Education Markets and Deals Roundup — 14th Edition
As we close out Q2 FY25, September emerges as a pivotal month, marked by a surge of significant results across the education sector. From robust earnings reports to funding, this month has showcased the resilience and growth potential of both global and Indian companies. Industry leaders like Duolingo and New Oriental Education are not only thriving but also setting the stage for future innovations that could reshape learning experiences worldwide.
In India, companies like ODA Class, Invest4Edu, and Miko are making headlines with substantial funding rounds and strategic initiatives aimed at enhancing educational accessibility and engagement.
I. Public Markets
Market Multiples Snapshot — Global and Indian Education
1. B2C — Global Education
B2C— Global Listed Players Comps
Rapid Round-Up
Duolingo reported robust Q2 results for 2024, highlighted by significant growth across key metrics. Total bookings surged 38% year-on-year to $190.1 million, while subscription bookings grew 47% to $156.5 million. Paid subscribers reached 8 million, a 52% increase from the previous year. The platform now boasts 34.1 million daily active users (DAUs) and over 103.6 million monthly active users (MAUs), reflecting 59% and 40% growth, respectively. Revenue climbed 41% to $178.3 million, with net income hitting $24.4 million, up from $3.7 million in Q2 2023. Duolingo’s adjusted EBITDA improved significantly to $48.1 million, with a margin of 27%. CEO Luis von Ahn highlighted the success of strategic initiatives like increased family plan penetration and the rollout of Duolingo Max, which are expected to further boost monetization in future quarters.New Oriental Education & Technology Group has announced an expansion of its share repurchase program, increasing the total authorized amount from $400 million to $700 million, effective through May 31, 2025. The program, which began in July 2022 and has already seen $330.3 million worth of shares repurchased. This move is seen as a signal of confidence in the company’s growth prospects and is expected to provide additional support to its stock price.Laureate Education has introduced a $100 million stock repurchase initiative, funded by its strong cash flow and available liquidity. This move is part of its strategy to return capital to shareholders, reflecting confidence in its ongoing growth prospects. The company reported robust operational performance in Q2 2024, maintaining its full-year revenue and adjusted EBITDA guidance. Significant growth in Mexico’s private higher education market and a recovery in Peru have bolstered Laureate’s outlook. Looking ahead, the company expects 4%-5% enrollment growth and 5%-6% revenue growth, with a high 30% EBITDA-to-unlevered free cash flow conversion rate for 2024.Stride Inc. appears significantly undervalued according to a recent DCF analysis by Simply Wall St., which estimates a fair value of $160 per share — double its current trading price of $80.84. The DCF model, utilizing a two-stage growth framework, projects Stride’s free cash flow to increase from $221 million in 2025 to $333.8 million by 2034. The SWOT analysis highlights Stride’s strong earnings growth and solid balance sheet, though it faces slower projected growth relative to the broader U.S. market.Perdoceo Education Corporation (PRDO) reported Q2 revenue of $166.7 million, surpassing Street’s estimate of $160.9 million. This performance underscores the company’s stronger-than-expected revenue growth for the quarter.Udemy has welcomed back co-founder Eren Bali as Chief Technology Officer, effective August 12, 2024. Bali, who previously served as CEO, will lead Udemy’s engineering and tech teams, focusing on innovation and growth. Bali’s return aims to boost Udemy’s product strategy and leverage new AI advancements.
2. B2B — Global Education
B2B — Global Listed Players Comps
Rapid Round-Up
Instructure Holdings has entered a definitive agreement to be acquired by KKR for $23.60 per share, valuing the transaction at approximately $4.8 billion. This price reflects a 16% premium over its last unaffected share price of $20.27. KKR, along with Dragoneer Investment Group, will acquire all outstanding shares, including those held by Thoma Bravo, Instructure’s majority owner. CEO Steve Daly and his management team will continue in their roles, with KKR supporting investments in technology and innovation across Instructure’s global learning platform. The company aims to achieve $1 billion in revenue by 2028, impacting around 200 million learners worldwide.Skillsoft has appointed Ronald W. Hovsepian as CEO and Executive Chair, effective September 4, 2024, following his role as interim Principal Executive Officer since April.Docebo has appointed Alessio Artuffo as Chief Executive Officer and Board member, effective immediately. Jason Chapnik, Docebo’s Chairman, expressed confidence in Artuffo’s leadership, noting his significant contributions to increasing the company’s Annual Recurring Revenue from $1 million to over $200 million.Lincoln Educational Services Corporation reported Q2 revenue of $102.9 million, surpassing the Street estimate of $100.6 million. This performance underscores the company’s stronger-than-expected revenue growth for the quarter.
3. Indian Education
Indian Listed Education Players Comps
Rapid Round-Up
Veranda Learning Solutions has appointed Aditya Malik as the Group Chief Operating Officer effective September 16, 2024.
The company is also preparing to raise ₹1,000 crore to facilitate a major acquisition of a privately-owned, private equity-backed edtech firm, aiming to strengthen its position in the Indian market. For Q1FY25, Veranda reported a substantial 72.69% increase in operating revenue to ₹118.99 crores, with EBITDA surging 400% to ₹27.61 crores.Jetking Infotrain posted a consolidated net profit of ₹3.11 crore for the June 2024 quarter, recovering from a net loss of ₹1.01 crore in the same quarter last year. Sales increased by 1.89% to ₹4.85 crore compared to ₹4.76 crore in the June 2023 quarter.
II. Private Markets
Equity Financing Snapshot — Indian Education (Source: Press Releases)
Funding Round-Up
SaaS startup Acadru has raised $0.5 million in a pre-Series A round led by AIG Direct LLC, alongside other investors. The funds will support market expansion and the development of new content pathways. Co-founded in 2016 by Abhishek Singhal and Kamini Vidisha, Acadru offers an online learning platform for college and senior school students. The platform features project-based activities, AI-powered profile generation, and over 5,000 projects across 500 topics. Acadru aims to help students discover their passions and develop practical skills through its multidisciplinary approach.Edtech platform Kreedo has raised $4 million in a Series A round co-led by Heritas Capital and UBS Optimus Foundation, with participation from Gray Matters Capital, 1Crowd, and others. The funds will enhance product offerings and support expansion into new geographies within India. Founded in 2012 by Mridula Shridhar and VK Manikandan, Kreedo partners with affordable private schools and preschools to deliver its innovative 6T learning framework. The platform currently serves children aged 3 to 8 years and plans to extend its offerings to grades 3–5, while also scaling its pre-primary teacher training franchise.Robotics firm Miko has raised $2.5 million in a new round from some renowned angels such as Amit Jain, Satyam Sinha, Inderjit Kaur Arora. This infusion follows a two-year hiatus and values the company at approximately $206 million. Miko, known for its emotionally intelligent robots, plans to use the funds to further develop its AI-driven products, including Miko 2 and Miko 3. The company has seen significant growth, with a 2.3X increase in revenue to Rs 225 crore in FY23, despite challenges.Edtech startup ODA Class has secured $500K in its Series B round from Matrix Partners China, Skywalker Education Technology, and Daituzi Education Technology. Founded in 2019, ODA Class provides live online courses for students from classes 1 to 10, leveraging AI and innovative marketing strategies. The funds will be used for digital marketing and expanding its reach, with the company aiming to enroll 100,000 students in 2024.Invest4Edu, a platform offering education planning, saving, and investment services, has raised $3 million in seed funding from family offices. The capital will be used to accelerate growth and deepen its impact in early education planning and financial support. Based in Mumbai, Invest4Edu has created over 50,000 user education journeys and built a network of 100+ business partners. The company aims to build a $250 million mutual fund AUM and a $6 million monthly SIP book, while also providing financial literacy training to over 8,000 youths.M&A Deals Snapshot — Indian Education (Source: Press Releases)
M&A Round-Up
Hyderabad-based Schoolknot has acquired Patasala, enhancing its position in the ed-tech sector. This acquisition adds 150 clients to Schoolknot’s existing base of 600+, bringing the total to over 750. The merger will enhance user experience and integrate cutting-edge features. Schoolknot, backed by Solitaire International, aims to provide comprehensive solutions for schools and educators through this strategic move.
LoEstro Advisors is an investment banking firm specializing in sell-side fundraise and M&A advisory, along with a strong consulting arm.
Over the last four years, we have grown to be one of India’s largest (in terms of M&A transactions) homegrown boutique investment banks, with $1billion + worth of combined deals closed across education, healthcare, consumer, and technology sectors.
