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IBIS Capital | e-Learning
A European
Perspective on e-
Learning
IBIS Capital | A European Perspective on e-Learning
Important Notice The information in this report (“Report”), which does not purport to be comprehensive, has been prepared by IBIS Capital Ltd (“IBIS”) and has not been independently verified and may be subject to updating, completion, revision and amendment and such information may change materially. Although reasonable care has been taken to ensure that the facts stated in the Report are accurate and the opinions expressed are fair and reasonable, no representation or warranty, expressed or implied, is or will be made, and no responsibility or liability is or will be accepted by IBIS or by any of their respective shareholders, officers, employees or agents as to or in relation to the accuracy or completeness of the Report or any other written or oral information made available to any party and any liability therefore is hereby expressly disclaimed. The Report is being supplied to recipients solely for their information and may not be reproduced or redistributed, in whole or in part, to any other person, or published, in whole or in part, for any purpose without the prior consent of IBIS. Where source material has been reproduced the copyright remains the property of the copyright owner and material may not be reproduced in any form whatsoever without the owner’s prior consent. The distribution of the Report in certain jurisdictions may be restricted by law and therefore any person into whose possession the Report comes should inform himself about and observe any such restriction. IBIS Capital | A European Perspective on e-Learning 2
Glossary Adult education: Self-learning and personal development Capital expenditure: Expenditure on assets that last longer than a year, including construction, renovation or major repairs to buildings as well to equipment, furniture and computers Current expenditure: Current expenditure covers goods and services bought and used during the year Corporate training: Professional training and learning and development programmes for firms EM: Emerging markets Higher Education (HE): Formal education post 18 years of age Instructor-Led Training (ILT): Usually refers to traditional classroom training, in which an instructor teaches a class of students. The term is used synonymously with on-site training and classroom training ISCED 0: Pre-primary education: Pre-primary education is defined as the initial stage of organised instruction. It is school- or centre based and is designed for children aged at least 3 years ISCED 1: Primary education: This level begins between 5 and 7 years of age, is compulsory in all countries and generally lasts from four to six years ISCED 2: Lower secondary education: It continues the basic programmes of the primary level, although teaching is typically more subject focused. Usually, the end of this level coincides with the end of compulsory education ISCED 3: Upper secondary education: This level generally begins at the end of compulsory education. The entrance age is typically 15 or 16 years. Entrance qualifications (end of compulsory education) and other minimum entry requirements are usually needed. Instruction is often more subject-oriented than at ISCED level 2. The typical duration of ISCED level 3 varies from two to five years ISCED 4: Post-secondary non-tertiary education: These programmes straddle the boundary between upper secondary and tertiary education. They serve to broaden the knowledge of ISCED level 3 graduates. Typical examples are programmes designed to prepare pupils for studies at level 5 or programmes designed to prepare pupils for direct labour market entry ISCED 5: Tertiary education (first stage): Entry to these programmes normally requires the successful completion of ISCED level 3 or 4. This level includes tertiary programmes with academic orientation (type A) which are largely theoretically based and tertiary programmes with occupation orientation (type B) which are typically shorter than type A programmes and geared for entry into the labour market ISCED 6: Tertiary education (second stage): This level is reserved for tertiary studies that lead to an advanced research qualification (Ph.D. or doctorate) K-12: Formal education period up to 18 years of age Learning Management System (LMS): Software that automates the administration of learning/course delivery events. The LMS registers users, tracks courses in a catalogue, records data from learners and provides management reports. An LMS is typically designed to handle courses by multiple publishers and providers. It usually does not include its own authoring capabilities, instead, it focuses on managing courses created by a variety of other sources m-Education: Any form of e-Learning delivered to a mobile device, e.g. via smartphones or tablets Programme for International Student Assessment (PISA): International study that was launched by the OECD in 1997. It aims to evaluate education systems worldwide every three years by assessing 15-year-olds' competencies in the key subjects: reading, mathematics and science Rote Learning: A memorisation technique based on repetition RoE: Rest of Europe RoW: Rest of the world Shareable Content Object Reference Model (SCORM): A set of standards and specifications for e-Learning training materials Tin Can API: An e-learning software specification that allows learning content and learning systems to speak to each other in a manner that records and tracks all types of learning experiences Talent Management System (TMS): An integrated software suite that manages performance management, learning and development and other talent capital related tasks Virtual Learning Environment (VLE): A web-based education system that models traditional education in a virtual environment Web-based Training (WBT): Any instructional event that can be accessed via the Internet or the Web IBIS Capital | A European Perspective on e-Learning 3
Table of Contents
5 – 20 The European e-Learning Market
21 – 27 Active European e-Learning Corporates
28 – 34 The European Education Market
35 – 38 The European Corporate Learning Market
39 – 44 General European Investment Trends
45 – 46 The European EdTech 20
47 – 57 Appendix
─ A Closer Look at the European Education Market
IBIS Capital | A European Perspective on e-Learning 4IBIS Capital | A European Perspective on e-Learning
The European e-
Learning Market
IBIS Capital | A European Perspective on e-LearningThe European e-Learning Overview
Significant Market Size Split Between Corporate & Academic
1 4
Of the $4.1tn trillion spent on education and The spend on academic education and learning
training, approximately 25% is in Europe, making it outweighs the spend on corporate training by about
the 2nd largest market to North America. In the 18x. There is also a regional split between northern
schools market, Europe boasts 27% more teachers and southern Europe where for example in the
than the US, with 4.6m teachers as compared to Nordics workers are 4x more likely to be receiving
3.6m in the US training than in southern Europe
A Highly Fragmented Market European M&A still Nascent
2 5
The European e-Learning market is a highly The level of activity within e-Learning M&A in
fragmented market comprising up to 3,000 Europe is currently limited, with very few deals over
predominantly small entrepreneurial companies. $20m. The market remains in development. The
The fragmentation represents in part the early stage increase in venture investment is expected to fuel
nature of the industry and the market difference expansion and in due course increase strategic
within Europe activity
Limited Invested Capital to Date IBIS Capital’s View on Europe
3 6
Although the relative difference in the size of The evidence of increased investment in Europe in
markets between the US and Europe is not the sector and anecdotal support that companies are
significant yet there is a big difference in the volume experience an upsurge in activity points to a market
of venture deals in e-Learning. Since 2007, 60% of on the turn. We expect the e-Learning market to be
global venture investments in e-Learning have been characterised over the next 3 years by a significant
in the US. Europe only accounts for 6% over the increase in investment in the sector as well as a level
same period of consolidation as companies seek scale
Source: McKinsey, Eurostat, Capital IQ, OECD, Eurypedia, National Statistic Offices, Ministries of Education
IBIS Capital | A European Perspective on e-Learning 6The EdTech Hype Cycle
Years to Adoption
0-2 years
Expectations 2-5 years
5-10 years
>10 years
Adaptive Learning
BYOD Strategy Digital Preservation of Research Data
Gamification
MOOC Web-based Office Productivity Suites
Social Media in Education Self-publishing
Social Learning Platform for Education ePortfolios
Big Data
Mobile Learning Open Source Portals
Personal Learning Networks
Learning Record Store ITIL Game Consoles as Media Hubs
E-textbooks Web-based tools for education
“Tin Can” Initiative SaaS Administration Applications
Cloud email for staff and faculty
Media Tablets
Virtual Environments
Learning Repositories Lecture Capture and Retrieval Tools
Time
Technology Peak of Inflated Trough of Slope of Plateau of
Trigger Expectations Disillusionment Enlightenment Productivity
Source: IBIS Capital, Gartner
IBIS Capital | A European Perspective on e-Learning 7Global Education and Corporate Learning Expenditure
2011A Global Education Expenditure by Geography
Key Points
Pre-K-12 K-12 Post-K-12 Vocational Developed
($bn) Emerging Asia- In 2011, global education expenditure
1,500 Asia- Pacific Europe
1,266 Pacific 14% 25% was $3.9tn with global corporate
17% learning expenditure amounting to
966 $207bn
1,000
Latin
668
558
America Similar to other regions, K-12
8%
500 represents the largest segment
319 Middle nominally within the European
126 East &
Africa education sector
0 3%
North
Middle Latin Emerging Developed Europe North America From a global perspective, Europe’s
East & America Asia-PacificAsia-Pacific America 33%
Africa contribution is largest within the Pre-
K-12 segment
2011A Global Corporate Learning Expenditure by Geography
($bn) Breakdown of 2011 Total Expenditure
74
75 71
Developed
Europe
Asia-
34% K-12
Pacific
19% 58.6%
50
40 Emerging Pre-K-12
Asia- 6.6%
Pacific
7%
25 Corporate
Latin
14 America 5.0%
6 3% Middle
2 East & Vocational
0 Africa 4.8%
Middle Latin Emerging Developed Europe North 1% North
East & America Asia- Asia- America America Post-K-12
Africa Pacific Pacific 36% 25.0%
Source: McKinsey
IBIS Capital | A European Perspective on e-Learning Note: K-12 is used as a synonym for formal education from kindergarten to 18 years of age 8Growing Education Market Driven by Growth of e-Learning
Global Education Expenditure Forecast by Subsectors
Key Points
($bn) Global education expenditure market is
10,000 projected to grow at 7.4% until 2017
For profit
6,334 Test preparation / tutoring market
8,000 e-Learning expenditure projected to
5,482 Global language learning
grow at 23.0% p.a. to $256bn from
6,000 4,435 Serious gaming
2012P-2017P which comprises:
Child care
4,000 ‒ K-12 CAGR of 34.0%
Social learning / communities
‒ Higher Education CAGR of 28.0%
Corporate & government learning
2,000 ‒ Corporate market CAGR of 13.0%
Post secondary
K-12
0
2012P 2015P 2017P
e-Learning Expenditure Forecast by Subsectors
($bn)
300
256 Corporate education
Higher education
200 K-12
167
91
100
0
2012p 2015P 2017P
Source: IBIS Capital estimates, GSV education report, Ambient Insight research
IBIS Capital | A European Perspective on e-Learning 9Government Expenditure is Vital to Education
Education Expenditures as a % of GDP (2000 vs. 2008)
Key Points
2008
10% 2000 Targeted government spending is an
8% important stimulus for enhancing the
6% skills within the labour force. In turn,
investment in skills needed to drive
4%
economic prosperity
2%
0% State of the labour market impacts
Iceland
Belgium
Mexico
Spain
Ireland
France
Korea
Canada
Poland
Germany
Italy
Austria
Brazil
OECD Average
Israel
Chile
Finland
Japan
Portugal
Netherlands
Hungary
United States
Norway
Denmark
Sweden
Switzerland
Australia
United Kingdom
Czech Republic
Slovak Republic
demand for vocational training:
‒ changes to the economic base result
in changes to the skills requirement
‒ unemployed seek to re-train in order
to return to the labour market
Proportions of Educational Expenditure from Public and Private Sources (ISCED 0-6)
Private funding
Public funding
31%
40%
17%
18%
16%
15%
13%
13%
13%
12%
10%
14%
10%
13%
10%
10%
9%
10%
9%
8%
8%
6%
20%
9%
6%
5%
n/a
n/a
n/a
n/a
5%
0%
0%
2%
3%
0% 3%
20%
40%
60%
80%
100%
BE
BG
EE
EU
EL
PT
CZ
ES
PL
CH
DE
CY
MT
AT
RO
DK
IE
FI
FR
IT
IS
LV
LT
LU
NL
NO
HR
TR
HU
SK
UK
LI
SI
SE
Source: Eurostat, UOE, World bank
IBIS Capital | A European Perspective on e-Learning 10Investment Trends: Academic and Corporate e-Learning
Increased Focus on the Academic Market
Direct Investments in the Academic e-Learning Market (1) Key Points
($m) 2008-2012 Est. 48% Direct investments in the academic e-
CAGR (%) (1) Learning market have recovered from the
750
lows of 2002 to 2004
600
Since 2004, there has been a significant
450
increase in funding within the academic
e-Learning market
300
Investment trends in corporate e-
150 Learning are correlate to the general
economic environment, most likely as a
0 consequence of the fluctuations of
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 corporate spend on training during the
economic cycle
Direct Investments in the Corporate e-Learning Market (1)
Since 1999, direct investments in the
($m) corporate e-Learning market hit an all-
750
time low of $45m in 2010
600
450
300
150 (29%)
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: Ambient Insight
IBIS Capital | A European Perspective on e-Learning (1) Estimated based on Ambient Insight’s report titled “The 2012 Boom in Learning Technology Investment ”. The scope 11
of the data includes angel, venture capital, and private equity investmentsThe Rise of Consumer-Facing e-Learning
Direct Investments By Type of Target Customer (1)
Key Points
Deal Volume Deal Value
Major themes in 2012:
(Volume) ($m)
80 750 Investment in consumer-facing e-
2010 2011 2012 2010 2011 2012 Learning companies has increased
60 600
nearly threefold year-on-year
450
40
300 By contrast investment in corporate-
20 150 facing e-Learning companies fell
0 0
(2) (2)
Social learning has attracted significant
interest from the investment
community with an annual growth rate
in new investment over the last 3 years
Direct Investments in Consumer-Facing Direct Investments by Emerging Product
of 224%
e-Learning Companies (1) Type (1)
Mobile-based e-Learning continues to
($m) ($m) 77% 224% 19% receive
750 300
600 250
200 2010-12
450 CAGR (%)
150
300
100
150 50
0 0
2004
2010
2001
2011
2012
2002
2000
2003
2005
1999
2006
2008
2009
2007
Cognitive Social Learning Mobile Learning
Learning
2010 2011 2012
Source: Ambient Insight
IBIS Capital | A European Perspective on e-Learning (1) Estimated based on Ambient Insight’s report titled “The 2012 Boom in Learning Technology Investment ”. The scope 12
of the data includes angel, venture capital, and private equity investments
(2) Refers to higher educationSignificant m-Education Growth and App Downloads
m-Education Market by Region(1)
Key Points
($bn)
40.0 37.8 2011-2020 CAGR The investment in m-Education is
estimated to have grown annually by
North America: 31%
30.0 28.3 approximately 19% for the last 3 years,
Europe: 29% according to Ambient Insight
21.4
20.0 16.2 Developied Asia-Pacific: 23%
The Serious Gaming & Gamification
12.4
9.5 Emerging Asia-Pacific: 54% sector is forecasted to grow from
10.0 7.3 $2.0bn in 2012 to $7.4bn in 2015
4.4 5.6
3.4 Latin America: 54%
0.0 Middle East & Africa: 50% Games and simulation based tools are
2011A 2012P 2013P 2014P 2015P 2016P 2017P 2018P 2019P 2020P expected to grow at a 37% CAGR to
2020
Free Education App Downloads(2) Paid For Education App Downloads(2)
2009-2011 CAGR (%) 2009-2011 CAGR (%) Education app downloads are greater
than the overall average in both free
News 342 Business 221 and paid for downloads
Travel 270 Healthcare & Fitness 213
Education 239 Music 212
Healthcare & Fitness 234 Social Networking 206
Lifestyle 232 Books & Reference 201
Social Networking 223 News 175
Books & Reference 226 Entertainment 185
Music 226 Education 180
Business 193 Sports 174
Sports 177 Lifestyle 171
Entertainment 175 Games 156
Games 145 Travel 136
Overall average 188 Overall average 178
Source: McKinsey, Research reports
IBIS Capital | A European Perspective on e-Learning (1) m-Education includes all internet connected devices, such as smartphones or tablets 13
(2) List of categories not exhaustiveGlobal e-Learning Fundraising Summary
Direct Investment and Deal Volume Since 2007(1)
Key Points
($m)
3 5 3 4 6 10 2
2,500 The US is the most active global fundraising
2,024 market for e-Learning, accounting for 59.7%
2,000 Total Capital Raised of total deals, with high-growth markets,
(Global)
India and China, trailing with 11.3% and
1,436 Total Capital Raised
1,500 (Europe) 8.4% respectively(2)
1,192
1,063
1,000
928 857 Volume Since 2007, Europe accounted for 6.0% of
(Europe)(3) global deal volume
430
500
107 As consumer-faced e-Learning companies
30 23 31 21 42 45
are on the rise, the distribution sector has
0
2007 2008 2009 2010 2011 2012 2013 YTD been attracting an increasing volume of
capital
Global Education Fundraising Volume Global Education Fundraising Volume The two largest fundraisings in 2013 were
by Geography Since 2007 by Sector Since 2012 lynda.com (Accel, MeriTech, Spectrum
investing $103m) and Open English
(Insight, Redpoint, TCV investing $65m)
− The lynda.com investment was the first
59.8%
11.3%
8.4%
6.0%
4.9%
4.6%
2.9%
2.0%
Management major round for the company since being
Systems founded in 1995
17%
− The investment represents the largest
Distribution Content single US venture financing round on
US India China Europe RoW Canada Australia UK 74% 9% record for an online education company
− Open English previously raised a $43m
…With Europe accounting for 6.0% of global round in May 2012 from Flybridge,
e-Learning fundraising since 2007 and the Insight, Kaszek and Redpoint bringing it’s
total capital raised to $120m
UK accounting for 2.0%
Source: Capital IQ as at 9 Jun 2013
IBIS Capital | A European Perspective on e-Learning (1) Refers to global equity investments where transaction values are disclosed and are above $1m 14
(2) Refers to transactions since 2007
(3) Refers to transactions where the target was headquartered in EuropeUS M&A and Investment More Active than Europe
e-Learning’s Most Active Corporate Acquirers & Investors Key Points
By Number of Acquisitions and Investments (2010-2013)(1)
Pearson has been the most acquisitive e-
Acquirer / Investor # of
Company Headquarters
(Public / Private) Acquisitions
# of Investments Total Learning buyer with recent acquisitions of
Learning Catalytics, Exam Design,
Public 12 3 15
IndiaCan Education and TutorVista
Private 7 0 7
Private 4 3 7 Private equity-backed Blackboard
Public 1 4 5 (Providence Equity) has been the most
Public 2 3 5 acquisitive private company in the sector.
The most recent acquisition (Mar 2012)
Private 4 0 4
were Moodlerooms and Netspot, two
Private 3 0 3
providers of open source online learning
Public 2 1 3 technology
Public 3 0 3
Public 2 0 2 Macmillan is primarily active through its
two digital venture arms - Macmillan New
Top Global e-Learning Fundraisings in 2012 (US vs. Europe) Ventures and Macmillan Digital
Education
(2)
1 $43m 1 $6.5m The size of investments in US companies
for the top 5 deals in 2012 were on average
2 $32m 2 $5.1m 8x larger than those in Europe, despite
Europe being a larger market
3 $31m 3 $5.0m
4 $26m 4 $5.0m
5 $25m 5 $4.6m
Source: CB Insights as at 16 May 2013
IBIS Capital | A European Perspective on e-Learning (1) Refers to acquisitions and equity investments in private e-Learning companies. The list excludes financial investors 15
(2) Based in Florida despite headquarters in PanamaRecent e-Learning Fundraising Across Europe & the US
Europe
Date of Total Capital
Capital Year
Last Target Investors Company Overview Domicile Raised To Date
Raised ($m) Founded
Round ($m)
Bill Gates, Benchmark Capital, Dragoneer
Offers a social, crowdsourced platform designed for
Jun-13 35.0 Investment Group, Tenaya Capital, The 2008 35.0
researchers
Founders Fund, Thrive Capital
IBB Beteiligungsgesellschaft, Kizoo
Technology Capital, Nokia Growth Creates online and mobile-based language learning
Mar-13 10.0 2007 10.8
Partners, Reed Elsevier Ventures, VC courses
Fonds Technologie Berlin
Provides open source and agile training programmes and
Dec-12 5.0 Beringea 2003 5.0
events for software professionals
Online community that teaches people languages through
Nov-12 5.1 Undisclosed 2010 6.3
crowdsourcing
Oct-12 4.6 PROfounders Capital Free online community for learning languages 2008 9.4
United States
Date of Total Capital
Capital Year
Last Target Investors Company Overview Domicile Raised To Date
Raised ($m) Founded
Round ($m)
Bessemer Venture Partners, EPIC Best known for its Canvas learning management platform,
Jun-13 30.0 Ventures, OpenView Venture Partners, which was launched in 2011 and now counts over 6 million 2008 50.0
TomorrowVentures users in over 425 K-12 and HE(1) institutions
Capricorn Investment Group, Expansion Learning marketplace that lets students connect with
May-13 2.0 2012 2.5
VC, Learn Capital experts in one-on-one video chats
Cloud-based talent management software specifically
May-13 6.5 Mainsail Partners 2001 6.5
developed for K-12 educational organisations
American Public Education
May-13 4.0 Accredited military transition college 2011 6.5
(NasdaqGS:APEI)
Redpoint Ventures, Bill Campbell (Former Marketplace that aims to help students and teachers
May-13 7.5 2011 7.5
Chairman of Apple), Jesse Rogers connect around a range of subjects
Source: Capital IQ, TechCrunch, press releases, as at 9 Jun 2013
IBIS Capital | A European Perspective on e-Learning (1) Refers to higher education 16Global e-Learning M&A Activity
Total Deal Value and Volume of Global and European e-Learning M&A Transactions Key Points
Since 2007 and above $20m(1)
(2) (2)
North America continues to dominate
($m) 40% NR 17% 20% 24% NR 33%
activity by value and number of deals above
14,000 25 $20m
12,000 11,482
Limited European M&A opportunities
20 20
9,955 above $20m
10,000
17
8,039 Fragmented market has meant a range of
15 15
8,000
smaller acquisitions from private equity
backed companies:
6,000
10 10
− PlaySay / Babbel
4,000 3,026
6 6 − lynda.com / video2brain
1,841 5
2,000 − Desire2learn / Wiggio + Degree Compass
1,015
290 546 287 389 248 130 − Echo360 / ThinkBinder + LectureTools
1
0 0
2007 2008 2009 2010 2011 2012 2013 YTD
Global e-Learning Deal Value ($m) Eur Deal Value ($m)
Europe % of
Volume (Global)
Global Volume
Global e-Learning M&A Volume by
Sector Since 2007
% of Total Volume:
North America 50% 100%
(2)
67% 67% 47% 95% 17%
(2)
Europe 40% NR 17% 20% 24% NR 33%
Management
% of Total Deal Systems
Value: 36%
83% 100%(2) 32% 78% 87% 99% 16%
North America (2)
16% NR 54% 10% 4% NR 52% Distribution
Europe
49%
Strategic Acquirer %
40% 100% 83% 47% 71% 70% 83% Content
of Global Volume
15%
Source: Press releases, SEC filings, Capital IQ as at 9 Jun 2013
IBIS Capital | A European Perspective on e-Learning (1) European data refers to M&A transactions whereby the target’s headquarters were in Europe 17
(2) Refers to not relevant as there is no data2013: Select Global M&A Transactions
3 of the 21 Private M&A Transactions in 2013 Involved European Targets(1)
Offer Target / Target Transaction
Target Acquirer Company Overview Deal Rationale
Date Buyer HQ Metrics Value ($m)
Social collaboration tool that enables peer-to-
Adds online collaboration tools to its distance learning
Apr-13 ThinkBinder Echo360 US / US peer functionality within centralized online "Tens of thousands of users" Undisclosed
platform
study groups
Houghton
Develops and publishes educational programs,
Apr-13 Tribal Nova Mifflin Canada / US NA Increases adaptive digital content for the pre-K market Undisclosed
games and apps for pre-K audiences
Harcourt
2.3m users Expands researcher workflow offerings and builds
UK / Cloud-based research management and social (2)
Apr-13 Mendeley Reed Elsevier Over 340m documents greater engagement with its users c. $69-100m
Netherlands collaboration platform
206k research groups Allows for content to be collaborative and open
Online service for language-learning Over 16m members from c. Allows Rosetta Stone to offer its language packages (2)
Apr-13 Livemocha Rosetta Stone US / US c. $8.5m
communities 196 countries online via Livemocha’s cloud platform
Entry into US market
100k users within a month of
Develops language learning mobile software Applies PlaySay’s learnings around gameplay to
Mar-13 PlaySay Babbel US / Germany launching its iOS-based Undisclosed
products and applications Babbel's wider portfolio of services
service in May 2012
Strengthens mobile-based offering
Technology acquisition
Noodle Socially integrated LMS focused on higher Used by professors on more
Mar-13 Lore US / US Used to build another business model around Noodle Undisclosed
Education education than 600 campuses
Launch
Online free toolkit that enables users to work in 1.1m users Expand presence in US higher education market
Mar-13 Wiggio Desire2Learn US / Canada Undisclosed
groups 100k collaboration groups Opens up office in Boston, a large hub for e-Learning
Developed OpenMinds, a free platform that "acqui-hire" plus adds 5 apps
Mar-13 Root-1 Edmodo US / US allows teachers to instantly customize 5 apps Supports Edmodo’s goal of being a distribution Undisclosed
education apps channel for classroom content
Allows entry into fast-growing Indian education sector
35 schools with intention to
Feb-13 TutorVista Pearson India / UK Online tutoring and test preparation provider Supports Pearson's inorganic expansion plan within $25.7m
grow to 100 within a year
India
Online video training company offering courses 1,700 video courses Adds multi-lingual educational content
Feb-13 video2brain lynda.com Austria / US Undisclosed
in English, German, French and Spanish 400k subscribers Putting cash to work post $103m fundraising
Broadens suite of learning, e-portfolio and analytics
Degree Course recommendation engine that helps
Jan-13 Desire2Learn US / Canada Used by 3 universities tools Undisclosed
Compass students complete their degrees on time
Growing demand for data-driven tools
LearnSmart: Over 300 titles, Strengthens McGraw-Hill Education's leadership in
Provides software technologies that help
McGraw-Hill 1.5m students and has adaptive learning
Jan-13 Area9 Denmark / US content providers to develop personalized Undisclosed
Education delivered over 1bn questions Technology behind McGraw-Hill’s LearnSmart and
educational and training solutions
to students SmartBook series
c. 3k tutors
Jan-13 Tutor.com IAC US / US Online tutoring and homework help services c. 8.8 million online Large untapped growth potential c. $40m (3)
tutoring sessions to-date
Source: EdSurge, Capital IQ, TechCrunch, press releases as at 9 Jun 2013
IBIS Capital | A European Perspective on e-Learning (1) The highlighted deals above are select examples of the 21 private M&A transactions taking place in 2013 18
(2) According to TechCrunch
(3) According to The Next WebVenture Capital Funding: Europe vs. US
Total Venture Capital Deal Value By Year Key Points
27.2 11.6 9.1 9.6 7.2 4.9 22.3 20.5 14.0 18.3 23.3 22.4
($bn) The venture market in the US is
38.1
40 Europe US significantly larger than in Europe;
Difference 30.8 30.5 $26.5bn in the US in 2012 compared to
between 28.4
30 26.6 26.5 $4.1bn in Europe
US & Eur. 22.9 21.7 23.3
20.9 22.4
VC 18.6 19.7
Funding 20 15.8
12.8 Early stage investments are more
($bn) 10.9
9.3 9.5 8.5 10.1 common in the US, whereas European
10 5.7 5.0 5.1 4.1 VCs invest more in revenue generating
0 and profitable businesses
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 − Revenue generating and profitable
Europe (yoy businesses represent 59% of all first-
-40% -15% 2% 35% 24% 37% -61% 19% -43% -13% 3% -20%
growth%) time investments in Europe and 43%
US (yoy growth%) -62% -45% -11% 20% 3% 16% 16% -1% -35% 18% 22% -7% in the US (1)
Breakdown of Venture Capital Deal Volume by Investment Stage (1980-2011) The amounts invested in venture
By % of Total Volume capital and the associated valuations
56% are higher in the US than in Europe
60%
Europe US − Across all stages, average amount
50%
39% invested in the US is $5.7m and
40% 33%
$3.1m in Europe (1)
30% 25%
− Across all stages, average post-
20% 15% 17%
money valuation in the US is $18m
10% 1% 3% 3% 4% 4% and $11m in Europe (1)
0% 0.2% 0%
0%
Startup Product Production in Generating Profitable Restart NA
Development Beta Test Revenue
Avg. 1st VC Investment
2.4/2.8 3.3/6.2 3.1/4.3 3.1/6.5 4.0/10.1 1.4/3.8 NA/3.3
Size ($m) (2)
Avg. Valuation @ 1st VC
7.1/7.8 9.1/15.3 10.0/13.3 12.1/23.2 26.9/36.7 5.4/6.9 NA/12.8
Investment ($m) (2)
Source: BVCA – European Venture Capital: Myths and Facts
IBIS Capital | A European Perspective on e-Learning (1) Refers to deals between 1980-2011 19
(2) In 2005 equivalent USDEuropean e-Learning: Identifying the Key Trends
Select European
Trend Proof: Precedent Fundraisings & Acquisitions (1)
Companies
Target Buyer / Investor (2) Overview (Target) Other Geographies (3)
Babbel Reed Elsevier Online learning system for foreign languages
Livemocha / Rosetta Stone
1 “Tower of Babel” LinguaLeo Runa Capital
Cloud-based language tutorial service with focus on EnglishUp / Macmillan
ELT and Language Training teaching English to Russian speakers GlobalEnglish / Pearson
Busuu ProFounders Language learning community Open English / Insight VP
MindSnacks / Sequoia
tolingo Acton Capital Online translation platform PlaySay / Babbel
Memrise Undisclosed Supplemental flashcard game for language learning
SofaTutor Acton Capital Online tutoring platform
Online solution for sourcing offline private tutoring and TutorVista / Pearson
Tutoria Macmillan tutor.com / IAC
accessing trusted pedagogic advice in Germany
2 Online Tutoring Tutorspree / Sequoia
Mathematics tuition service, offering home visits and OnlineTutorSolutions.com
Maths Doctor Macmillan
online instruction / Credo
HeyTutor Macmillan Online tutoring platform
Through a Q&A format, helps people learn things in a
Quipper Benesse Fingerprint Digital / Corus
game-like feel
Entertainment, Reed
Provides middle and high school-level math education
PROfounders, Elsevier Ventures
m-Learning & MangaHigh
Revolution Learning
using casual games
Duck Duck Moose /
3
Serious Gaming Moshi Online game where users can adopt their own pet
Sequoia, LVP
Accel Kidaptive / Menlo
Monsters monster and go on adventures together
Ventures
Develops a series of educational apps targeted at
MindShapes Index, Richmond LocoMotive Labs /
children ages 2 -12
NewSchools
Babbel Reed Elsevier Online learning system for foreign languages
4 Social Collaboration Mendeley Reed Elseiver
Cloud-based research management and social
Scoot & Doodle / Pearson
+ collaboration platform
Grockit / Benchmark,
Content Discovery
Benchmark, Tenaya, Piazza / BVP
Management ResearchGate
Accel, Bill Gates
Leading social network for scientists
Sokikom / Undisclosed
Lore / Noodle
Source: Company websites, press releases, TechCrunch
IBIS Capital | A European Perspective on e-Learning (1) Refers to historical fundraisings and acquisitions of targets headquartered in Europe 20
(2) Where relevant it only includes select investors
(3) Refers to transactions whereby the target is domiciled outside of Europe and only includes select investorsIBIS Capital | A European Perspective on e-Learning
Active European
e-Learning
Corporates
IBIS Capital | A European Perspective on e-Learninge-Learning: Active European Corporates
Pearson
Company Snapshot Relevant News Financial Summary
Headquartered in London (UK), May-13: Camfed and Pearson launch Digital & Services Revenue 2012 Revenue by Geography (%)
founded in 1894 and employs c. 32,300 partnership for girls' education 50%
(% Sales) 45%
personnel 40%
Apr-12: Buys-out Educomp's 34% 37%
22%
59%
29% 31%
13%
6%
Operates through 3 business segments: shareholding in IndiaCan
Education, FT Group and Penguin
Apr-13: Acquires Learning Catalytics
North American Education is Pearson’s North America Europe Asia RoW
Mar-13: Invests in Scoot & Doodle
largest business, with 2012 revenue of 06' 07' 08' 09' 10' 11' 12'
£2.7bn and operating profit of £536m Mar-13: Pearson VUE acquires Exam 2012 Education Revenue 2012 Revenue by Segment (%)
Design
Since 2007, Pearson has acquired 18 by Segment (%)
companies; 14 of them were acquired Feb-13: Announces launch of EdTech (1)
8.4% NA Education
76%
after 2010 and all were digital-based / e- incubator, Pearson Catalyst
17%
7%
Learning businesses 34.0%
Jan-13: Announces plans to exit UK Int'l Education
From 2002-2012, Pearson has spent vocational market £4.6bn (2)
Professional
£3.4bn on education acquisitions 57.6% Education Penguin FT Group
Offer Acquisition / Target Transaction
Target Founded Company Overview Sector Deal Rationale
Date Investment HQ Value ($m)
Supports Pearson’s focus on social collaboration
Mar-13 Scoot & Doodle Investment US 2012 Operates a real time and social creativity platform Social Collaboration $2.5m
within the education market
Learning Student Response System Supports “flipped classrooms” and digital learning
Apr-13 Acquisition US 2011 Cloud-based learning analytics and assessment system Undisclosed (3)
Catalytics (Analytics & Assessment) analytics
IndiaCan Provides vocational education and training for Together with the TutorVista buyout, it confirms
Apr-13 Acquisition India 2008 Vocational Training $22.0m
Education educating and employing the youth in India Pearson's inorganic expansion plan within India
Provider of examination development software used in Pearson VUE publishes exams created through
Mar-13 Exam Design Acquisition US 2007 Testing (Assessment) Undisclosed
high-stakes testing ExamDeveloper
Supports Pearson's acquisition expansion plan within
Feb-13 TutorVista Acquisition India 2005 Online tutoring and test preparation provider Tutoring $25.7m
India
Embanet Provides technology-enabled services to traditional Online Learning Caters to fast-growing demand for online learning in
Oct-12 Acquisition US 1993 $650.0m
Compass non-profit postsecondary educational institutions (Higher Education) higher education
Global English Language Training Supports two major themes of Pearson: ELT and a
May-12 Acquisition US 1997 Business English software for global enterprises $90.0m
English (ELT) strong focus on emerging markets
Adaptive learning platform that customizes Pearson uses Knewton’s software to power its online
Oct-11 Knewton Investment US 2008 Adaptive Learning $33.0m
educational content based on student needs reading, writing and math courses
Source: Pearson 2012 annual report, company filings, press releases, TechCrunch
IBIS Capital | A European Perspective on e-Learning (1) Refers to North America 22
(2) Refers to 2012 total revenue
(3) Rumoured to be well above $10me-Learning: Active European Corporates
Reed Elsevier
Company Snapshot Financial Summary
Headquartered in London (UK), founded in 1844 and employs c. 30.4k personnel
Revenue by Format (%) 2012 Revenue by Geography (%)
throughout 70+ countries
100%
52%
19%
19%
Primary listing on the LSE with a market cap of c. $13.7bn (1)
3%
7%
15% 21%
15% 22%
14% 25%
27%
33%
Reed’s education business, Harcourt Education, was largely acquired in July 2001 as
37%
80%
51%
52%
part of its acquisition of Harcourt General. In July 2007, Reed sold its education North America RoE
14%
business for $5bn to Houghton Mifflin Company RoW UK
17%
60% Netherlands
15%
Reed wanted to focus on the growing digital opportunities in its Scientific & Medical,
12%
13%
Legal and Business divisions 40% 2012 Revenue by Segment (%)
64%
63%
61%
59%
50%
48%
Currently operates across 4 professional segments: (1) Scientific, Technical & Medical
37%
35%
20%
34%
26%
14%
15%
11%
(2) Risk Solutions & Business Information (3) Legal (4) Exhibitions
M&A is generally done through the operating group and investments are held through 0%
Reed Elsevier Ventures Scientific, Technical & Medical
Legal
Reed Elsevier Ventures key focus areas; Healthcare IT, large scale data / analytics, (2) Risk Solutions
media Digital F2F Print Exhibitions
Business Information
Recent e-Learning M&A and Fundraising Activity
Apr 2013 Mar 2013 Sep 2011
Elsevier, Reed Elsevier’s scientific, technical and medical information division, Reed Elsevier’s corporate venture arm, Reed Elsevier Reed Elsevier Ventures
acquired 100% of Mendeley from Access Industries, Ambient Sound, Ventures, lead a Series B investment of $10m in participated in a $1.4m seed
Andurance Ventures and Passion Capital Babbel.com round in Fingerprint Digital
Based in the UK, Mendeley is a cloud-based research management and social Other investors included IBB Beteiligungsgesellschaft, Other investors included K2
collaboration platform Kizoo Technology Capital, Nokia Growth Partners and VC Media, THQ and Suffolk Ventures
Fonds Technologie Berlin
Mendeley claims 2.3m users, over 340m documents and c. 206k research Fingerprint Digital creates mobile
groups Based in Germany, Babbel creates online and mobile-based learning apps for kids (3-8 years
language learning courses old) and grown ups (the childrens’
Deal rationale: (1) allows for research content to be collaborative and open (2)
parents)
expands researcher workflow offerings and builds greater engagement with its Babbel employs 18o personnel and claims c. 15m users and
users 8m downloads
Transaction value was rumoured to be between $69-100m (3)
Source: Reed Elsevier 2012 annual report, company filings, TechCrunch
IBIS Capital | A European Perspective on e-Learning (1) As at 12-Jun-13 23
(2) Refers to face-to-face
(3) As per TechCrunche-Learning: Active European Corporates
Holtzbrinck Publishing Group
Company Snapshot Holtzbrinck's Investment Vehicles
Headquartered in Stuttgart (Germany), founded in 1971 and employs c. 13.8 k employees Strong focus on
Location
Year
Focus
# of Portfolio
e-Learning Founded Companies
Georg von Holtzbrinck is a family-owned publishing group
Holtzbrinck Publishing Group operates through three global divisions: Stage: Late stage deals
NYC 2012 5
Sector: US HE
− Global Trade (Consumer books)
− Global Science & Education Stage: Venture deals
London 2012 Sector: Global consumer 8
− Holtzbrinck Digital Information & Services education with focus on EM
Takes advantage of e-Learning opportunities primarily through the following entities:
Macmillan New Ventures (MNV), Macmillan Digital Education and Macmillan
Education Munich 2000 Internet (B2B & B2C) 19
In Jan and Jul 2012, Macmillan launched MNV and Macmillan Digital Education,
respectively to both serve as corporate venture arms
Munich 2000 Internet (B2B & B2C) 55
− MNV is a $100m venture fund and is slated to add 10-15 companies to its
portfolio by 2015
Select Holtzbrinck e-Learning Investments & Acquisitions Relevant News
Jun-13: Macmillan Science & Education launches
Macmillan New Ventures Digital Education Macmillan Education
Chinese head office in Shanghai
Late Nite Produces virtual online simulations for Online video platform that aggregates and curates Online math learning
Labs science education
Veduca
publicly available educational content
bettermarks
system
May-13: Digital Science introduces Projects for
scientific researchers – a new technology tool to
Focused on adaptive assessment in HE Online educational marketplace that makes it easy organise their data
PrepU easyaula
and advanced placement courses (2) for people to learn anything from anyone
May-13: Macmillan Education teams up with Knewton
Empowers college educators to positively to bring adaptive learning beyond K-12 and HE
Tutoring service for individual tutoring at
EBI impact student retention, success, tutoria
students’ homes Mar-13: MNV acquires Late Nite Labs
learning and satisfaction
iClicker
Enables active learning and formative Maths Provides live one-to-one home tutoring via the Feb:13: Macmillan Education announces plans to
assessment in classrooms Doctor internet, plus worksheets and tutoring videos
expand within the UAE
Provides interactive homework and
Sapling
instruction materials covering HE and English Up
Cloud-based English learning platform for busy Feb-13: Macmillan Digital Education invests in
Learning (2) adults and young professionals
high school topics Brazilian startups, Veduca and Easyaula
Provides tools and learning algorithms for Nov-12: MNV acquires Sapling Learning
Cramlr
teachers in order to create effective online courses
Source: Company websites, TechCrunch
IBIS Capital | A European Perspective on e-Learning (1) 1971 refers to the year that Verlagsgruppe Georg von Holtzbrinck GmbH holding company was founded. In 1948, Georg von Holtzbrinck 24
launched Die Stuttgarter Hausbuecherei together with a small publishing liste-Learning: Active European Corporates
Bertelsmann
Company Snapshot Company Structure
Headquartered in Gutersloh (Germany), founded in 1835 and employs c. 104.3k Overview
personnel
Engages in the production, servicing, and marketing of media worldwide #1 European broadcaster
Core divisions encompass television, book publishing, magazine publishing and services
in more than 50 countries
World's largest book-publishing group
Berteslmann takes advantage of e-Learning opportunities primarily through the
following entities:
Europe's biggest magazine publisher
− Bertelsmann Digital Media Investments (BDMI): $63m corporate venture
fund launched in 2006 and based out of NYC
− Bertelsmann AG: Parent company Provides outsourcing services
− University Ventures: $100m fund launched in Jan 2012, of which
Bertelsmann committed $50m. The other major investor is the University of
Texas Investment Management Company. The fund is focused on global Produces magazines, catalogues, brochures, books and calendars
higher education and is based out of NYC
Select Bertelsmann e-Learning Investments Relevant News
Jan-13: Bertelsmann announces $4m investment in
BDMI (Current & Exited Portfolio
Companies)
Bertelsmann AG University Ventures WizIQ and merges authorSTREAM into WizIQ
Largest publisher of open Offers tools to help teachers Partners with non-profit, traditional colleges and Dec-12: University Ventures announces the launch of
Flatworld Synergis
college textbooks for WizIQ around the world run virtual universities to help expand their student base to UV Labs, a company that will partner with schools to
Knowledge Education
students worldwide classrooms include the “21st Century Student”
build new online learning products
High quality foreign Online platform for PowerPoint Network of online and on-campus schools devoted
Learnship author University Oct-12: BDMI announces investment in Learnship
language training via the users around the world to share to making postsecondary education affordable and
Interactive STREAM Now
Internet and collaborate on presentations accessible Interactive
(1) Provides e-books to a wide Ameritas Offers degree programs targeting Hispanic Oct-12: Pearson and Bertelsmann announce an
Ebrary
range of sectors College Americans agreement to create the world’s leading consumer
publishing organization by combining Penguin and
Works with postsecondary institutions to build
The Standardized test
products to solve issues of accessibility, Random House (Bertelsmann will own 53% and
Princeton preparation and admissions UV Labs
Review
(1)
consulting company
affordability, quality and accountability facing HE Pearson will own 47%)
May-12: University Ventures announces investment in
Leading higher education company in the EU
Xlibris
(1) Self publishing and print on-
EDEX (portfolio includes University of Nicosia,
Ameritas College
demand
Intercollege, Global Training)
Source: Company websites, press releases, TechCrunch
IBIS Capital | A European Perspective on e-Learning (1) Refers to exited portfolio companies 25e-Learning: Active European Corporates
Sanoma
Company Snapshot Financial Summary
Headquartered in Helsinki (Finland), founded in 1999 and employs c. 13.7k personnel 2012 Revenue by Segment (%) 2012 Revenue by Geography (%)
Primary listing on the Helsinki Stock Exchange with a market cap of c. $1.3bn (1)
13% 6%
Sanoma reports through 3 primary business units: Media, News and Learning (2) Media
74%
11%
11%
4%
18% €312m
Sanoma Learning, Sanoma’s education business, employs c. 1.8k personnel and 2012
News
Learning
generated €312.4m of revenue in 2012 Revenue Learning
Holland & Finland Belgium
Sanoma Learning operates in 6 European countries through 7 companies: Van In, 63% Other Other EU RoW
Sanoma Pro, NTK-Perfekt, Malmberg, Young Digital Planet (YDP), Nowa Era, and
Sanoma Utbildning
Key e-Learning Developments in 2012 Revenue by Format (%)
In Jun 2012, Malmberg acquired Bureau ICE, a testing and examinations company 2012
In May 2010, Sanoma Learning acquired the remaining 50% of YDP. Sanoma originally Centralised learning platform development
30%
53%
13%
4%
acquired a stake in YDP in 1999 and increased its ownership in 2004 Piloting online tutoring
Sanoma Pro, Malmberg and Nowa Era accounted for c. 80% of Sanoma Learning’s total Mobile learning content and tools introduced
revenue in 2012 Digital learning methods grew double-digit Print Hybrid Pure Digital Services
Overview of Sanoma’s Education Businesses Relevant News
23-Apr-13: Malmberg announces launch of new Arithmetic
Revenue # of
Year of 3.5m Test app
Company Overview Group HQ students are learning
(€m) (3) Employees from Nowa Era’s textbooks
Inclusion 22-Apr-13: Sanoma Pro Online is renamed to Fokus and
Provider of learning and
94% announces a new focus on team leading and supervising
Sanoma Pro competence development 90m 211 1999 Finland
of Hungarian
solutions schools are using
16-Apr-13: Sanoma Pro introduces a new e-bookshelf
NTK methods service containing professionals books focused on the
Malmberg Educational publisher 90m 321 2004 Holland
corporate market
Nowa Era Educational publisher 70m 290 1999 Poland
35k
# of users of Sanoma Pro Teachers’ 12-Apr-13: NTK announces development of interactive e-
Primary and secondary textbook Online Service
VAN IN 30m 122 2004 Belgium book player
publisher
Sanoma One of Sweden’s leading
50% 11-Apr-13: Sanoma Pro announces introduction of digital
25m 65 2011 Sweden of all pupils in primary
Utbildning educational publishers schools use a textbook in English from textbooks for upper secondary schools
Sanoma Utbildning
NTK-Perfekt Textbook publisher 20m 213 2006 Hungary 22-Jan-13: Young Digital Planet announces launch of
Young Digital Educational and language
95% Nicole and Tommy, a course for children offered in 5
15m 290 1999 Poland of Finnish schools use languages
Planet digital publisher Sanoma Pro’s digital services
Source: Annual reports, press releases, company website, Capital IQ
IBIS Capital | A European Perspective on e-Learning (1) As at 12-Jun-13 26
(2) Excludes “other and eliminations”, which represented 6% of 2012 revenue
(3) Refers to approximate revenue figures as per Sanoma Learning’s capital market day presentation dated 14-Jun-13e-Learning: Active European Corporates
Grupo Planeta & Lagardère
Company Snapshot Company Snapshot
Headquartered in Barcleona (Spain) and founded in 1949 Headquartered in Paris (France), restructured and renamed to Lagardère SCA in 1996
and employs c. 22.5k personnel
Grupo Planeta is a leading family-owned Spanish publishing and communication group
that offers a broad range of services Primary listing on the Paris Euronext with a market cap of c. $3.5bn (1)
Areas of activity include publishing, major works, bookstores and reading clubs, Lagardère is a global media group that operates in c. 30 countries through four business
collectibles, media, cinema and audio-visual production, training and professional and units: Lagardère Publishing (Book and e-Publishing), Lagardère Active, Lagardère
internet Services and Lagardère Unlimited
Grupo Planeta offers a wide range of specialist educational & training courses from Education operates within the Lagardère Publishing business, which generated €2.0bn
language learning to university studies and MBAs of sales (28% of total group revenue) in 2012, of which education represented 18%
The company’s educational & training courses are focused on the needs of the Spanish Lagardère is the world’s 2nd ranking publisher and the #1 book distributer in France
labour market in addition to incorporating new forms of distribution models via
e-Books contribution to 2012 publishing revenue: Lagardère Publishing (8%), US
technology (e.g. – e-Learning, virtual campuses, video)
Publishing (23%), UK Publishing (23%), France Publishing (2%)
Overview of Training & Professional Businesses Financial Summary & Overview of Education Brands
Company Overview Digital? Lagardère’s Select Education Brands 2012 Publishing Revenue by
Aula Planeta
Online educational tool that enriches classrooms with audio-
✓ Company Overview Market
Activity (%)
visual and interactive tools and contents
Hachette Publishes works for classroom and
General
CEAC Study centres in vocational training courses ✓ Education home use
France 15% 4% Literature
Deusto Formacion Training for technicians and middle managers ✓ Leading educational publishers in Other
Hatier France offering 2,500 different France 18%
Deusto Salud Specialist training for positions in the healthcare jobs market ✓ book titles €374m
2012 Education
Armand Leading HE publisher in the fields Education
Undergraduate and graduate business school with two Spanish France 40%
EAE Business School
campuses and international campuses Collin of human and social sciences Revenue
Illustrated
Publishes books and teaching tools
English Today Online English learning platform ✓ Hatier tailored to the needs of teachers in
France
23% Books
International Africa and French overseas
Reference
Home English Personalised language teaching ✓ territories
Publishes for schools, vocational,
Hodder
Laudeo Oposiciones Training programme for public sector entrance examinations Education
higher education and self-learning
markets
UK-AUS-NZ
2012 Publishing Revenue by
Online Business Geography (%)
School
First Spanish-language online business school ✓ Dynamic
Learning
Online teaching and learning
resource s
UK-AUS-NZ
Planeta Formacion Philip Allan Publishes a wide range of
Corpotiva
Corporate training provider ✓ Updates educational resources
UK-AUS-NZ
20%
33%
23%
17%
8%
Revistas Harvard Anaya Textbook publisher Spain-LatAm
Deusto
Reference journals for the business world ✓
Hachette Arab Speaking
Textbook publisher
Provides teaching projects to accompany parents during the Antoine Countries
Superpadres
process of educating their children
✓ France RoW US UK Spain
Source: Annual reports, press releases, company website, Capital IQ
IBIS Capital | A European Perspective on e-Learning (1) As at 12-Jun-13 27IBIS Capital | A European Perspective on e-Learning
The European
Education Market
IBIS Capital | A European Perspective on e-LearningDistribution of Companies
Breakdown of European e-Learning Companies by Country in 2012
Key Points
1,000
Kompass International found c.3,000
750 671 European companies in the e-Learning
532 sector
500
378
303 Poland’s government is investing
250
127
heavily with the aid of EU structural
109 98 92 92 88 84 76 104
64 54 funds into e-Learning and learning
technologies for education
Spain
France
Germany
Other
Poland
Italy
Belgium
Denmark
Norway
Romania
Finland
Sweden
Czech Republic
Slovakia
UK
The UK market has approximately 260
e-Learning software development
companies, more than double France
(2.5x), the next largest market in
Breakdown of European e-Learning Companies by Sector in 2012
Europe
1,000 908
862 In France, 1% of any company’s salary
bill must be spent on training and
750 development or it is levied as a tax on
employers partially explaining the large
500 430 amount of corporate training
321 350 companies in France
250
Despite being the largest market in
8 Europe, the number of UK e-Learning
software development companies have
Software for Software Consultants Training courses Language Web-based
education and courses training fallen by 11% p.a. for the last 2 years, in
training part due to consolidation within the
industry
Source: Kompass International
IBIS Capital | A European Perspective on e-Learning Note: The figures represent the companies who have registered with Kompass International, and should not be taken as a true 29
reflection of market size and activity. Nevertheless it is a good indication of activity within markets in the absence of other comparable data setsLearning Populations Across Europe
Projected 2015 Student Population Across Different Age Groups
Key Points
5-14 15-20 20-29
(m)
20.0 17.9 The total enrolled student population
13.9 13.1 in Europe is approximately 111m as
12.1 compared to US with approximately
10.0
9.4 77m enrolled students. European
7.5 6.9
governments (EU 27) spent
3.5 approximately Euro 674bn in 2011,
2.3 2.0 2.0 1.9 1.8 1.7 1.5 1.4
1.2 1.1 1.1 1.0 0.9 0.4 equivalent to approximately 5.3% of
0.2 0.1
0.0 GDP. Denmark and Iceland allocating
Denmark
Ireland
Iceland
Spain
Germany
France
Italy
Poland
Belgium
Austria
Turkey
Netherlands
Hungary
Slovenia
Portugal
Finland
Estonia
Norway
UK
Greece
Sweden
Switzerland
Czech Republic
Slovak Republic
the largest share of GDP (7.8%).
The working population in Europe is
also significantly larger than that of the
US, with approximately 239m workers
2012 Employed Working Population for Persons in between 20-64 Years Old in Europe as compared to 155m in the
US
The key markets can be seen by the
38.4
(m)
40.0 population sizes, however students and
workforce numbers do not directly
27.7
25.2
correlate
23.3
22.3
16.7
15.3
20.0 European market has a significant
addressable market for e-Learning
8.8
7.7
with an already sizeable commitment
4.8
4.4
4.5
4.2
3.9
3.9
4.1
3.6
2.9
2.4
2.5
2.3
2.3
1.8
to education
0.9
0.9
1.3
0.6
1.2
0.4
0.2
0.2
0.2
0.0
Switzerland
Malta
France
Germany
Italy
Norway
Ireland
Latvia
Iceland
Spain
Poland
Belgium
Austria
Bulgaria
Turkey
Slovenia
Hungary
Romania
Portugal
Finland
Croatia
Netherlands
UK
Czech Republic
Sweden
Greece
Denmark
Estonia
Cyprus
Luxembourg
Slovakia
Lithuania
Source: OECD, Eurostat
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