What a second quarter.
As the pandemic reached global proportions and entire workforces shut down, laid off large numbers or moved to remote operations, the training world continued to spin — albeit, perhaps more slowly than normal. Organizations scrambled to move training online, and providers worked to help them do so, through their existing offerings or brand-new ones.
A recent Harvard Business Review article by Mark Herndon of the M&A Leadership Council and John Bender of M&A Partners asked the question, “Is the coronavirus pandemic and corresponding economic downturn a time to halt acquisitions or pursue them?”, noting examples of both. The M&A Leadership Council surveyed 50 C-suite executives and corporate development leaders and found that:
- About half report a “temporary pause” of current deal-making.
- A little over one-quarter report that “their anticipated future deal volume for Q2-4 2020 is expected to be substantially reduced.”
- About half of acquirers expect to stay “on temporary pause” until economic recovery is more certain.
- Executives who are “still pursuing acquisitions … [are] moving quickly to exploit opportunistic M&A hotspots,” pointing to Verizon’s acquisition of BlueJeans Network as an example.
Meanwhile, data from Willis Towers Watson indicates that global M&A deals reached their lowest level in more than 10 years this quarter, driven largely by reduced activity in North America and the U.S. in particular.
What did mergers, acquisitions and other deals look like for the training industry this quarter? We still saw a high level of deal-making, perhaps reflecting the importance of training in times of crisis and the increased demand in technologies that support remote learning. Here’s a breakdown by market segment:
Assessment and Evaluation
Emtrain, described in the press release as “an online workplace culture platform that helps companies diagnose, benchmark and prevent bad workplace culture outcomes,” received $8 million in growth capital funding led by Education Growth Partners, a private equity firm focused on human development and workplace companies.
Traitify, a personality assessment software as a service (SaaS) platform, announced a $12 million funding round led by JMI Holdings, LLC.
At a time when health, safety and risk management are more important than ever, the compliance training market saw a lot of activity:
- ALICE Training Institute, NaviGate Prepared and SafePlans merged to create Navigate360, a safety technology, education and services company.
- Living Security, a security awareness software company, raised $5 million in a Series A funding round led by Silverton Partners.
- TRC® Healthcare, a medication advisory and learning solutions company, acquired CriticalPoint, LLC, a training company focused on sterile and non-sterile compounding.
- NextStep, a mobile learning and job placement company aimed at training certified nursing assistants (CNAs), announced $3.6 million in funding from Springrock Ventures, JAZZ Venture Partners, Learn Capital’s LearnStart fund and the managing directors of Pioneer Square Labs.
- Private equity firm LLR Partners invested in TrueLearn, a supplier of online test preparation and data analytics services to health care education and training institutions.
- Ethena, an anti-harassment training SaaS company, raised $2 million in a seed funding round led by GSV.
- Headspace, a meditation app company, closed $47.7 million in equity funding. Notably, Headspace offered free premium subscriptions to health care professionals after the pandemic struck the U.S.
- Private equity firm Falfurrias Capital sold American Safety Council, an online safety training and certification provider, to Ridgemont Equity Partners.
- KPA, a provider of environment, health and safety (EHS) and workforce compliance software, consulting and training, acquired Multimedia Training Systems, a company whose safety training is used by more than 90% of all North American steel mills, according to the press release.
eLearning, more important than ever for the many organizations whose employees are working from home to stay safe, also saw some deals this quarter:
- eLearning Brothers acquired Trivantis and Edulence, adding the Trivantis authoring tool, Lectora; its virtual reality (VR) course builder, CenarioVR; and Edulence’s learning management system (LMS), Knowledgelink.
- eLearning Brothers also received a $38 million investment from RLG Capital and Trinity Private Equity Group
- Levine Leichtman Capital Partners Europe, in partnership with its management team and founding partners, acquired SiPM, an eLearning company for blue-chip corporations.
- Degreed announced a $32 million funding round led by Owl Ventures, bringing its total funding to $182 million.
- Aprende Institute, an online education platform provider for vocational skills training in the U.S. Spanish-speaking market and Latin America, raised $1.6 million in seed funding from Angel Ventures, Artisan Venture Capital, 500 Startups, Claure Group and Latin American angel investors.
- GO1.com, an online learning content hub, announced over $40 million in a Series C funding round led by Madrona Venture Group and SEEK, bringing its total funding to over $80 million.
IT and Technical Training
In information technology (IT) and technical training:
- Cyberbit Ltd., a cyber range training and simulation platform provider, received a $70 million investment from Charlesbank Capital Partners.
- Carrick Capital Partners, an investment firm focused on software companies, acquired Flatiron School, a technical bootcamp, from WeWork.
- Intrepid Solutions and Services, an IT services provider for the U.S. intelligence community, completed the acquisition of a business unit from Delta Solutions and Strategies, an IT company whose services include training.
There were only three deals this quarter in the largest segment of the training market, leadership development:
- Hone, a manager training platform company, raised a $2.75 million seed extension round of funding from new investors Firework Ventures and NextGen Venture Partners and existing investors Cowboy Ventures, Harrison Metal, Slack Fund and Reach Capital. This round brought its total funding to $6.4 million.
- Ignite, a leadership development company, merged with sr4 Partners, an organizational health consulting company.
- Lead Inclusively, a diversity, equity and inclusion (DEI) training app company provider, announced a $1.5 million funding round led by angel investors Christopher Craig and Fran Craig.
Always a popular segment for mergers, acquisitions and investments, learning technologies again saw a lot of activity this quarter:
- Lessonly, an online training platform company, announced a $15 million Series C funding round led by AXA Venture Partners.
- Paylocity, a cloud-based human resources (HR) and payroll software company, acquired VidGrid, a video platform company.
- Learn In, an “upskilling-as-a-service platform” provider co-founded by Degreed’s David Blake and Eric Sharp, launched with $3.5 million in seed funding from Album, GSV and Firework Ventures (a fund focused on the “future of work”). Learn In enables companies to offer employee sabbaticals.
- Guru, a collaborative management software provider, announced a $30 million Series C funding round led by Accel.
- Professional services company Cognizant acquired Collaborative Solutions, a provider of Workday enterprise cloud applications for finance and HR functions.
- Vantage Point, which provides VR-based training to increase employee empathy and learning retention, announced a $2.25 million investment from individual investors.
- IntelliBoard, a reporting and analytics platform for LMSs, closed $3.4 million in Series A funding from Connecticut Innovations, Flashpoint VC, Smarthub VC and LETA Capital.
- Poplar, an augmented reality (AR) platform, closed a $2.1 million seed round led by Fuel Ventures.
- Totara, an HR and training software company, and private equity firm Five V Capital announced an agreement in which Five V would acquire a majority ownership interest in Totara.
- Game-based learning platform provider Kahoot! announced $28 million in new equity through the private placement of 7.5 million new shares and 16.5 million existing shares for a total of $90 million.
- Apprentice.io, a provider of an intelligent software platform and an AR collaboration tool for life science manufacturing companies, received a $7.5 million investment from Insight Partners.
- Drishti Technologies, which uses artificial intelligence (AI) to improve manufacturing performance, announced a $25 million Series B round led by Sozo Ventures.
- Adaptive learning platform provider Trivie closed a $5 million Series A round led by Cottonwood Venture Partners (CVP).
- Grain, which provides technology that enables users to capture, save and share content from a Zoom call, raised $4 million in two seed rounds from investors including Acrew Capital, Founder Collective, Peterson Partners, Slack Fund, NextWorld Capital and Kickstart Seed Fund.
- Vizetto Inc., an online presentation and remote teamwork solutions provider, closed an oversubscribed $3 million seed round led by OW Toad, Florida Funders and Hudson Valley Equity Group.
- Teooh, a “virtual gathering platform,” announced funding from Spark Capital and General Catalyst that brought its total seed funding to $4.5 million.
Performance Management and Human Capital Management
In the segment of the market aimed at helping organizations manage their talent, there were four deals:
- Paradox, a conversational AI platform for candidate and employee communications, announced a $40 million Series B round led by Brighton Park Capital.
- Bonusly, a recognition and rewards platform provider, announced a $9 million Series A round led by Access Venture Partners.
- Workhuman, a social recognition and continuous performance management platform, announced an investment from the alternative asset manager Intermediate Capital Group (ICG) that valued Workhuman at $1.2 billion.
- Neobrain, a French HR tech company that uses AI to support teams during crisis and change, received a €3 million ($3.38 million) investment from venture capital firm Breega.
Sales Training and Enablement
The show must go on, and so must sales — and, therefore, sales training. In the sales training and sales enablement market segment:
- Xtiva, a sales performance management platform provider serving the financial services industry, announced a $10 million funding round led by Recurring Capital Partners.
- StorySlab, a sales enablement technology company, closed a $2.7 million funding round led by Armory Square Ventures.
- Prodoscore, which supports employee management and productivity, closed a Series A round led by entrepreneur and venture capital investor Troy Carter.
- Templafy, a document creation and automation provider, acquired Napp, a sales enablement platform.
- Coastal Cloud, a Salesforce consulting partner, announced funding from Sverica Capital Investment.
Also this quarter, the previously announced mergers of Richardson and Sales Performance International and of Selleration and DigitalChalk came to fruition with new names: Richardson Sales Performance and Sciolytix, respectively.
Finally, in workforce development:
- WorkJam, a digital workplace solutions provider, closed an oversubscribed $50 million Series C round led by Inovia Capital.
- Workstream, provider of a platform for onboarding hourly workers, announced a $10 million Series A funding round led by Keith Rabois of Founders Fund.
- Guild Education, which upskills frontline workers, announced its first acquisition: Entangled, an education and workforce technology firm.
- PAIRIN, social enterprise striving to make education and hiring relevant and equitable, closed a $2.1 million tranche of its Series A funding round led by New Markets Venture Partners.
On a different note, Skillsoft entered into a restructuring support agreement (RSA) with first and second lien lenders to reduce its debt from $2 billion to $410 million. As part of this process, the company and some of its affiliates filed Chapter 11 bankruptcy. It also received a commitment of $60 million in debtor-in-possession (DIP) financing from some of its first lien lenders and reported that this financing, along with cash from its business, “is expected to provide ample liquidity to support the Company during the restructuring process,” according to the press release. Skillsoft expects to have liquidity of $50 million when it completes the restructuring process.
Here at Training Industry, we continue to monitor the market and provide updates at TrainingIndustry.com. Feel free to drop us a note at firstname.lastname@example.org to share your thoughts and predictions.