Tyton Partners Announces 2020 Key Deal Highlights and Predictions for 2021

|Feb 2nd, 2021

Transformational Higher Education and Human Capital Optimization Solution Providers (click on tombstones to read press releases):

Cappex has been acquired by EAB, a portfolio company of Vista Equity Partners Helix Education has been acquired by RNL, a portfolio company of Summit Partners SolidProfessor has partnered with Hawk Ridge Systems

Churchill Capital II has agreed to acquire Skillsoft and Global Knowledge Carrick Capital Partners has acquired Flatiron School, a WeWork Company DevelopIntelligence has been acquired by Pluralsight

Best-in-Class K-12 Curriculum and Software Players:

Teachtown has been acquired by Bain Capital Double Impact ECS Learning Systems has been recapitalized by AAVIN Private Equity Aztec Software has been acquired by PSG 

Emerging International EdTech Software and Service Providers:

LearningMate has been acquired by SPi Global, a portfolio company of Partners Group TalentSprint has been acquired by NSE Academy A Leading European Online Proctoring Platform has been acquired by A Leading Software Based Assessment Platform

As we look forward to 2021, following a challenging but productive year in 2020, we are grateful for the hard work, exceptional results, and ongoing perseverance of our clients, friends, and colleagues. We are equally proud of the insights, accountability, and tenacity of the Tyton Partners team by delivering transformational outcomes through the uncertainty and challenges we faced over the past year. 

Amidst the extraordinary events of 2020, Tyton Partners closed twelve high profile and market leading transactions in the last six months, while continuing to invest in building our practice in Europe, launching the Center for Higher Education Transformation, and expanding the investment banking team with seven new hires. 

We have been encouraged as the global knowledge markets experienced tremendous deal volume and heightened interest from investors, and we are entering 2021 with over a dozen active sellside deals under LOI and a multitude of new mandates that will launch in Q1.

This activity is further complemented by a healthy pipeline as the pandemic has given rise to several key trends that have supported our continued growth and success. In 2021, we expect to see seven critical trends that will drive the global knowledge M&A markets:

  • The emergence of EdTech as a new asset class for a broader range of investor groups that want exposure to the sector. Throughout the last year, we have seen a combination of alternative asset class investors, family offices, and special purpose acquisition corporations (SPACs) complement many existing private equity and VC investors that are keen to look at investing across the early childhood, preK-12 education, higher education, and human capital optimization markets. In addition to gaining exposure as a traditional LP in sector focused funds, these family offices and other non-institutional pools of capital are allocating significant portions of their capital base as direct investments in the EdTech market segment. We expect to see this trend continue into 2021 and beyond.
  • Lower middle market SaaS and tech-enabled business models continue to be on fire. The rise of rapidly growing, sub-$30 million ARR SaaS EdTech businesses achieving record exit multiples is fueled by a combination of the past decade of exponential growth in VC funds and strategic capital deployment in this stage and sector, the compelling financial yield of growth-oriented subscription driven software solutions, and the COVID-accelerated transition to a dramatic focus on all things B2C.
  • Cross-border exportation of North American SaaS and tech-enabled services offerings into emerging markets is on the rise. This trend is commensurate with the rise of locally-domiciled high growth platforms targeting upskilling, experiential tech-enabled apprenticeships, retraining rapidly transitioning workforce needs, and commercializing next generation human capital optimization platforms, which will be expanding globally across the blue, gray, and white-collar segments.
  • Online and hybrid learning models in preK-12 education are here to stay but will take years to perfect. The preK-12 landscape has been forced to fix inequitable service and educational delivery models, as schools found themselves under the glaring spotlight during government lockdowns from parents, students, and the media who expected successful educational support systems and effective on-line learning outcomes. Educational institutions and service providers will need to address, invest in, and maintain best-in-class online learning capabilities (vs. commoditized, “check the box” remote learning) tied to proven improvement in learning outcomes to deliver equitable and effective results. While the expansion of private pay models to supplement school gaps has gained traction in the short term, it is not moving fast enough to support the need nor to represent whole scale replacement of the incumbent K-12 education system.
  • Human capital optimization will re-dimensionalize the entire ecosystem of post-secondary and corporate learning as new COVID-catalyzed education delivery models explosively emerge. Upskilling, credentialing, certifying, enrichment-driven lifelong learning, and career-related skills attainment will continue to rapidly modify and evolve the DNA of universities, boot camps, Learning Experience Platforms (LXP), and legacy corporate L&D models as new business models find a niche, raise capital, and take share.
  • The solopreneur and solopreneur enablement educational technologies will create significant competitive tension to existing innovators in the experiential learning and alternative credential ecosystem. This marketplace model phenomenon is driven by a combination of the corporate and industry need; the individuals’ capability to capture, commercialize, promote, and monetize their knowledge; and the maturation of cloud technology to support bespoke education franchises at scale. 
  • Holistic approaches to learning anything about everything will be front and center. Learning will be embedded within 1) university-branded short form courseware, 2) next generation pricing models in high quality boot camps, 3) talent and content marketplaces, 4) AI and machine learning driven just-in-time learning, 5) social community-supported training and Q&A, and 6) content utility platforms allowing individuals to build, market, sell and deploy their knowledge seamlessly and efficiently.

We look forward to discussing these trends and their impact on your business over Q1, and supporting you in navigating the market shifts, capital market opportunities, and the identification of growth opportunities. Please reach out to us to continue the dialog as we would be pleased to discuss how we can be assistive to your needs in 2021 and beyond.

Wishing you much success in the year to come!

Best Regards,

Chris Curran 
Founder & Managing Partner
Tyton Partners
ccurran@tytonpartners.com

Vivek Kamath
Partner
Tyton Partners
vkamath@tytonpartners.com

About Tyton Partners

Tyton Partners is the leading provider of investment banking and strategy consulting services to the global knowledge and information services sector. With offices in the United States, the United Kingdom, and Europe, the firm has an experienced team of bankers and consultants who deliver a unique spectrum of services from mergers and acquisitions and capital markets access to strategy development that helps companies, organizations, and investors navigate the complexities of the education, media, and information markets. Tyton Partners leverages a deep foundation of transactional and advisory experience and an unparalleled level of global relationships to make its clients’ aspirations a reality and to catalyze innovation in the sector.