Changing Course: PE Pivots Away from B2C Education, Toward B2B
March 14, 2014
Private equity firms have been shying away from B2C-focused educational services companies recently, according to the PitchBook Platform, and instead have concentrated on educational services companies in the B2B market.
Since the start of 2007, 300 U.S.- or Canada-based companies in the education industry have brought in PE capital. Between 2009 and 2013, investors pivoted away significantly from the B2C services corner of the industry; in 2009, B2C investments accounted for 72% of the year's overall education-focused activity, but that percentage was pared down every year until 2013, when B2C accounted for only 29%. Put another way, activity whittled down from the 34 deals that were recorded in B2C companies in 2009 to only 11 deals last year, a 68% decrease in five years.
Compare that to B2B-focused educational services deals, which accounted for only 17% of the year's education-focused activity in 2009, but their share increased every year until 2013, when they accounted for 61%. The deal count also grew incrementally every year from 2009 (eight deals) until 2013, almost tripling at 23. There's been a noticeable increase in the attention paid to training services providers, perhaps due to increases in government regulations and stricter standards for business practices.
PitchBook Platform users can click on the chart to customize it.