Has the momentum generated by the for-profit education sector weakened? Consider recent industry news:
- several company announcements of staff reductions;
- an estimated 30 percent write-down, totaling more than $5.1 billion, of 1999-2000 investments;
- a drop of 70 percent in first quarter 2001 venture capital investments compared to a year ago.
But Adam Newman of Eduventures.com sees several factors pointing to the industry’s long-term success.
Says Newman, “today’s contraction of venture capital in the education space is a healthy event; similar to naturally occurring forest fires that strengthen an ecosystem by clearing away excessive overgrowth, the thinning of the number of vendors in crowded markets and/or with unsustainable business models ultimately serves to strengthen private sector education.”
Beacon Educational Management Plans Share Sale
On May 8, Beacon Educational Management, Inc., a provider of school management services to charter and district schools, announced plans to sell $33 million in shares.
Delisting Warning for LearningStar Corp.
On May 7, LearningStar Corp., a developer of educational products for the pre-K-12 market, announced it received notification of possible delisting from Nasdaq due to failure to meet the requirement of an $18 million minimum public float market value. The company has requested a hearing from Nasdaq.
Riverdeep to Acquire Teacher Universe
On May 17, Riverdeep Group, a developer of K-12 learning solutions, announced it will acquire substantially all the assets of Teacher Universe, Inc., a wholly owned subsidiary of Knowledge Universe that provides professional development and science curriculum resources for the K-12 market. In addition, Riverdeep and Knowledge Universe have announced a partnership to co-promote each other’s products.
Scott Foresman Partners with TIE
On May 9, Scott Foresman, the elementary school publisher of Pearson Education, and TIE, a provider of computer-based learning information management systems, announced a partnership whereby TIE technology will power a co-developed electronic curriculum guide and assessment service for the Scott Foresman Reading programs for grades K-6.
Siboney Buys The Denali Project
On May 8, Siboney Learning Group, a publisher of educational software for the K-12 market, announced it acquired the publishing assets of The Denali Project, publisher of Summit Software, an instructional software program with over 900 integrated reading and mathematics lessons for grades 3-8.
TestU and Class.com Announce Partnership
On April 30, TestU, an online test preparatory company for the K-12 market, and Class.com, a provider of online courses for high school students, announced a strategic partnership. The partnership will leverage Class.com’s course curriculum by providing clients with test preparatory services through TestU’s Mini Test Prep Center.
Tutor.com Acquires Real Time Learning
On May 14, Tutor.com, a provider of online tutoring for students, announced it acquired Real Time Learning, a provider of online tutoring services for public libraries, community-based organizations, and schools. Tutor.com will assume RTL’s online tutoring contracts with public libraries and other organizations.
Two Acquisitions by WRC Media
On May 10, WRC Media, Inc., an educational publishing and media company for the K-12 market, announced it had acquired Lindy Enterprises, a developer of curriculum-based skills assessment and test preparation products. The company also announced it completed acquisition of ChildU, a provider of supplementary online curriculum for grades K-12.
Zany Brainy Files for Chapter 11
On May 16, educational toy provider Zany Brainy announced it had filed for Chapter 11 bankruptcy protection, attributing the decision to slow sales, a problematic acquisition of Noodle Kidoodle, Inc., and a money-losing Internet venture with Online Retail Partners. Subject to bankruptcy court approval, Zany Brainy has secured $115 million debtor-in-possession financing from Wells Fargo Retail Finance LLC.
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