The document discusses key trends in the global e-learning industry from 2007 to 2012. It highlights that e-learning is the fastest growing segment of education, projected to increase at a 23% compound annual growth rate to $91 billion by 2017. Transaction volume and values have also grown steadily over this period. The document identifies several emerging technologies and models in e-learning seen as disruptive forces, such as MOOCs, adaptive learning, and the use of tablets in education. It also notes issues around the rising costs of traditional education and high student debt levels as drivers for the growth of e-learning.

1. IBIS Capital | Global e-Learning Investment Review
Publishers Software Platform Immersive Learning
MOOCsToolsContent
Smart TechnologyOpen Source Learning Portal
Industry Structure
Key Affecting
Factors
Type of Business
• Regulatory/Curriculum
• Corporate Requirements
• Consumer Requirements
• Scale
• Complexity
• Efficiency
• Online
• Free/Paid
• One-to-One/One-to-Many
• Cost
• Level of Qualification
• Flexibility
Content Management Systems Distribution Customer
Industry Overview
10 Things You Should Know About e-Learning Global Education vs. e-Learning Expenditure Forecasts 2012-2017
Global Education M&A Activity Global Education Fundraising Activity
Transaction
Date
Target Acquirer Target
Sector
Transaction
Value $m
Nov 12 John Wiley
& Sons
Distribution 24
Oct 12 Pearson Management
Systems
650
Oct 12 John Wiley
& Sons
Management
Systems
220
Aug 12 IBM Management
Systems
1,307
Aug 12 Higher One
Holdings
Management
Systems
38
Recent M&A Transactions
Total Capital Raised ($m) Volume
150
120
90
60
30
0
80
60
40
20
0
2007
65
1,435
969 999
2,366
1,349
864
2008
67
2009
67
2010
91
2011
130
2012 ytd
87
6,000
5,000
4,000
3,000
2,000
1,000
0
Transaction
Date
Target Investor Target
Sector
Transaction
Value $m
Nov 12 VegasTechFund Distribution 9.8
Oct 12 Academic
Partnerships
Distribution 1.8
Oct 12 Charles River
Ventures,
Andreessen
Horowitz
Distribution 15.0
Oct 12 PROfounders
Capital
Distribution 4.6
Oct 12 Bill & Melinda
Gates Founda-
tion,
Retro Venture
Partners
Management
Systems
3.3
Recent Fundraisings
e-Learning Breakdown by Sector in 2012 YTD (Volume)
Management
Systems
Content
Distribution
e-Learning Breakdown by Sector from 2007 to 2012 YTD (Volume)
10.0
8.0
6.0
4.0
2.0
0
2012 2015 2017
e-Learning Expenditure: 23.0% 2012-2017 CAGR
Education GiantsIBIS Capital’s 5 Disruptive Businesses
Company 2011 FY
Revenue
$bn
Education
Revenue as % of
Total Revenue
HQ Market
Cap.
$bn
9.1 75% UK 15.2
6.2 37% US 15.7
5.0 74% Japan 4.2
4.1 58% US 2.8
4.7 100% US 2.3
Company Overview Sector HQ Investors
Free online university
courses
Distribution US Andreessen Horowitz, Charles
River Ventures
Social learning
management system
Management
Systems
US Founder Collective, IA, Shasta,
The Social+Capital Partnership
Free education for anyone
anywhere
Distribution US Google, Bill & Melinda Gates
Foundation and other funding
Quiz-based e-Learning apps Content UK Benesse, Atomico Ventures,
Globis Capital Partners
Immersive learning Distribution UK Avonmore Developments, Huda
Associates, Private Investors
1 7
Supported by 1.4bn students
and 62.5m educators
$4.4tn
6
10
US student tablet ownership
grew 257% last year and in
2011 technology adapted
training has penetrated over
40% of the Global 500 Fortune
companies
9
8 Current industry hype
about new ideas and consumer
learning requirments are
disrupting the whole
education eco-system
The US(1)
to push forward with
Project Tin Can which will set
industry-wide e-Learning
standards for software
IBIS Capital’s near term view
on e-Learning:
IBIS Capital’s hot picks
for e-Learning for 2013:
next generation content and
its creation tools, adaptive
learning, collaborative learning,
Learning Record Stores (LRS),
re-purposable learning, Massive
Open Online Courses (MOOCs)
and Open Education Resource
(OER) management
Consolidation will be the theme
as businesses seek to expand
geographic reach, scale and
service offering
3
of the world’s population
will lack basic literacy skills
by 2015
Internet users have grown
870% since 2000 massing
over 2.4bn users globally and
causing an evolutionary shift
in how people can engage
with the world
5
2.4bn
internet
users
In Europe alone there are
e-Learning companies
3,000+
2012 global education expenditure
23
2
The e-Learning market
is the fastest growing market
in education, standing at
$91bn in 2012
forecasted out to 2017
Global Education Expenditure
Breakdown by Sector 2012
Management
Systems
Content
Distribution
Note: * Client of IBIS Capital
All market data as at 10 December 2012 and using historical exchange rates where relevant | Source: IBIS Capital analysis, Learning Light, GSV Education report, Ambient Insight, Microsoft, Consumer Financial Protection Bureau, Annual Survey of Colleges, The College Board,
Integrated Postsecondary Education Data System (IPEDS), U.S. Department of Education, National Center for Education Statistics, Babson Survey Research Group, Internet World Stats, McKinsey, Educause, ASTD, Kompass
4
700m
$1tn
loan debt
Total Deal Value ($bn)
Total Deal Value ($bn)
Total Capital Raised ($m) Volumee-Learning as % of Total Volume
e-Learning as % of Total Volume
2013
%
individuals
CAGR
257%
61%
26%
13%
70%
21%
9%
The cost of education
has risen 84% since
2000, 37% higher than
CPI, which has lead to
situations like the US
student loan debt accu-
mulation to over $1tn.
e-Learning is a cost
effective alternative
(1) The Advanced Distributed Learning company is sponsored by the US Secretary of Defense and is contributing significantly to Project Tin Can
(2) Includes transactions above $20m since 2007 and excludes transactions with undisclosed values. Includes the McGraw-Hill / Apollo transaction, which is still pending
(3) Includes fundraisings above $1m since 2007 and excludes fundraisings with undisclosed values
*
2007 2008 2009 2010 2011 2012 YTD
50%
8%
8%
34%
(2) (3)
Education Expenditure: 7.4% 2012-2017 CAGR
Global Education Expenditure ($tn)
4.4
5.4
6.3
K-12 Post Secondary OtherCorporate & Government Learning
50.0
40.0
30.0
20.0
10.0
0
47%
13%
56%
68%
74% 75%
20.5
2.4 1.2
4.2
10.5
8.5