Cherry Tree & Associates | October 2020 | Volume XV, Issue 4
XPrep Learning Solutions Partners with PDH Academy 

XPrep Learning Solutions, a subscription-based online test preparation platform, partnered with PDH Academy. XPrep Learning Solutions is a 100% digital test prep platform preparing Veterinary, Veterinary Technician, Optometry, and Dental Hygiene Students for professional board exams. PDH Academy, a portfolio company of Eden Capital provides regulatory training and certification to professionals and companies in real estate, healthcare, and specialized trades.  

Cherry Tree & Associates advised XPrep Learning Solutions in its partnership with PDH Academy .
American Public Education Inc. to Acquire Rasmussen University

American Public Education Inc. (Nasdaq:APEI), the owner of online learning provider American Public University System, will acquire Rasmussen University for $329 million. Rasmussen, an institution with multiple disciplinary programs but especially strong in nursing and health sciences, serves over 18,000 students online and across its 24 campuses. Rasmussen is reportedly $256 million in revenue and $44 million in EBITDA which values the deal at 1.3x revenue and 7.7x EBITDA. The deal is expected to close during the third quarter of 2021.
Course Hero Acquires Symbolab

Course Hero, the online course-specific study resource platform, acquired Symbolab, an AI powered math education solution. The acquisition of Symbolab, which has 9 employees and is based in Tal Aviv, comes just a couple months after Course Hero raised $80 million in a series B round. Symbolab has reportedly been used by over 50 million students to understand one billion questions and explanations in 2020 alone.
Turnitin Acquired ExamSoft

Turnitin, the academic integrity and assessment solutions, acquired ExamSoft, the software-based assessment platform owned by Spectrum Equity. ExamSoft software gives educators and test-takers actionable data to improve performance and create meaningful efficiencies in grading, exam-building, psychometrics and overall assessment. ExamSoft reportedly serves more than 1,900 prominent academic, certification and licensing programs.
USATestprep Acquires Galaxy Education

Backed by Serent Capital, USATestprep acquired Education Galaxy, an assessment and intervention platform serving K-8 students. The acquisition enhances USATestprep’s library of state standards-aligned content and products to serve K-12 teachers and students. USATestprep has reportedly served over 2 million students per year in 4,000 schools nationwide with its learning tools.
Liaison Acquires TargetX

Liaison, the Company offering admissions and enrollment solutions, acquired TargetX. TargetX is the maker of a CRM for higher education that helps colleges manage relationships with students, alumni and donors. "Liaison is committed to serving the full student lifecycle," shared George Haddad, Founder and CEO of Liaison.
Trinity3 Technology and FireFly Computers Announce Merger

Trinity3 Technology and FireFly Computers, both Minnesota-based technology solutions serving K-12 markets, announced they have merged. Both are portfolio companies of Rotunda Capital and will be led by Scott Gill, currently the president and CEO of Trinity3.
BEGiN Raises $50 Million

BEGiN, creator of early learning program HOMER, announced today the close of a $50 million Series C round. Investors include LEGO Ventures, Sesame Workshop, the principal investor in Gymboree Play & Music, 3One4 Capital, Trustbridge Partners and Interlock Partners.
Skillshare Raises Funding from Adobe

Skillshare, the online learning community for creativity, raised funding from Adobe, the creative software provider. The capital raise is part of its series D round announced earlier this summer. Skillshare has raised over $108 million to date.
ClassEDU Raises $16 Million

ClassEDU raised $16 Million in seed financing from a group of investors that included early Zoom investors and other education technology leaders. ClassEDU is bringing to market a platform called “Class for Zoom” providing teachers frictionless tools to take attendance, hand out assignments, give quizzes, grade items, or even talk with students one-on-one.
Podium Education Raises $12 Million

Podium Education, the company helping colleges and universities add in-demand tech skills to undergraduate majors, announced its completion of a $12 million series A round led by Album VC and Spring Tide Capital. Podium Education reports having partnered with over 20 public and private institutions and served more than 1,000 students.
Lingokids Raises $10 Million

Lingokids, the Madrid-based application that helps kids aged 2-8 learn English, raised $10 million in series B funding from puzzle and game producer, Ravensburger. Lingokid reports adding over a million families a month to its user base during the COVID-19 pandemic.
Sora Raises $2.7 Million

Sora, a live, virtual high school designed to engage students with dynamic, personalized and synchronous learning, announced it has raised $2.7 million in seed funding, led by Union Square Ventures.
Convertsation Raises Seed Funding

Converstation, an edtech platform providing AI-backed classroom engagement tools, raised seed funding from F2P Ventures. Created by Carnegie Mellon University engineering students, the platform is live in both K12 and college classrooms where educators customize topic prompts and groups to enable online text-based discussion in real-time that can be analyzed around key metrics to help gauge engagement.
Madison Dearborn Partners Acquires Majority Stake in Carnegie Learning

Carnegie Learning, the AI powered education and formative assessment company in the K-12 space, received a strategic investment from Madison Dearborn Partners which will own a majority stake of the business. CIP Capital, Carnegie’s previous majority owner will maintain a material minority stake in the Company along with certain members of the management team. The group will seek to extend Carnegie Learning’s leadership position in K-12 personalized learning and coaching software, assessments, curriculum, and professional learning solutions. Consistent with this strategic plan, in September Carnegie Learning announced the acquisition of Scientific Learning Corporation with the support from Madison Dearborn Partners.

Cherry Tree & Associates advised Scientific Learning in their sale to Carnegie Learning.
Churchill Capital Acquires Skillsoft…

Churchill Capital Corp II (NYSE: CCX.U), a special purpose acquisition company, announced the acquisition of Skillsoft (Software Luxembourg Holdings S.A), a global leader in digital learning and talent management solutions. The transaction is valued at $1.3 billion and the Company will operate as Skillsoft and be listed on the NYSE.

And Global Knowledge Training…
Additionally, Churchill II also announced that it will acquire Global Knowledge Training LLC (“Global Knowledge”), a worldwide leader in IT and professional skills development, from Rhône Capital, a global private equity firm. The newly combined company will acquire Global Knowledge for approximately $233 million, putting the total transaction cost at $1.5 billion. The combined company’s client base will reportedly include more than 70% of Fortune 1000 companies and more than 45 million users across content platforms.
Chinese Tutoring Company, Yuanfudao, Raises $2.2 Billion

Yuanfudao, the Beijing-based education technology group offering a live tutoring platform and online homework services, raised $2.2 billion in two rounds of financing at a valuation of $15.5 billion. The first round was led by the Chinese technology giant, Tencent, and the second round was led by DST Global. At a $15.5 billion valuation, Yuanfudao has doubled its valuation within a year (it raised $1 billion at a $7.8 billion valuation in March), triggered by the migration to online education solutions due to the COVID-19 pandemic. The Company reports having 400 million users in China.
Altitude Learning Merges with US Business of itslearning

Altitude Learning, an edtech platform allowing teachers to create varied pathways for students, is merging with the US business of itslearning, the European learning management systems. Altitude Learning, previously known an AltSchool, was founded in 2013 and has raised $176 million in venture funding from investors including Andreesen Horowitz and Founders Fund.
IRIS Software Acquires iSAMS

IRIS Software Group, the UK-based group of software companies, acquired iSAMS, the online school management system. iSAMS reportedly provides management information system solutions to over 500 UK independent schools and over 500 international schools across 80 countries.
LearnUpon Raises $56 Million

LearnUpon, the startup that’s building e-learning solutions for corporate enterprises, raised $56 million from Summit Partners. While based in Dublin, LearnUpon is seeing high demand in the US markets which reportedly accounts for 70% of its sales. The Company claims to have 1,000 customers globally, including, Twilio, USA Football and Zendesk.
Skilljar Raises $33 Million

Skilljar, the enterprise training platform which enables businesses to provide scalable and effective customer education, raised $33 million in a series B round. Insight Partners led the round with participation from Mayfield, Trilogy Equity Partners and Shasta Ventures.
Knowledgehook Raises $20 Million

Knowledgehook, the Toronoto-based mathematics learning platfrom, raised $20 million in a series A round. Knowledgehook actively collaborates with Ministries and Departments of Education while also working directly with school districts, to offer curriculum-aligned solutions. The company reportedly works with educators across more than 100,000 schools.
Engageli Raises $14.5 Million

Engageli, a video conferencing tool designed to specifically build to address the needs of higher education, raises $14.5 million in seed funding. The platform will compete with traditional video conferencing tools being used in the classroom like Zoom, Microsoft Teams and Google Meet.
GetSetUp Raises $10 Million

GetSetUp, a mission-driven edtech company providing learning opportunity for older adults, raised $10 million in funding led by ReThink Education. The platform currently offers more than 150 classes on essential life-changing skills, from professional development to technology, health, wellness, and hobbies.
HarbourVest Invests in Finalsite

Finalsite, an education technology provider, sold a minority stake to HarbourVest. Finalsite reportedly provides software-as-a-service solutions to over 5,000 leading independent and public K-12 schools across 100 different countries. Finalsite’s software platform enables schools, districts and other institutions to deploy a comprehensive “digital campus,” providing a central hub with tools and data connections to facilitate digital communications.
Fiveable Raises $2.3 Million

Fiveable, which is building an online social learning community to address socialization and motivation challenges for students, raised $2.3 million. The round was led by BBG Ventures with additional support from Metrodora Ventures and Deborah Quazzo.
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
It’s been a while since we’ve talked about adult professional education in our Commentary, and as you see above we’ve recently gotten our own education (pun intended!) on the key drivers of interest in this segment.

Helping Xprep find the right partner was a fun project to work on, and a great outcome for our client. We had very strong interest from a variety of groups, and the lessons we took away include: reinforcing that investors value employment-driven solutions tied to career progression because they have more consistent demand and clearer incentives, our client was completely digital making their model more scalable but also making them more able to meet demand in a COVID world, and quality matters and so in this case our client’s high pass rates made them attractive to consumers and academic partners.

From a practical/process standpoint, it was interesting to see with this deal (and other recent deals) how much can be done remotely - this was a nearly 100% virtual process! From the very first discovery meeting to the end, Cherry Tree ran a six-month auction process without meeting any of our client’s owners, employees, or advisors in-person. We feel very fortunate to be busy and are hopeful for everyone’s benefit that we can get through the pandemic is quickly as possible.

The message for readers of this newsletter is that if you’re in this market, and thinking about exploring an exit, it could be a great time to do so. 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.
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.