Education Markets and Deals Roundup — 12th Edition
In June, we saw a slight uptick in deal activity across both public and private markets, with marquee transactions like Duolingo’s acquisition of Hobbes and Adda 247’s acquisition of Ekagrata in the global and Indian markets, respectively. Several high-value transactions are in the works, including Perdoceo’s $142 million acquisition of the University of St. Augustine for Health Sciences, which is expected to close later this year, while KKR and Francisco Partners are bidding to acquire Instructure.
Additionally, equity funding has been robust, with numerous funding rounds being announced and several major fundraises still in progress, including PhysicsWallah’s $150 million and Career Mosaic’s $30 million fundraise.
zB2C — Global Education
Rapid Round up
Duolingo — Compant has acquired Detroit-based animation studio Hobbes, marking its second acquisition in the design space since its 2021 IPO. Hobbes, which has collaborated with Duolingo on projects like Duolingo Music, brings a team of 12 designers and animators to form the company’s first dedicated motion design team, based in Detroit. The acquisition is structured as cash plus equity awards for the team and is seen as an “acqui-hire” by Duolingo.Chegg — Company has announced a restructuring plan aimed at refocusing its services on students, enhancing support with a comprehensive platform that integrates academic and functional resources. This strategy includes reducing its workforce by 23% (441 employees) to streamline operations and cut costs, with expected savings of $40 million to $50 million in 2025. Chegg will also expand its international presence, diversify distribution channels, and simplify its systems.Perdoceo — Company has signed an agreement to acquire 100% of the University of St. Augustine for Health Sciences (USAHS) for approximately $142 million to $144 million in cash, expected to close in December 2024, pending regulatory approvals. USAHS, a leading institution for graduate health sciences degrees, had revenues of around $170 million in 2023 and serves about 4,500 students. The acquisition aims to diversify Perdoceo’s academic offerings and capitalize on the growing demand for health science careers. The transition is not expected to impact USAHS’s current programs, and the deal is projected to enhance Perdoceo’s operating income starting in 2025.D2L — Company announced its acquisition of H5P Group at the Fusion user conference. H5P is renowned for its interactive content creation software used globally by educators and businesses. Founded in 2014, H5P offers a user-friendly platform for creating over 60 types of interactive content, enhancing learning outcomes.
D2L plans to invest in H5P, further integrating its tools with the D2L Brightspace platform to improve learning experiences.
2. B2B — Global Education
Rapid Round Up
Instructure — Company has acquired Scribbles, a provider of credentialing and records management for K-12 schools, from Alamar Partners. This acquisition enhances Instructure’s credentialing network and supports student transfer and mobility. CEO Steve Daly stated that Scribbles, along with Parchment, will improve credential validation and provide solutions for enrollment and student transfers.Financial terms of the deal were not disclosed.Powerschool — The Schall Law Firm is investigating potential fiduciary duty breaches by PowerSchool Holdings, Inc. directors and management following the company’s announcement of its acquisition by Bain Capital for $5.6 billion on June 7, 2024.
The investigation focuses on determining if the PowerSchool board breached its fiduciary duties to shareholders to act in their best interests
3. India Education
Rapid Round up-
Veranda — The board of directors of Veranda Race Learning Solutions (Veranda Race), a material subsidiary of Veranda Learning Solutions, has approved the allotment of 1000 senior, secured, redeemable, unlisted, and non-convertible debentures of a nominal value of Rs 1,00,000 each, aggregating to Rs 10 crore (NCDs), to the investors identified by the board of directors of Veranda Race at its meeting held on 10 July 2024.NIIT — NIIT announced the appointment of Pankaj Jathar as its new chief executive officer (CEO), effective today.
Jathar will take over the position from Sapnesh Lalla, who will continue as a non-executive director at NIIT while remaining the CEO of NIIT Learning Systems.
Funding Round Up-
Prime Video Lectures has secured undisclosed funding from a private investment firm. This investment will support its expansion, enhance its content library, and introduce top faculty and personalized learning features. The new funding positions the platform as a leader in the sector, attracting top educators to enrich the student experience.CollegeDekho has raised $9 million from existing investors in an extended Series B round through a special purpose vehicle (SPV).
With the latest funding, CollegeDekho maintains a valuation of $138 million and has raised a total of over $90 million to date. The company made several acquisitions in 2022, including EdTech platforms Getmyuni and IELTSMaterial.TimBuckDo, a pioneer in the student gig economy, has raised seed funding of INR 2 crores from US-based angel investors Morton Meyerson and Nandkishore (Andy) Kalambi. Co-founded by Mythri Kumar and Apoorv Sharma Prasad, the platform connects students with part-time gig opportunities, using AI to match them with suitable jobs.
M&A Round Up
Adda247, India’s leading multilingual learning platform, has acquired Ekagrata Eduserv Pvt. Ltd., a prominent player in the Chartered Accountancy (CA) test preparation market, valued at INR 800 crore. This acquisition enhances Adda247’s offerings in competitive exam prep and aims to expand its user base significantly. Anil Nagar, CEO of Adda247, emphasized the strategic fit, stating that Ekagrata’s expertise will help establish leadership in the CA segment. Ekagrata’s founders and team will integrate into Adda247, with Anshul Agrawal appointed as Director, CA.Schoolnet, a leader in K-12 EdTech for government schools, has acquired GeniusTeacher, an AI-focused company for private schools, in a multi-million-dollar all-stock deal. CeniusTeacher personalizes learning through engaging content based on students’ interests. It currently serves 2.5 million active students across 800 private schools, with aspirations to expand to around 10,000 schools through the acquisition.
III. Significant Deals in the works.
PhysicsWallah (PW) is poised to raise $150 million in a new funding round, led by new investors along with participation from existing backers like Westbridge and GSV Ventures. This round is set to value the company at approximately $2.8 billion, marking a significant increase from its previous valuation of $1.1 billion during its Series A round in June 2022.Career Mosaic is seeking funding of around $25- $30 Millions to support acquisitions, expansion, and technology development in the growing Indian study abroad market. They have engaged KPMG as financial advisors to identify their needs.
The funds will primarily target growth capital, geographical expansion in regions like the Middle East and Southeast Asia, and recruitment of sales personnel. Zaveri emphasized the importance of diversifying into markets like Vietnam and Indonesia, leveraging global contracts with U.S. partner universities.
