Cherry Tree & Associates | November 2019 | Volume XIV, Issue 5
Pearson Acquires Lumerit

Pearson, a global education company with over 24 thousand employees in 70 different countries, has announced the acquisition of Lumerit Education, an education technology company that helps students with college degree completion and affordability solutions. Pearson believes that this acquisition will further their capabilities to provide more educational opportunities to more people.
Manhattan Review Acquires Get Prepped

Manhattan Review, a provider of college and graduate school admissions test preparation materials has announced that it has acquired Get Prepped. Get Prepped is a nationwide leader in LSAT preparation services through sources and private tutoring. Manhattan has stated that they expect the brands to remain separate due to the well-known approach and appeal to learners of Get Prepped.
Rotunda Capital Partners Acquires Trinity3

Rotunda Capital Partners, a lower middle market private equity firm, has acquired an interest in Trinity3 Technology. Trinity3 is a provider of student computing solutions, warranty services, and enterprise products to the K-12 education market. Through Rotunda’s investment in the company, Trinity3 expects to enhance its hardware and software solutions for the K-12 market.
SchoolMint Acquires Smart Choice

SchoolMint, a provider of strategic enrollment management and behavior products for K-12 educators, has announced that they have completed their acquisition of Smart Choice. Smart Choice is an admissions and school choice platform that provides registration and administration software solutions for public, charter, and private PreK-12 schools and school districts. SchoolMint has stated that the transaction will expand their offerings to K-12 schools with smarter enrollment solutions.
Guild Education Raises $157 Million in Funding

Guild Education recently announced that is has closed a series D financing round totaling $157 million. The round was led by General Catalyst and valued the Company at $1 billion. Guild Education partners with Fortune 100 employers to provide employee education benefit platforms and access to non-profit, accredited universities.
Immersive Labs Raises $40 Million in Funding

In a series B round, Immersive Labs, has raised $40 million in funding. Immersive Labs provides cybersecurity skills education through their unique platform that engages users through a variety of techniques and games. The round was led by Summit Partners, and participants included Goldman Sachs. The company expects to use the funding to expand further into North America.  .
Verto Education Raises $6 Million in Funding

Through a recently announced seed funding round, Verto Education has announced that they have raised $6.3 million. Verto is a Berkley, CA based study-abroad provider for college students. Participants in the round included First Round Capital, GSV Ventures, 10xImpact, Box Group, and several others. The company expects to use the funds to hire more employees and increase its program offerings.
International Society for Technology in Education Acquires EdSurge

International Society for Technology in Education (ISTE), an Virginia-based non-profit organization responsible for education technology conferences, blogs, books, and journals has announced that It will acquire EdSurge. EdSurge, founded in 2011, is a for-profit news organization that has several financial backers including Reach Capital, TAL Education, and the Bill and Melinda Gates Foundation. The transaction is expected to close by the end of the year.
PowerSchool Acquires Schoology

PowerSchool, a provider of student information systems and performance solutions for K-12 schools and districts, has acquired Schoology. Schoology is a developer of learning management software systems that are used by students in K-12 schools. PowerSchool has announced that they have invested $90 million annually into software research and development and that this acquisition will increase their development resources by 40 percent.
Learning 2020 Acquires Penda Learning

Learning 2020, a Florida-based K-12 edtech company that provides educators with assessment, instruction, and intervention technology solutions, has acquired Penda Learning. Penda learning operates as an online education platform that offers education content for math and science subjects for grades 4 – 10. Learning 2020 expects to invest in Penda’s user interface and unique pacing assisting services.
Campus Labs Acquires IDEA Education

Campus Labs, a provider of software for assessment in higher education, has announced that they have acquired IDEA Education. IDEA Education is a non-profit research organization that seeks to improve student learning in higher education through analytics, resources, and advice. Campus Labs expects the acquisition to strengthen their product capabilities and development capacity.
Kenzie Academy Raises $100 Million in Funding

Kenzie Academy, an Indianapolis based provider of technology training that acts as an alternative learning solution to in-person colleges, raised $100 million. The round was led by Community Investment Management, a San Francisco based institutional impact investor. Kenzie expects to utilize the funds to increase the access that students have to Kenzie’s programs across the US and allow the company to expand its offerings.  .
Cybrary Raises $15 Million in Funding

Cybrary, a leading online provider of cybersecurity career development platforms, has announced that it has raised $15 million in funding through a series B round. The round was led by BuildGroup and included participants such as Arthur Ventures and Gula Tech Adventures. This round brings the total capital raised by Cybrary to $23 million. The company expects to use this funding to accelerate the development of the online workforce platform that is currently used by 3 million cyber and IT professionals.
Trolley Ventures Invests in EdConnective

EdConnective, a Virginia-based company that provides online teacher training to ensure student success, has announced that they have received an investment from Trolley Ventures. The company provides over 3 thousand teacher training sessions in 9 states.
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
Having kids has been one of the greatest experiences of my life. One of the side benefits, given my focus on education technology, is to experience various market segments as a consumer. With my 10th grader, I'm spending more and more time thinking about college admissions, and helping her prepare for the process.

I’m sure she’ll be okay regardless of where she ends up, but there is no doubt that collectively as a nation it causes a lot of stress and not a little consternation. The process for getting into elite schools especially can seem to be somewhere between a crapshoot and a rigged game. The admissions scandal generates a lot of headlines, and to a lesser degree so do the debate over whether to scrap the SAT and the ACT, and the broader questions of costs and fairness. This month I want to share Melissa Korn’s article from November 29th Wall Street Journal essay, “How to Fix College Admissions.” (Public service announcement: If you’re not subscribing to, you should be.)

The author makes ten prescriptions that are worth debating regardless of the controversy some would cause. I personally don’t agree with all of them, for example I’m not convinced we should move away from the SAT and the ACT, and at the end of the day not everyone can go any school they want. But I am intrigued with the idea of eliminating legacy admissions, modifying the essay portion of the Common App, and developing a lottery system. I respect the argument that colleges are private institutions and should be able to make admissions however they want, within the law. But they benefit greatly from taxpayer money, college is an incredibly important institution in our society, and we have every right to pursue policies that create a better, fairer, and more egalitarian society. If nothing else we should have a national debate to talk them through. We can still have healthy conversations in this country, even when we don’t all agree, right…?

This being a Capital Markets newsletter, I must add that innovation has already brought us improvements, from the Common Application, to national transcript services, to online platforms that broaden access, to products and services that help students find a better fit for them or help them prepare for the college entrance exam. What innovations are coming that could improve the process even more?
To continue the broader conversation, follow me on Twitter @ChadEricJohnson.

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 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.