The combined entity will be majority owned by Veritas Capital. But private equity firms still want their exits and are posturing for potential future IPOs through additional M&A or minority stake sales.Īn early example of that came last September when Blackboard, a Washington DC-based edtech company backed by Providence Equity Partners, announced a merger with Anthology, a Boca Raton, Florida-based provider of higher education solutions backed by Veritas Capital and Leeds Equity Partners. The decline has put the brakes on IPO activity and the edtech sector is no exception. Since hitting a record high in early January, the Standard & Poor’s 500 index has fallen 18% amid the Federal Reserve’s interest rate hikes, war in Ukraine and China’s economic slowdown as it battles the pandemic. Worries about rising inflation and interest rates first surfaced last summer. ![]() By number of transactions, 2022 is on pace to meet 2021’s record haul of 127. In 2021, a record USD 10.2bn-worth of capital raising and M&A deals took place, a nearly 50% increase in value from the prior year, according to Dealogic. That should further boost edtech M&A, which along with fundraising activity had already reached heady levels during the pandemic. Now, many large private equity-backed edtechs that were seen as likely near-term IPO candidates are instead looking to mergers and acquisitions as an interim step or even an alternative exit. ![]() Since then, however, the stock market has tanked. The strongest initial public offering market in years then saw the successful debuts of several edtech companies in 2021, including Coursera, Duolingo, Instructure, Powerschool and Udemy. That fueled record growth for even fledgling education technology companies, prompting robust capital raising at high valuations. When the COVID-19 pandemic closed classrooms, demand for remote learning tools from education institutions and corporations soared.
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