Since 2010, the yearly PE deal count climbed similarly to VC’s, albeit not as dramatically, moving from 69 investments in education companies in 2010 to a high of 89 in 2012, followed by a slight decline to 85 in 2013. Much of this growth can be attributable to a jump in the number of add-ons in the space, from 11 in 2010 to 25 last year. 2014 is on pace to match 2012’s deal activity, with 29 deals logged through May 6.
VC investment in education startups, on the other hand, has been increasing much more over the past few years. There were 140 VC financings in education companies in 2012, and $739 million of capital invested in 2013.
PE tends to focus more on established companies like Skillsoft, rather than disruptive startups. Of course, PE firms, much like VC firms, can spot industry trends; most of the bigger PE deals involve educational software and tech companies. But PE firms also invest in companies like childcare nursery chain Busy Bee Group and INSEEC Group, which operates business schools in France, while in general VC focuses more on B2C, software-focused education companies. However, given the recent VC funding of companies like AltSchool, a network of microschools, and CommercialTribe, which offers a social learning platform for salespeople, perhaps that’s set to change.