IBIS Capital - A European Perspective On E-Learning PDF

IBIS Capital | e-Learning
A European
Perspective on e-
Learning
IBIS Capital | A European Perspective on e-Learning

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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

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

The European e-
Learning Market

The 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 Capitals 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
The 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

Global 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 $207bn
1,000
Latin
668
558
America Similar to other regions, K-12
8%
500 represents the largest segment
319 Middle nominally within the European
126 East &
Africa education sector
0 3%
North
Middle Latin Emerging Developed Europe North America From a global perspective, Europes
East & America Asia-PacificAsia-Pacific America 33%
Africa contribution is largest within the Pre-
K-12 segment
2011A Global Corporate Learning Expenditure by Geography
($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 8
Growing 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
Government 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

Investment 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 Insights report titled The 2012 Boom in Learning Technology Investment . The scope 11
of the data includes angel, venture capital, and private equity investments
The 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 Insights 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 education
Significant 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 exhaustive
Global 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 its
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 Europe
US M&A and Investment More Active than Europe
e-Learnings 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 Panama
Recent 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 16
Global 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 targets headquarters were in Europe 17
(2) Refers to not relevant as there is no data
2013: 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 Livemochas cloud platform
Entry into US market

100k users within a month of
Develops language learning mobile software Applies PlaySays 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 Edmodos 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-Hills 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 Web
Venture 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 USD
European 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 investors
Active European
e-Learning
Corporates

e-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 Pearsons 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 Pearsons 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 Knewtons 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 $10m
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%
Reeds 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 Elseviers scientific, technical and medical information division, Reed Elseviers 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 TechCrunch
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 list
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 worlds 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 25
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, Sanomas 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 Learnings total Mobile learning content and tools introduced
revenue in 2012 Digital learning methods grew double-digit Print Hybrid Pure Digital Services
Overview of Sanomas 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 Eras 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 Swedens 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 Pros digital services
Source: Annual reports, press releases, company website, Capital IQ

(2) Excludes other and eliminations, which represented 6% of 2012 revenue
(3) Refers to approximate revenue figures as per Sanoma Learnings capital market day presentation dated 14-Jun-13
Grupo Planeta & Lagardre
Company Snapshot Company Snapshot
Headquartered in Barcleona (Spain) and founded in 1949 Headquartered in Paris (France), restructured and renamed to Lagardre 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, Lagardre 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: Lagardre Publishing (Book and e-Publishing), Lagardre Active, Lagardre
internet Services and Lagardre Unlimited
Grupo Planeta offers a wide range of specialist educational & training courses from Education operates within the Lagardre 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 companys educational & training courses are focused on the needs of the Spanish Lagardre is the worlds 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: Lagardre 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? Lagardres 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

The European
Education Market

Distribution 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 Polands 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 companys 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 sets
Learning 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

The European e-Learning Landscape
P = Pupils
T = Teachers
S = Schools European e-Learning
The numbers within
countries indicate the P: 7m 2012 total expenditure $7.6bn
number of e-Learning
companies in that T: 265k
country
S: 27k Academic
64
2011 total expenditure $966bn

92
127 111m
Number of pupils
P: 44m 92
Number of teachers 4.6m
T: 1.3m P: 13m
Number of schools 417,144
S: 159k 532 303
T: 331k
88 378 S: 65k
109 Corporate
54
671 76 2011 total expenditure $71bn
Working population 239m

P: 47m
98
88
T: 2.7m
S: 166k
Source: McKinsey, OECD, Eurostat, Eurypedia, National Statistic Offices, Ministry of Educations, 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 31
reflection of market size and activity. Nevertheless it is a good indication of activity within markets in the absence of other comparable data sets
Population Growth Rates & Internet Penetration
Student Population 2010A-2020P CAGRs

5-14 15-20 20-29
Key Points
3.0%
2.2%
1.9%
2.0% 1.5%
1.3%
1.2% 1.2%
0.6% 0.7% 0.8%
1.1%
0.4%
OECD projects that the overall student
1.0% 0.6% 0.4% 0.3% 0.5% 0.5%
0.3% 0.3%
0.1%
0.1%
0.1%
0.3% 0.2% 0.2% 0.1% population will fall to 104m in 2020,
0.0% driven mostly by the declining growth
(1.0%) rate of students between 15-29
(2.0%)
Overall population birth rates are
(3.0%) leading indicators to growth in the
(4.0%) lower age range.
France
Iceland
Ireland
Italy
Austria
Belgium
Spain
Germany
Greece
Hungary
Poland
Slovenia
Turkey
Finland
Portugal
Denmark
Luxembourg
Netherlands
Czech Republic
Estonia
Norway
Sweden
UK
Slovak Republic
Switzerland
Countries such as Germany are
expected to see the biggest falls in
student populations
Population and Internet Penetration by Region Internet penetration is highest in

Western Europe and the Nordic
Population 2012E (m) Penetration (% Population) countries whilst Southern Europe and
Central & Eastern Europe is less
97%
97%
93%
93%
90%
91%
89%
penetrated
85%
84%
83%
82%
80%
81%
150
79%
78%
77%
73%
72%
72%
71%
69%
67%
65%
65%
65%
58%
58%
55%
66 80%
53%
51%
100
80
44%
81
46%
63
61
47
38
50
22
17
10
10
10
11
11
9
8
8
7
6
5
5
4
5
5
4
2
2
0
0
0
1
1
1
0
Czech
Sweden
Italy
Ireland
Malta
Iceland
Germany
Spain
Belgium
Austria
France
Turkey
Poland
Latvia
Finland
Slovenia
Hungary
Romania
Netherlands
Portugal
Denmark
Croatia
Norway
Estonia
Liechtenstein
UK
Greece
Switzerland
Bulgaria
Slovakia
Lithuania
Cyprus
Luxembourg
Source: OECD, Internet World Statistics

European ICT Infrastructure in Schools
Summary of Infrastructure Penetration in Schools Across Europe by number of

computers, number of connect computers and % of schools that have broadband Key Points
Computer and broadband penetration
Computers per 100 students Computers connected to the internet per 100 students % schools with broadband
to schools across Europe has increased
92% 95% 96% 94% significantly over last 5 years
40 100%
75% 75% 33
71% 31
30 65% 75% The principal use of ICT by teacher is
24 23
20 19 in preparing lessons (mean use of over
20 16 15 16
14
50% 95% across the all grades and
13 12
10 11 10 countries)
8
10 25%
Computers in schools has increased
0 0%
however this still remains the largest
2006 2011-12 2006 2011-12 2006 2011-12 2006 2011-12
inhibitor to ICT use
Grade 4 Grade 8 Grade 11 General Grade 11 Vocational
Lack of content in the national
language remains an issue
Summary of Uses and Inhibitions of Use of ICT in Education Across Europe
(% of Teachers)
Grade 4 Grade 8 Grade 11 General Grade 11 Vocational
2006
88% 96% 86% 91% 96%
81%
91% 95% 84%
93% 97% 87%
75% 2011-12 71% 73% 77%
44% 49% 50%

34% 29% 35% 32%
Uses
32%
Used ICT for Used ICT in class Used ICT in >25% Used ICT for Used ICT in class Used ICT in >25% Used ICT for Used ICT in class Used ICT in >25% Used ICT for Used ICT in class Used ICT in >25%
preparing last year of lessons last year preparing last year of lessons last year preparing last year of lessons last year preparing last year of lessons last year
lessons last year lessons last year lessons last year lessons last year
51% 49% 47%

46%
Inhibitors
33%
26% 27%
23% 23% 20% 21% 22%
21% 18% 18% 19%
11% 11% 14% 11%
10% 10% 9% 10% 9% 7% 7% 7% 10% 8% 7%
8%
Insufficient Lack of Lack of Lack of Insufficient Lack of Lack of Lack of Insufficient Lack of Lack of Lack of Insufficient Lack of Lack of Lack of
computers teacher content content in computers teacher content content in computers teacher content content in computers teacher content content in
skills national skills national skills national skills national
language language language language
Source: Survey of Schools: ICT in Education

Digitally Equipped Schools
Percentages of Students by School Type in Terms of Equipment

Type 1 Type 2 Type 3 (see key points for definition)
Legend
Grade 4 (9.5 average age) Grade 8 (13.5 average age)
Norway Finland
Sweden Sweden Type 1: Highly digitally equipped
Finland Denmark
Denmark
Spain
Norway schools, characterised by relatively high
France
Malta
Portugal
Malta
Portugal
equipment levels, fast broadband and
Estonia
Ireland
Latvia
Spain
relatively high connectedness
Luxembourg
Latvia
Estonia
EU
Type 2: Partially digitally equipped
Cyprus
France
Austria
Ireland
schools, with lower than type 1
Belgium
EU
Belgium
Lithuania
equipment levels, slow (less than
Czech_Rep
Austria
Lithuania
Croatia
Bulgaria 10mbps) or no broadband, and some
Czech_Rep
Slovenia
Croatia Cyprus connectedness
Greece
Hungary
Greece Poland Type 3: As type 2 but with no
Slovenia
Bulgaria
Slovakia Hungary connectedness
Romania Slovakia
Italy Romania
Turkey Italy
Poland Turkey
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Key Points
Grade 11 General (13.5 average age) Grade 11 Vocational (13.5 average age)
Sweden Sweden
Norway
Denmark
Norway
Denmark The Nordic region represent the most
Finland
Slovenia
Finland
Estonia digitally enabled region within Europe
Croatia Croatia
France
France
Latvia
Estonia
Austria
Austria
Slovenia Surprisingly Grade 8, around age 14, is
Czech_Rep
Portugal
Spain
Bulgaria the demographic most badly served in
Lithuania
EU
Spain Portugal the schools digital environment
Belgium EU
Bulgaria Latvia
Malta Belgium
Lithuania Czech_Rep
Slovakia
Greece
Hungary
Cyprus
Cyprus
Ireland Hungary
Italy Slovakia
Poland Turkey
Greece Italy
Turkey Romania
Romania Poland
0% 25% 50% 75% 100% 0% 25% 50% 75% 100%
Source: Survey of Schools: ICT in Education

IBIS Capital | A European Perspective on e-Learning Note: Criteria looked used to evaluate extent of digitally equipped school: 34
Equipment provision: numbers of desktop, laptop computers, e-readers, mobile phones, interactive whiteboards, digital cameras and data projectors;
The proportion of fully operational equipment; Broadband speed and type of broadband access; Maintenance and support; Indicators of
The European
Corporate Learning
Market

e-Learning Penetration Increasing in European Corporates
% of Employees Using e-Learning % of Employees Using e-Learning

Across European Countries Across All Firm Sizes Key Points
Market acceptance of e-Learning has

Country < 10% 10-50% > 50% Firm Size by < 10% 10-50% > 50% resulted in increasing use for both large
Employees
60% 51% 60% and small companies
43% 39% 40% 43%
30% 34%
UK 40% 29% < 1,000 40% 26% 27% 25%
20% 20% UK and Spain are leading the adoption
5%
0% 0%
of e-Learning in Europe
2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012
Companies are increasing their use of

60% 60% 51%
33% 35% 38%

44%
39%
34% 35%
e-Learning regardless of their size
Spain 40% 29% 1,000-5,000 40% 25%
19%
20% 20% 12%
0% 0%
2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012
60% 60%
40% 38% 42% 41%
35%
41%
40% 32% 40% 30% 31%
Benelux > 10,000
19% 19%
20% 20% 12%
0% 0%
2010 2012 2010 2012 2010 2012 2010 2012 2010 2012 2010 2012
60% 44%
51% % Budget Spent on e-Learning
36%
France 40% 25%
18% 17%
20% 4%
8% < 5%
0%
2010 2012 2010 2012 2010 2012 7% 5-9%
44% 10-19%
53%
60%
43% 12%
40%
20-29%
Italy 26% 26% 26%
15% > 30%
20%
0% 25% n/a
2010 2012 2010 2012 2010 2012
Source: Ipsos, CrossKnowledge, Fefaur

Corporate Training in the UK
Total UK Training Expenditure 2011

Key Points
Training spend per learner 838 The UK Commissions Employer Skills

Survey 2011: UK Results, was the first
report that accurately calculated the
Indirect Contribution and Proportion of Direct Costs by Country amount of spend applied to corporate
Direct
costs
50%
49bn 50% Total expenditure (bn) Direct costs (%)
training
100% 85%
Included in their number is the
59% 56% 51% foregone cost of employees salaries and
50% wages whilst on training, otherwise
50% 9%
3% 3% known as indirect costs, which account
0% for c.50% of the total amount spent
England Northern Ireland Scotland Wales
Total Expenditure and Number of Skill-Shortage Vacancies in the UK by Sector 2011 Business services sector suffers from
Total expenditure (bn) Direct costs (%) 9.5 the largest shortage in skills in the UK
10.0 100%
after the wholesale and retail sector
6.7
5.4 5.4
5.0 3.5 3.4 3.5 3.5 50%
2.8 2.5
1.5
0.9 0.3
0.1
0.0 0%
30 Number of skill-shortage vacancies Proportion 26.9 50%

Thousands
15 11.8 10.2 25%

9.5 8.8 9.1
5.4 6.7
2.6 4.3 3.2 3.7
0.7 0.5
0 0%
Other activities
Agriculture
restaurants
Gas, Water
Business
Education
Mining and
Wholesale and
social work
Construction
Transport and
administration
Manufacturing
communicatio
Financial
Health and
Electricity,
Hotels and
services
Quarrying
services
Public
retail
ns
Source: UK Commission's Employer Skills Survey 2011: UK Results, Bersin & Associates
Corporate Training in the UK
Learning Technology Spend (% Budget) L&D Spending per Learner by Firm Size
Key Points
15%
2009 2012 955 Spend per learner in the US was $706
838 per learner, according to Bersin &
693 685
Associates, almost half of that in the
8% UK (838 = c.$1,300)
7% 7% 7%
6%
5% Of the large companies in the UK, two-
3% thirds are reporting reductions in
training budgets in 2012
Large Midsize Small Total UK Large Midsize Small Total UK UK large businesses employ 8.1 L&D
staff for every 1,000 learners, on
averagemore than twice the number
Training Delivery Methods in UK Training Delivery Methods 2012 of their US counterparts
2009 vs. 2012 UK vs. US
Instructor-led 77% 2009 53% UK Compared to 2009, twice as many UK

classroom 53% 2012 48% US firms now use learning management
systems (LMSs) and learning content
10% 15%
e-Learning
15% 22%
management systems (LCMSs), and
three times as many use rapid e-
14% learning tools
Experiential
14% 10%
10% US is using significantly more e-

Collaborative
10% 6% Learning solutions than the UK for the
provision of training
Virtual instructor- 4% 6%
led classroom 6% 12%
9% 1%
Other
1% 1%
0% 50% 100% 0% 20% 40% 60%
Source: CrossKnowledge, Ipsos, Fefaur, Bersin & Associates

General European
Investment
Trends

European Investment in 2012 (All Sectors)
Investments by Stage and Region (bn) Investments by Stage

bn Rescue Capital Replacement Capital Growth Capital Venture Capital Buyout Key Points
3.0
8.0
10.2
0.4
The buyout market dominates
2.0 0.4 0.1 8.6 Buyout Start-up investment by value whilst venture
77% 5%
0.1 0.1
0.0 capital represents the largest number
1.1
0.8 0.8
3.6 4.8 Later-stage of deals
1.0 Seed 3%
0.1 0.0 0.0
0.1 0.4 1.0 0%
0.4 0.0 Growth Although UK & Ireland attracts more
0.2 0.0 10%
0.0 0.8 0.8 0.8 0.2 0.5 0.1 investment capital than other areas of
Rescue Europe, France & Benelux attracts
10.0 8.1
6.9 1%
5.6 more venture and growth capital
3.9 Replacement
5.0 2.8
0.7 3%
A small proportion of capital (4% by
0.0
UK & France & DACH Southern Nordics CEE amount and 3% by number of
Ireland Benelux Europe companies) is applied to rescue or
Investments by Stage and Region (# of Companies) Investments by Stage replacement investments, which is
consistent throughout economic cycles
Number of companies
1,500 1,546
11 Earlier stage investment by number of
21
companies is most active in Germany,
1,287 410 Austria and Switzerland (DACH). UK
1,000 29 Later-stage
37 887 Growth and Ireland are relatively inactive,
7 17% 21%
740 325
74
12
lying behind France & Benelux, DACH
500 11 15 Rescue and the Nordics
109 414
1%
8 24 224
71 1 9 Replacement
58
0 432 577 965 220 671 123 Seed 2%
7%
400 319 Buyout
Start-up 17%
173 139 35%
200 91 123
33
0
UK & France & DACH Southern Nordics CEE
Ireland Benelux Europe
Sources: EVCA, PEREP_Analytics
IBIS Capital | A European Perspective on e-Learning Notes: 40
(1) Country region breakdowns are as follows: DACH (Austria, Germany, Switzerland), Nordics (Denmark, Finland, Norway, Sweden), Southern Europe
(Greece, Italy, Portugal, Spain), CEE (Central Eastern Europe)
Geographic Investment Dynamic in Europe
Non-European private equity

firms investing in portfolio Key Points
companies in Europe
The majority of institutional capital is

invested within domestic markets in
Europe with cross-border activity
accounting for 23% and rest-of-world
funds accounting for 2% of the
investment pool
Currently, there is a net outflow of

0.8bn private equity and venture capital from
Europe
Cross-border
investments Equivalent geographic venture capital
1.2bn within Europe investment flows are as follows:
210m
8.3bn 369m
2,365m
610m
European
private equity
firms investing
in portfolio 27.4bn
companies
outside Europe
Domestic
investments in
European Countries

(1) Europe includes: Austria, Baltic countries (Estonia, Latvia, Lithuania), Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany,
Greece, Hungary, Ireland, Italy, Luxembourg, Netherlands, Norway, Other CEE (Bosnia-Herzegovina, Croatia, Macedonia, Montenegro, Serbia,
Slovenia, Slovakia), Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, United Kingdom
Venture Capital Investment Decreasing in Europe
Comparison of Venture Capital vs. Growth Capital Applied in 2012 and as an Average
Key Points
0.100% A positive percentage indicates more venture capital applied 2012 2007-2011 Average
0.050%
Last year showed a trend towards
0.000%
growth capital versus venture capital
(0.050%) except for in Hungary, Sweden,
Denmark, Ireland, Switzerland and
(0.100%)
Austria (as per top chart)
Most countries venture capital and

growth capital investments as a % of
Venture Capital Investments as a % of GDP by Country GDP are below the 2007-2011 average
0.100%
0.065%
0.054%
0.054%
2012 2007-2011 Average

Last year, Hungary received over 2x its
0.041%
0.038%
0.033%
0.032%
0.075%
0.029%
0.029%
0.027%
0.025%
2007-2011 average investment

0.024%
0.023%
0.021%
0.021%
0.010%
0.011%
0.011%
0.005%
0.050%
0.003%
0.002%
0.002%
0.002%
0.000%
0.000%
0.001%
0.025% In general, little capital has been
applied to Central & Eastern European
0.000%
Growth Capital Investments as a % of GDP by Country

0.300% 2012 2007-2011 Average
0.200%
0.060%
0.053%
0.045%
0.051%
0.039%
0.038%
0.036%
0.041%
0.033%
0.027%
0.027%
0.024%
0.020%
0.020%
0.021%
0.019%
0.008%
0.008%
0.009%
0.012%
0.012%
0.005%
0.003%
0.003%
0.000%
0.000%
0.100%
0.000%

The Trend in European Investment Across all Stages
Investment by Stage from 2007 to 2012 (bn)

bn Rescue Capital Replacement Capital Growth Capital Venture Capital Buyout Key Points
8.0
6.7
6.0 6.3 6.3 Investment in Europe is on the decline
6.0 5.1 5.2 3.8 across all stages of investment
4.3
3.8 3.6 3.7
4.0 3.2 Venture capital investments have been
1.9 2.0 1.8 falling at a faster rate than growth
1.6
2.0 1.0 1.1
0.5 0.7 0.5 0.5 0.4
capital investments as people shift
0.3
their attention to less risky
0.0
57.2 opportunities
60
38.4 34.5
29.7 28 Whilst venture capital is in its decline,
30 12.7 nearly 3,000 companies were invested
0 in last year
2007 2008 2009 2010 2011 2012
Investment by Stage from 2007 to 2012 (Number of Companies) The shift to growth capital can be
clearly seen in the investments in
Number of companies growth companies increasing despite
3,836
4000 3,441 the decline in the amount of capital
3,246 3,094 3,010 2,988 applied
3000
2000
994 932 1,047
1000 775
593 174
348 52 140
68 150 176 132 135 103 76 67 118
0
4000
2000 1,299 1,161

615 783 881 878
0
2007 2008 2009 2010 2011 2012

Success Rates & Exit Times: Europe vs. US
Probability of Exit from First Round of VC Probability of Exit within 5 Years Key Points
Financing
Unsurprisingly, across the US and
Exit Assumptions &
IPO Probability M&A Probability IPO M&A
Vintage Years (1) Europe, the probability of exit via an
IPO has declined
Within 10 years: 1.7% 12.5%
1995-1999 12.5% 12.2% 40.0% 32.2%

Europe 2.9% Europe 17.1% The probability of exit via M&A and the
2000-2003 3.1% 4.4% 35.5% 27.8%
3.5% 14.4% average time to M&A have not changed
Within 5 years: significantly over time
2000-2003 1.4% 2.9% 20.9% 17.1% 1.2% 18.3%
2004-2007 1.2% 1.7% 18.3% 12.5% US 1.4% US 20.9%
Contrary to the publics perception,
Within 2 years: 6.9% 26.3%
there is no significant difference in the
success rates of European and US exits
2004-2007 0.1% 1.1% 5.0% 3.5%
via IPOs from the same vintage year
2008-2011 0.2% 0.5% 6.1% 2.2% 04'-07' Vintages 00'-03' Vintages 95'-99' Vintages
Time to Exit Time to Exit within 5 Years With regards to success rates of
(months) European and US exits via M&A,
Exit Assumptions IPO Time to M&A Time to IPO M&A
Europe is at a disadvantage
& Vintage Years Exit (Months) Exit (Months)
Within 10 years: 22 33
1995-1999 32 30 45 65 Europe 36 Europe 35
2000-2003 62 51 52 50 21 36
Within 5 years:
1995-1999 25 21 30 36 43 36
2000-2003 47 36 33 35 US 47 US 33
2004-2007 43 22 36 33 25 30
Within 2 years:
2004-2007 9 14 17 16 04'-07' Vintages 00'-03' Vintages 95'-99' Vintages
2008-2011 10 18 17 17
Source: BVCA European Venture Capital: Myths and Facts

IBIS Capital | A European Perspective on e-Learning (1) A vintage year is defined as the year of the first investment 44
The European
EdTech 20

European EdTech Top 20
The Fastest Growing & Most Innovative Companies in Europe
20 Companies from 9 countries across Europe growing between 13% - 934% last year
Companies Description
1 ALISON Accredited online skill-based courses
2 Brightwave End-to-end corporate training
3 Classroom Monitor Assessment/Analytics for K-12 market
4 Coursio Content portal
5 Dnevnick Educational social network
6 EPIC Learning End-to-end corporate training
7 FindCourses Corporate learning course procurement
8 GCSEPod Test & prep mobile platform
9 InfoMentor VLE for primary market
10 ITycom End-to-end corporate training
11 Labster Immersive learning in virtual labs
12 Languagelab Immersive learning for corporates
13 Languagenut Language learning targeting K-8
14 Mangahigh Online platform for K-12 maths education
15 Mendeley Open ecosystem for academic research
16 Serious Games Interactive Serious gaming for corporates
17 Siveco End-to-end academic/corporate learning
18 Sofatutor Online private tutoring
19 Twig World Digital learning resources for 7-16 year olds
20 Virtual College Accredited online vocational courses
Top 1-3 Top 4-6 Top 7-20
Sources: European EdTech Top 20, Company information

Appendix

A Closer Look at
the European
Education Market

School Models, Average Size & the Distribution Private School
Main Models of Primary and Lower Secondary Education in Europe in 2010/2011

Key Points
Single Structure (ISCED1 + ISCED2)
Continuous education from beginning to the end In almost half of all European
of compulsory schooling with no transition countries, students follow the same
between primary and lower secondary education common core curriculum during lower
secondary education after primary
Common core Curriculum (ISCED2) education, i.e. up to 15 or 16 years of
Primary education followed by a common core age
curriculum during lower secondary education
On average in Europe, 12% of schools
are private schools
Differentiated branches/streams (ISCED2)
Primary education followed by differentiated
In Europe, the average school size for a
secondary education delivered through distinct
15-year old is 605 pupils
educational pathways
Distribution of 15 year-old Students by Size of School

1,310
1,062 984
938 920 862 768 750 737 696 674 633 624 620 620 616 575 561 554 534 480 475 433 432 419 418 411 410 388 330 296 258 159
n/a n/a n/a
Distribution of Students Attending Public or Private Schools Primary and Secondary Schools (ISCED 1-3) Private Public
100%
75%
50%
25%
0%
Source: Eurydice, OECD, PISA, Eurostat, UOE

IBIS Capital | A European Perspective on e-Learning Note: 49
(1) There are some country discrepancies in the data
(2) Where the data is not available for a specific year, the latest available data has been taken
Length of Compulsory Education & Expected Duration in Education
Compulsory Education Across Europe Expected Duration of Education for 5

year olds 2000-2009 (ISCED 0-6) Key Points
Part-time 1980/81 2006/07 2010/11
2000 2005 2009 Across Europe, compulsory full-time
0 2 4 6 8 10 12 14 16 18 20 0 5 10 15 20
education lasts for a minimum of 8
Belgium (FR) EU27
Belgium (DE)
years with most countries lasting
Austria
Belgium (NL) Belgium
between 9 and 10 years. This
Bulgaria Bulgaria
represents the recurring school market
Czech Republic Croatia that is replenished year on year
Denmark Cyprus
Germany Czech Republic On average, the duration of education
Estonia
Ireland
Denmark across the EU-27 was 17.2 years, c.9
Estonia
Greece years more than the minimum length
Finland
Spain
France
of compulsory education
France
Germany
Italy
Greece In addition, the Europe 2020 Strategy
Cyprus
Hungary has set a target that at least 95% of
Latvia
Lithuania
Iceland children between the age of four and
Luxembourg
Ireland the age for starting compulsory
Italy
Hungary primary education should participate
Latvia
Malta
Liechtenstein
in early childhood education
Netherlands
Lithuania
Austria
Poland Luxembourg
Portugal Malta
Romania Netherlands
Slovenia Norway
Slovakia Poland
Finland Portugal
Sweden Romania
UK (excl. N. Ireland) Slovakia
Northern Ireland Slovenia
Iceland Spain
Liechtenstein Sweden
Norway Switzerland
Croatia Turkey
Turkey United Kingdom
Source: Eurostat, UOE

(1) There are some country discrepancies in the data, new UK reporting in 2009 obscures the data on the expected duration of Education for 5 year olds
(2) Where the data is not available for a specific year, the latest available data has been taken
Europe Still Requires Widespread Improvement in Basic Skills
Percentage of Low Achievers in Basic Skills in 2006 and 2009

Key Points
60 2006 2009 Evidently, there has been a lack of
41
36
40
significant widespread improvement
40
23 24 26
28
25
across Europe from 2006 to 2009 in
21 20 20 21 21 22 23
20 18 19 17 18 18 18 17 18 basic competencies such as reading,
Reading
15 15 17 16 15
20 13 14
8 maths and science
n/a
0
The EU-25 mean of low achievers, i.e.
Malta
EU
Belgium
Ireland
France
Italy
Latvia
Iceland
Austria
Slovenia
Czech
Germany
Spain
Cyprus
Hungary
Poland
Portugal
Finland
Turkey
Denmark
Netherlands
Croatia
Estonia
Luxembourg
Romania
Sweden
UK
Liechtenstein
Norway
Bulgaria
Greece
Lithuania
Slovakia
those who fail to acquire basic skills by
the age of 15, is c.20% in reading,
maths and science. The Europe 2020
Strategy is targeting to bring this
60 number below 15% across Europe
47 47
42
40 34 33
30
24 23 25 26 24 23 21 24
22 19 22 21 23 22 20 21 21 20
17 19 17 18
20 13 13
Maths
8 10
n/a
0
EU
Belgium
Ireland
Germany
Italy
Malta
Austria
Iceland
Spain
France
Latvia
Poland
Czech
Denmark
Slovenia
Finland
Turkey
Hungary
Estonia
Netherlands
Portugal
Romania
Croatia
Liechtenstein
Norway
Bulgaria
Greece
Cyprus
Sweden
Lithuania
Luxembourg
UK
Slovakia
60
39 41
40 33 30
25 24
18 19 21 21 19 19 19 18
18 18 17 17 15 15 15 17 17 15 15 16
14
Science
20 8
13 13 11
6
n/a
0
Malta
EU
Belgium
Ireland
Spain
Italy
Latvia
Iceland
Austria
Czech
Germany
France
Poland
Finland
Turkey
Portugal
Slovenia
Hungary
Denmark
Estonia
Luxembourg
Netherlands
Romania
Sweden
Croatia
UK
Liechtenstein
Norway
Bulgaria
Greece
Cyprus
Lithuania
Slovakia

The Majority of 15 Year Olds Spend Little Time on Homework
Distribution of 15-year-old students according to the number of hours a week they

report spending on homework and study at home, public and private sectors Key Points
combined, 2009 Language of instruction Maths Science
The findings from an analysis by Hattie
No time or <2 Hours 2 4 Hours >4 Hours (2009, p. 234) conclude that the
frequency of mathematics homework
AT AT AT has a positive impact on achievement,
BE (DE) BE (DE) BE (DE)
BE (FR) BE (FR) BE (FR)
whereas homework that requires
BE (NL) BE (NL) BE (NL) longer periods to complete does not.
BG BG BG Furthermore, rote learning leads to
CY CY CY more effective results with increased
CZ CZ CZ
DE DE DE knowledge retention
DK DK DK
EE EE EE Despite the statement above on rote
EL EL EL
ES ES ES
learning, Finnish students do less
EU EU EU homework and spend fewer hours at
FI FI FI school than the OECD average and the
FR FR FR
HR
country consistently ranks among the
HR HR
HU HU HU Top 3, sharing honours with education
IE IE IE superpowers, such as China, Korea and
IS IS IS Singapore, which are associated with
IT IT IT
LI LI LI rigid discipline and rote learning
LT LT LT
LU LU LU The Flipped Classroom concept has
LV LV LV
MT
been gaining traction in Europe
MT MT
NL NL NL changing the emphasis on the aim of
NO NO NO homework or home learning
PL PL PL
PT PT PT
RO RO RO
SE SE SE
SI SI SI
SK SK SK
TR TR TR
UK - 1 UK - 1 UK - 1
UK-SCT UK-SCT UK-SCT
60 70 80 90 100 0 10 20 30 40 0 10 20

(1) UK 1 includes England, Northern Ireland and Wales; UK SCT includes only Scotland
Language Learning Across Europe
Percentages of Pupils Learning at Least 2 Average Number of Languages Learned

Key Points
Foreign Languages in EU, 2000-2010 Per Pupil in General Upper Secondary
ISCED 2
2.5 - 3.0 At present, it is obligatory to learn at
ISCED 3 2.0 2.4 least one foreign language in
ISCED 3 prevocational and vocational 1.5 1.9 compulsory education with a second
80%
1.0 1.4 language optional in most of the
1.5 0.9 member states
60%
The Barcelona European Council of
40% 2002 set the objective for teaching at
least two foreign languages from a
early age, we can see that over the
20% period of 2002-2012, pupils learning 2
languages in ISCED 2-3 increased
0%
Despite the above statement, the ESLC
2001
2000
2002
2003
2004
2005
2006
2007
2008
2009
2010
average of mastering the first foreign

language to an independent level is
Percentage of Tested Pupils Achieving Each Level, 2011 below 45% which significantly worsens
at mastering a secondary level with an
First Foreign Language Second Foreign Language average at 25%(1)
Beginner Basic Advanced Basic Independent Advanced Independent
Malta (EN) Belgium NL (EN)
Sweden (EN) Belgium DE (EN)
Estonia (EN) Malta (IT)
Netherlands (EN) Netherlands (DE)
Slovenia (EN) Slovenia (DE)
Greece (EN) ESLC average
ESLC average Belgium FR (DE)
Croatia (EN) Spain (FR)
Bulgaria (EN) Estonia (DE)
Belgium DE (FR) Bulgaria (DE)
Portugal (EN) Greece (FR)
Spain (EN) Croatia (DE)
Belgium FR (EN) Portugal (FR)
Poland (EN) France (ES)
Belgium (NL) Poland (DE)
France (EN) Sweden (ES)
UK ENG (FR) UK ENG (DE)
0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% 100%
Source: First European Survey on Language Competences: Final Report

(1) A sample of 54,000 pupils at the end of ISCED 2 has been used
(2) There are some country discrepancies in the data
School Assessment Criteria & Evaluation
Elements of the Education System Existence of Standard Criteria for the

Subject to Evaluation (ISCED 1-3), External Evaluation of Schools Key Points
2010/2011 (ISCED 1-3), 2010/11
In most countries, schools are subject
Local authority Standard to external evaluation, while internal
evaluation criteria evaluation is performed by school staff.
Internal school evaluation can be
mandatory or even compulsory in
School and No standard
some geographies
teacher evaluation criteria
School evaluation may focus on a

Mainly teacher No external
number of areas including: the quality
evaluation evaluation of educational or administrative
processes adopted by schools;
compliance with standards or
Mainly school regulations; and, outcomes of the
evaluation No data teaching and learning process
Where external valuation is the

Publication of Findings from the External Use of Student Performance Data in the
common occurrence, student
Evaluation (ISCED 1-3), 2010/11 External Evaluation (ISCED 1-3), 2010/11
performance is the key proxy for
Routine Standard school evaluation
publication criteria
No routine No standard
publication criteria
No external No external
evaluation evaluation
Local
autonomy No data
No data
Source: Eurydice
Public Funding Dominates Private Funding
Proportions of Educational Expenditure from Public and Private Sources (ISCED 0-6)
Key Points
in 2008
Private funding Public funding The majority of government
31%
40% expenditure is concentrated at the
17%
18%
16%
lower secondary to post-secondary
15%
13%
13%
13%
12%
10%
14%
10%
13%
10%
10%
9%
10%
9%
8%
8%
20% 6%
9%
6%
5%
non-tertiary education level
n/a
n/a
n/a
n/a
5%
0%
0%
3%
3%
2%
0%
Private funding of education remains
20% marginal (mean of 13.8% across
40%
Europe) with the main driver being the
EU member states policy for the
60% funding of education-oriented pre-
primary schooling and tertiary
80%
education
100%
EU
BE
BG
EE
EL
ES
AT
PL
PT
RO
CH
CZ
DK
IT
CY
MT
DE
IE
FR
FI
IS
NL
LI
NO
HR
TR
LV
LT
LU
HU
SI
SE
SK
UK
Total Public Expenditure on Education by Education Level (ISCED 0 to 6) as a
Percentage of GDP, 2008
ISCED 0 ISCED 1 ISCED 2-4 ISCED 5-6 ISCED 0-6

10
8 8 7
8 7 7 6 6 7
5 6 6 6 6 6 6
6 5 5 5 5 5 5 5
5 5 5 4 4 5
4 0
4
2
2
n/a n/a n/a
0
Czech
Malta
Ireland
Iceland
Spain
Belgium
Latvia
Italy
France
Turkey
Poland
Austria
Slovenia
Finland
Hungary
Romania
Portugal
Netherlands
Norway
Liechtenstein
Estonia
Denmark
Croatia
EU27
Switzerland
UK
Sweden
Luxembourg
Greece
Slovakia
Lithuania
Cyprus
Bulgaria
Germany
Source: Eurostat, UOE, National Account Statistics

Decentralised Decision-Making For Operational Resources
Location of Decision-Making Powers to Determine the Overall Amount of Public

Key Points
Expenditure on Specific Resources for Schools (ISCED 1-3), 2010/11
Centrally/Top Local y No data Expenditure on staff represents more
Teaching Non-Teaching Staff than 70 % of total annual education
expenditure
Current expenditure represents more

than 84 % of total expenditure by
public institutions in all
countries
From the evidence available, it is clear

that there is a tendency for decisions
relating to the financing of teaching
staff to be taken by central
governments or by the regional body
with full responsibility for education,
while decisions relating to the
financing of operational resources tend
Capital Expenditure/Immovables and Current or Operational Expenditure
to be shared between head teachers
Movables and local authorities

School Autonomy is Widespread in Europe
Decision-Making Autonomy for Teaching and Learning Resources across European

Key Points
Common Setting internal
Curriculum content Choosing teaching Pupil grouping for
compulsory core Choosing textbooks pupil assessment
of optional subjects methods compulsory learning
curriculum criteria
Schools have least autonomy in areas
BE (FR) a
BE (FR) b
directly related to the principle goals of
BE (DE) a their education system, where central
BE (DE) b authorities define a content-based or
BE (NL)
BG goal-oriented core curriculum that all
CZ teachers should follow
DK
DE
EE Teachers across Europe are highly
IE
involved in choosing teaching
EL
ES methods, setting internal assessment
FR criteria and choosing content
IT
CY
LV The operational expenditure on
LT
LU
content and teacher tools (including
HU LMSs) are often made by the school
MT head whereby the school governing
NL
AT
body is likely to be involved with
PL matters concerning optional core
PT
RO
curriculum content or grouping pupils
SI for compulsory learning
SK
FI
SE
UK-1
UK-2
UK-3
IS
LI
NO
HR
TR
Key
Full autonomy a) Schools for which the Community is directly responsible and a minister is the responsible authority
b) Schools in the public and private grant-aided sector. In the grant-aided sector, the responsible authority is
Limited autonomy
deemed the school-based management body
No autonomy
UK-1 England and Wales
Not applicable UK-2 Northern Ireland
UK-3 Scotland
Local authority decision-making
Source: Eurydice, Parthenon U.S. Teacher Survey (Dec2012)


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IBIS Capital | e-Learning

IBIS Capital | A European Perspective on e-Learning

IBIS Capital | A European Perspective on e-Learning 2

Adult education: Self-learning and personal development

IBIS Capital | A European Perspective on e-Learning 3

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

IBIS Capital | A European Perspective on e-Learning 4

IBIS Capital | A European Perspective on e-Learning

Significant Market Size Split Between Corporate & Academic

A Highly Fragmented Market European M&A still Nascent

Limited Invested Capital to Date IBIS Capitals View on Europe

Expectations 2-5 years

BYOD Strategy Digital Preservation of Research Data

MOOC Web-based Office Productivity Suites

Social Media in Education Self-publishing

Social Learning Platform for Education ePortfolios

Personal Learning Networks

Source: IBIS Capital, Gartner

2011A Global Education Expenditure by Geography

($bn) Breakdown of 2011 Total Expenditure

Global Education Expenditure Forecast by Subsectors

($bn) Global education expenditure market is

e-Learning Expenditure Forecast by Subsectors

Education Expenditures as a % of GDP (2000 vs. 2008)

0% State of the labour market impacts

Source: Eurostat, UOE, World bank

Direct Investments in the Academic e-Learning Market (1) Key Points

($m) 2008-2012 Est. 48% Direct investments in the academic e-

Source: Ambient Insight

Direct Investments By Type of Target Customer (1)

80 750 Investment in consumer-facing e-

Mobile-based e-Learning continues to

Cognitive Social Learning Mobile Learning

Source: Ambient Insight

m-Education Market by Region(1)

Source: McKinsey, Research reports

Direct Investment and Deal Volume Since 2007(1)

Management major round for the company since being

Source: Capital IQ as at 9 Jun 2013

e-Learnings Most Active Corporate Acquirers & Investors Key Points

Private 4 3 7 Private equity-backed Blackboard

Public 2 0 2 Macmillan is primarily active through its

1 $43m 1 $6.5m The size of investments in US companies

Date of Total Capital

Bill Gates, Benchmark Capital, Dragoneer

IBB Beteiligungsgesellschaft, Kizoo

Provides open source and agile training programmes and

Online community that teaches people languages through

Date of Total Capital

Cloud-based talent management software specifically

American Public Education

Source: Capital IQ, TechCrunch, press releases, as at 9 Jun 2013

Global e-Learning Deal Value ($m) Eur Deal Value ($m)

Source: Press releases, SEC filings, Capital IQ as at 9 Jun 2013

Offer Target / Target Transaction

2.3m users Expands researcher workflow offerings and builds

Entry into US market

Developed OpenMinds, a free platform that "acqui-hire" plus adds 5 apps