Sibling Group Holdings, Inc. (SIBE) Ahead of the C
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According to analysis contained in a Q1 2015 report from investment banking firm, Capstone Partners, long known for their insights into M&A and capital markets, the $788.7 billion annual spend in K-12 education markets has become an easy target for disruptive educational technologies in recent years, as the industry moves increasingly to modernize via digital solutions that improve both overall systemic efficiencies, as well as student outcomes. A company like Sibling Group Holdings, Inc. (OTCQB: SIBE), which is leveraging an EdTech (education technology) roll-up strategy that spans eLearning and blended learning, as well as curriculum design and backend education, is poised to succeed mightily in this actively consolidating market.
The company’s momentum is due in large part to an already established and increasingly strong brand presence, their acquisitive nature and expansion of core offerings, as well as an appetite for providing comprehensive, soup-to-nuts solutions for both domestic and global education markets. Solutions which run the gamut from curriculum to course certification as no other player in the industry today. Ranging from tailored Common Core and iNACOL (International Association for K-12 Online Learning) compliant curricula for the domestic markets, complete with assessment and course certification, to ESL (English as a second language) minded and globally approachable frameworks. A growing emphasis on providing solutions for the broader, underserved, and highly lucrative international markets, will likely emerge as one of the company’s strongest selling points long-term.
Capstone’s Q1 report on the education market was particularly focused on M&A activity within the sector, making the case that the projected acceleration of such activity in coming years – driven in large part by attractive valuation multiples resident in buyout target technologies and capabilities that will help companies thrive as the industry rapidly evolves – was the strongest indicator of how factors like eLearning are revolutionizing the industry worldwide. Sibling Group’s Blended Schools Network (BSN) business unit (http://blendedschools.net) is a perfect example of transformative eLearning in this space, as it provides some 192 Common Core compatible master courses for K-12 and does so via a Learning Management Systems (LMS) that tracks student activity and results, while also providing a hosted environment that enables course authoring.
BSN features educational technology company Instructure’s cloud-native Canvas LMS, in addition to complete online Language Institute courses covering a wide variety of languages from Chinese to Latin, all of which are oriented along current ESL parameters. The BSN curriculum was recently certified in California according to the University of California’s A-G requirements (all subjects from History and Social Science “A” to College-prep and elective “G”), when Mountain House High School took their personalized learning initiative to the next level and worked with SIBE to create a BSN-based personalized learning environment. This was a huge win for SIBE, as California is the largest K-12 market in the country, with around $76.6 billion in total K-12 funding budgeted for this year, and General Fund resources of $109.4 billion.
One of the biggest changes in the industry is to the roughly $14 billion textbook market, which has historically been in the iron grip of a tiny handful of companies like Pearson and McGraw-Hill. This market is under immense pressure today from eLearning and the continuing shift to digital and open-access education formats, with increasingly popular educational alternatives like EdX, MIT OpenCourseware, and Coursera threatening to be the extinction level event that wipes out such dinosaur textbook companies. BLS data makes the case quite clear as to one major reason for the extinction of antiquated print textbooks, showing an 800 percent rise over the past three decades in the cost of such books, a rise outpacing the CPI by 550 percent, and even outpacing fast-rising medical services by as much as 225 percent.
Hence the ongoing arms race in eLearning, where companies like MOOC-focused (massive open online courses) Coursera have added a number of schools, courses and languages to their basket in recent years. Or companies like Chegg, Inc. (NYSE: CHGG), which used to focus on renting/selling textbooks, has executed a series of key acquisitions over a similar time span, with a decided emphasis on transitioning to an all-digital footprint. Chegg did a spate of acquisitions last year, spending a total of $57.7 million in cash and stock in order to pick up college coupon book mavens The Campus Special, online/on-demand video tutoring services provider InstaEDU, and internship marketplace interactive tools and services provider Internships, LLC.
In this light, SIBE’s acquisition of Urban Planet Mobile™ (UPM), a platform designed to teach people all over the world the English language, which caters specifically to mobile delivery, makes a great deal of sense. Especially considering Gilfus Education Group’s projections that the global K-12 education market will soar to $2.9 trillion by 2017, led by countries like China and India, as well as the GCC (the Persian Gulf states excluding Iraq), where TechNavio forecasts a CAGR of over 3 percent through 2019. UPM, via patent-pending design and delivery, makes lessons available on any mobile, not just the latest smartphones, making the platform ideal for countries like India, where mobile coverage far exceeds the coverage of ESL class availability.
SIBE’s recent announcement of a strategic partnership and $3.75 million funding arrangement with PRC-based international education management and consulting company, Shenzhen Times, which develops and sells everything from computer networks and software, to communications products, gives UPM access to a massive K-12 market worth well over $172 billion. A market which is projected to grow at a CAGR of 12 percent through 2018. With broad traction across not only the education market, but on into the healthcare and literacy markets, UPM has the potential to see a good deal of upside from SIBE’s expansion into China and the company is not intent to rest on their laurels here either. Sibling Group plans to expand further into the burgeoning global eLearning and mEducation markets, leveraging a host of compelling products and services.
Pure-cloud modular LMS developer Docebo recently forecast the self-paced global eLearning market alone as climbing to $51.5 billion by next year and the ongoing M&A activity within the EdTech sector is a clear indication of how hot the market is, and will likely remain for some time. TechNavio forecasts for the global eLearning market as growing at a CAGR of nearly 26 percent through 2018 and SIBE’s EdTech roll-up strategy, where they look to become one of the key players in the delivery and management of educational content, makes them an exciting landmark to check out amid the lush eLearning landscape. The company’s distinct advantage of being a single source vendor that can provide a complete, curriculum to course certification solution set, including the comprehensive course authoring tools and systems needed to help maximize student outcomes and better train educators, sets SIBE apart from the competition very clearly.
Take a closer look at SIBE by visiting www.siblinggroup.com
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