Education Industry News

Published July 1, 2001

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 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 Announce Partnership

On April 30, TestU, an online test preparatory company for the K-12 market, and, a provider of online courses for high school students, announced a strategic partnership. The partnership will leverage’s course curriculum by providing clients with test preparatory services through TestU’s Mini Test Prep Center. / Acquires Real Time Learning

On May 14,, 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. 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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