The EdSheet Vol. 10

Hello!

Longer essay today covering my perspective on the education market in 2024. If you have your own thoughts on the year, please send them my way! I’d love to collate into a follow-up post.

Early-stage entrepreneurs, please remember to apply to the Milken-Penn GSE Education Business Plan Competition (EBPC) before February 19, 2025! There is over $200,000 in (non-dilutive) cash available in the competition. More details below, entrepreneurs can apply here.

Matthew Tower , Vice President, Whiteboard Advisors

The Penn Milken Education Business Plan Competition

The Milken-Penn GSE Education Business Plan Competition (EBPC) application is open until February 19, 2025! The competition is open to education ventures worldwide addressing learning at any level, with less than $2M raised or earned in the past year—no Penn affiliation required!

The EBPC is the world’s premier competition for early-stage ventures tackling inequities in education through innovation. Since 2010, it's awarded more than $2 million, with winners and finalists securing over $200 million in funding.

This year’s applicants will compete for over $200,000 in cash and prizes and connect with global education leaders and investors.

Apply Now

2024 in Review

It has been a long 4 years in the education world. The COVID-19 pandemic set children’s academic progress back by years, roughly doubled the rate of chronic absenteeism in schools, and welcomed Gen Z into the workforce with Slack rather than in-office mentorship.

The pandemic was, briefly, a financial boon for education businesses. But the spike in valuation multiples was, mostly, a mirage and much of the industry has been nursing a financial hangover for the past ~2 years. The demise of FEV Tutors a few weeks ago was an extreme - and extremely public - example of the incongruity between pandemic-driven valuations, and a market reality that simply hasn’t lived up to growth expectations. Many others continue to fight this valuation hangover privately.

On the brighter side, the market for mature education companies remains robust. Private Equity funds committed ~$30B to the sector across 25 buyout deals over the course of 2024, including $14.5B for Nord Anglia Education - the largest private equity transaction ever in the education industry. In the public markets, Kaplan and Bright Horizons grew roughly in line with the S&P 500 while Stride substantially outperformed it.

We also have an idea of where the next wave of innovation will come from - AI. Day-to-day usage remains low for most people, especially teachers, but hardly a day goes by without a major announcement in the field. Of the 150 early-stage education venture rounds (where < $20M of capital was committed) this year, 62% mentioned AI in their funding announcements. (A stat gleaned by an app Replit’s AI chatbot built for me while I sat on the Peloton.) Most of these startups will not pan out, but a shift in rhetoric this dramatic usually means something.

All of which is to say that 2025 looks to be a year of…mostly waiting patiently. I expect it will take another 6-12 months for growth-stage companies (Series A to pre-IPO) to finish resetting investor expectations around more measured growth and, in turn, lowered valuations. It will also take at least 6-12 more months for us to see significant AI use cases beyond question-answering and language practice, building on investment seeds sown over the past few years.

With that as a framework, let's dig in on the data that informs my view of the market.

For the past 3 years, I have tracked publicly announced financial transactions in the education sector, adding a custom taxonomy to each deal to help me understand the business side of education in a more quantitative way.

This exercise is not without subjectivity. Is the company behind a video game that received FDA approval to treat ADHD an education company? What about the company that is developing a chatbot to cure adult loneliness? There are no simple answers to these questions, and both the companies and investors involved in the education sector continue to grow more complex and sophisticated in their operations.

To keep tracking simple (albeit conservative relative to other resources), I use the following criteria to populate the deal database:

1. For all deals: Does the business currently have a product that is directly connected to learning, provide vertical-specific support to learning institutions, or contribute to the talent function of the modern workplace
2. Venture funding: Company must raise $1M or more in primary equity funding from named, institutional investors
3. M&A: Combined entity must employ 50 or more people.
4. Private equity funds: Both VC and buyout, must include $15M or more of assets under management

Click the link below for the underlying dataset, which you can explore on your own. Please note that this is a live resource, with deals - both new and historic - being added to it on a daily basis. Please also feel free to send me a note with questions/comments.

Access Data

2024 By the Numbers

• I tracked 352 financial transactions in the education sector over the course of 2024. These transactions ranged in size from $1 million (the minimum for inclusion in the database) to $14.5B, with 206 venture funding rounds, 118 acquisitions, and 25 private equity buyouts in between.
• Although transactions took place in 47 different countries, more than half of deals (by both dollar volume and number of transactions) occurred in the US.

• The venture market for education also continues to skew towards investment in workforce development, with 46% of venture rounds raised by companies in this category. Of note, this trend does not hold in the market for mature education companies, where both the largest deals by valuation and transaction volume were in the K12 sub-sector.

• Of course, no discussion of the education funding market would be complete without a list of the Top 10 venture rounds and Top 5 M&A deals (all of which were PE buyouts or part of a PE-led roll-up). Anthology’s $250M financing technically takes the top spot for most funds raised in a non-change-of-control transaction, but this funding was subsequent to a private equity buyout and, thus, not comparable to traditional venture rounds.

In sum, 2024 continued a run of tough years for the education sector. Objectively, there are a disproportionate number of companies and individuals who continue to pay for COVID’s market exuberance. But! There was some good news too - 2024 also included the largest education transaction ever. And there were hundreds of education companies in healthy enough positions to raise capital from institutional investors.

I don’t think we have reached the end of this market downcycle, but it does feel like the light at the end of the tunnel is growing brighter.

Deals

Whiteboard Advisors not only provides policy and market-related diligence and advisory services, we track every financial transaction that happens in education — and keep a record of all deals that are publicly announced.

The following transactions caught our eye over the past few weeks. If you have a deal to announce, or would like access to the full transactions database, please reach out.

Venture Funding

• Leap raises $65M / India, International Recruitment / Apis Partners, Owl Ventures, Jungle Ventures, Peak XV Partners
• Maki People raises $29M / France, Recruitment Platform / Blossom Capital, DST Global, Frst, Global Founders Capital, Picus Capital
• Enko Education raises $24M / South Africa, K12 School Operator / Africa Capitalworks, Adilwale Fund I
• Starbridge raises $10M / US, K12 Software Infrastructure / Owl Ventures, Autotech, Commonweal, Avalanche VC
• Grayquest raises $9.3M / India, School Software Infrastructure / IIFL Fintech Fund, Claypond Capital, Pravega Ventures
• Teal raises $7.5M / US, Career Development / CityLight Capital, Flybridge, Rethink Capital Partners, Lerer Hippeau
• Final Round AI raises $6.88M / US, Recruiting Platform / Uncork Capital, HF0, Linear Capital, Ritual Capital, Mento VC, AltaIR, Alumni Ventures, Goodwater, Hico Ventures, Soma Capital, iSeed Ventures, Level One, Sky9 Capital
• Degree Analytics raises $5M / US, HED Software Infrastructure / LiveOak Ventures
• Corsmed raises $3.5M / Sweden, Healthcare Training / Luminar Ventures, Big Pi Ventures
• TalentMapper raises ￡2M / UK, Corporate Upskilling / Mercia Ventures, Hatch

M&A

• BetterLesson acquires Abl / US, Professional Development
• Brightchamps acquires Edjust / India, Content Platform
• HEX acquires EntryLevel / Australia, Corporate Upskilling
• Sanoma acquires Edita’s Secondary and Vocational learning materials / Finland, Content Provider

Buyouts

• Ro Health receives strategic investment from LightBay Capital / US, Healthcare training and staffing

Other Financial Transactions

• Keystone Education Group secures €100M bond / Norway, Student Recruitment
• Workera secures strategic investment from Accenture / US, Talent Management

News of Note

I have amended some article headlines to more appropriately capture why I found them interesting.

• EdTech Insiders updated generative AI market map / via EdTech Insiders
• Which colleges always lose money? / via Robert Kelchen
• Tutoring giant’s sudden demise linked to federal relief funds / via The 74
• In EdTech, you either bet on teachers or you have to build one / via Mathworlds
• Major education funding grants not impacted by federal funding freeze / via Whiteboard Advisors
• ESSER spending now in the rearview mirror for most districts / via K12 Dive
• NAEP truth bombs / via Edunomics Lab
• NAEP winners and losers / via Aldeman on Education
• How do you teach your child to be “good at the internet” now? / via Romper
• Wait, college enrollment actually went up last fall? / via Jeff Selingo
• How will LA’s $10B in school bonds be used to rebuild schools impacted by fires / via Cal Matters
• Trump directs Education Department to prioritize school choice with discretionary funding / via Associated Press
• In-home daycare prices rose 50% last year / via Bloomberg

Data

• Brighteye Ventures’ 2025 European EdTech Funding Report

Whiteboard Advisors is the leading policy-related diligence partner for education investors, advising on most major private equity transactions in education over the past 15 years. Our specialty is translating complex policy dynamics into insights that inform decision-making. Reach out to learn more.

Stay Informed with Whiteboard Advisors' Newsletters

?? Whiteboard Notes: Published every Friday, this newsletter delivers a weekly recap of major education news, covering key policy updates and shifts across the education landscape.

?? What We’re Reading: PK-12 and Higher Education: Published Monday-Thursday, Kelly Branning curates the latest K-12 and higher ed news, research, and reports from across the country.

?? What We’re Reading: New Skills, Talent & Development: Every Wednesday, this newsletter provides insights on workforce development, HR tech, and the latest trends in corporate learning.

?? The EdSheet: Biweekly, Matthew Tower brings you the top education business news, from funding deals to mergers and acquisitions. Don’t miss out on the must-know financial happenings in the education sector.

?? Boundless Potential: Alison Griffin curates Colorado-focused news and activities every week for those who are nationally-minded but Western-focused.

Subscribe to any or all of our newsletters to ensure you never miss an update.