Sector

PUBLIC VALUATIONS: GLOBAL EDUCATION, WORKFORCE, FINTECH

We track a defined set of public valuations for education, workforce an related fintech companies. Our focus is on companies operating within or across major emerging and global markets, exclude more parochial US and EU competitors.

By sector composition, Education includes pre-K to lifelong learning in all modalities, from physical school chains to online learning tools. Workforce is broadly defined to include productivity tools, job search and payments platforms, all of which facilitate work, employment and business formation around the world. 

In aggregate the global market penetration and scale within the Workforce sector is significantly larger than Education sector counterparts, the latter having traditionally tended to focus on capturing local market rather than cross-border demand (a few exceptions today would include international K12 and language learning).   A raft of upcoming IPOs for EdTech unicorns (Udemy, Duolingo, etc) promises to re-invigorate US-based education companies operating globally, but these are not currently included.

On a technical level, EV/EBITDA multiples are calculated on a past (TTM) basis.  We think this provides a useful snapshot of valuation based on forward earnings expectations, and we measure this against the size of market capitalization in Figures 1 and 2.

Figure 1: Global Workforce and Related Fintech

Figure 2: Global Education

Metrics 

  • Constituents: 45 Education companies, 24 Workforce/Fintech companies.
  • Total Enterprise Value (as of December 1, 2020) for represented companies is approximately $144.9 billion for Education and $884 billion for Workforce.  Note that Workforce sizing is skewed by the massive enterprise value at companies such as Shopify, Zoom, Atlassian and fintech groups Square and Adyen.
  • Median Market Cap (US$) is $19.5 billion (Workforce) and $689 million (Education)
  • Median sector EV/EBITDA is calculated at 25x (Workforce) and 14x (Education)

M&A COMPS: CROSS-BORDER 4Q2020

Cross-border M&A activity is accelerating across a range of workforce and education segments, from education and training to career navigation, job search, workforce alignment, AI matching and productivity.

Our targeted database of of 4Q2020 indicates there were over 20 cross-border acquisitions between between December 2019 and October 2020 and most of that occurring through the Covid-19 pandemic. Comparative historical data for the past few years suggests that current trends are set to accelerate beyond what we’ve seen in the past, perhaps (again) not surprising in the face of such unprecedented disruption and opportunity across global labor markets.

Geographically, key investors were based in the US, China, and parts of Europe with Europe and North America being the deepest target regions for consolidation and new investment. You can expect that as the pandemic abates, there will be more outbound investment trends from the US and EU, particularly within labor-intensive Asia.

A few figures follow with geographic and related data.

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