised $16 million in series C funding led by Tencent Holdings. To date, Academia.edu has raised $33.8 million.  Read more edsurge.com Mursion Raises $8 Million  Mursion, providers of virtual reality-based simulations for workplace training, raised $8 million in series A funding led by New Market Ventures. Schusterman Family Investment Office, Zoma Capital, New School Venture Fund, Propel Capital, Figure 8 Investments and Strada Education Network participated.  Read more edsurge.com O2B Kids Acquires The Village Academy O2B Kids, a provider of early education services for children backed by private equity firm Spire Capital, is acquiring The Village Academy, an early education services business with 3 facilities in Florida.  Read more prnewswire.com DigitalEd Raises $7 Million DigitalEd, the online education startup, raised $7 million in a bridge round of financing. The capital will be used to support the enhancements and sales capabilities related to its Mobius platform. Read more www.prweb.com FutureFuel.io Raises $11.2 Million  FutureFuel.io, an edtech startup with a platform that helps employees manage their student debt, raised $11.2 million in a series A round led by Rethink Impact. FutureFuel.io has raised $15.7 million to date.  Read more prweb.com

CHERRY TREE EDUCATION FOR-PROFIT 50 INDEX

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

MONTHLY COMMENTARY

It is hard to believe the 2020 Presidential campaign has started already. It is always inspiring to see the many shining examples such a campaign offers, with acts of selfless commitment to civic duty, thoughtful discussions of important issues in respectful debates, and a shared commitment to constructive compromise, that are the hallmarks of elections in America these days. Right? Notable this past month was candidate Kamala Harris’ proposal to increase the average teacher salary by $13,500, by raising taxes to the tune of $315 billion over ten years. Sure, some cynical people might think that is just a shrewd offer to pay-off the teacher unions and help secure their support heading into the primaries. But if she is really shrewd, she will turn this into a proposal that serves her interests with general election voters as well, and could even attract education reformers. My belief is that the general public would readily support higher teacher salaries, despite the large cost, in the right circumstances. Most people (despite the media’s low opinion of the average person’s intelligence) know that means retaining and attracting high-quality teachers. But I believe the average voter would want to see an increase in pay paired with greater accountability, so that schools can replace chronically ineffective teachers. Or at least to be able to pay more to attract teachers in hard-to-fill positions such as the STEM fields where private sector compensation is much higher. The majority of teachers are good, some are great, and they are all doing incredibly important work. Our school system deals with a long list of complex issues too numerous to include here. But if you’ve spent any time in a school building, and/or if you have seen Waiting for Superman , you understand that we shouldn’t let Senator Harris or any politician write a blank check. I realize this is a different type of investment discussion than readers of this newsletter are used to. But one thing I love about our industry, is that the vast majority of you also care about the quality of education in this country, even if we disagree on how to achieve that. And if nothing else, the policy decisions made at all levels of government are relevant because they present opportunities and challenges that for-profit companies need to consider.

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 cjohnson@cherrytree.com | 952.253.6010 www.cherrytree.com 

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.

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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.