A Record Year in Leadership Development

The Leadership Development market has gained substantial interest from investors in the first half of 2018 as corporations are seeking out new ways to develop current leaders and  cultivate the leaders of tomorrow. Technology innovations in the space are allowing corporations to more quickly discover knowledge gaps, customize learning solutions and continuously track and nurture a leader’s growth. This segment may attract more than $1.0 billion in capital and M&A transactions this year, although more than half of the market value of transactions was dominated by the Vistage Worldwide LBO completed by Providence Equity Partners early in the year.

Through the first six months of 2018, the Leadership Development providers are driving four trends: 1) Larger providers are acquiring innovations rather than building; 2) The rise of coaching platforms for mobile optimization; 3) Microlearning and specialized content to improve engagement; 4) Burgeoning integration of AI and VR to enable new methods of training and development.

1. Consolidation

Trend Insight

• Large consulting firms are buying out smaller coaching and consulting firms for their technology, customer base and addition to in-house services.
• M&A continue to dominate the Leadership Development headlines with 7 notable transactions in the first half of 2018.

Notable Transactions

• Brand Learning acquired by Accenture for $30M in August 2017 to help clients deliver a more integrated customer experience.
• Client Wise acquired by Northwestern Mutual in January 2018 to add expertise and industry presence.

2. Rise of Mobile Coaching Platforms

Trend Insight

• The need for convenient on the go coaching.
• Coach matching based on individual learning preferences.

Notable Transactions

• Torch Leadership Labs, a virtual coaching platform received $120K accelerator funding in March 2018.
• Eagle Productivity Solutions acquired by NIIT for $8.1M in January 2018 to expand training capabilities and global customer base. Estimated valuation was below 1.0X revenue.

3. Micro Learning

Trend Insight

• Learning in bite-sized modules to foster better engagement.

Notable Transaction

• Radiate acquired by Intercontinental Exchange (owner of the New York Stock Exchange) in June 2018 to add short-form expert videos to better attract new listings on the NYSE.
• Better Up received $25M in Series B funding in March 2018 to accelerate growth with international expansion.

4. Artificial Intelligence and Virtual Reality

Trend Insight

• AI used to identify potential talent and skills needed to grow talent
• Scenario based training via virtual reality settings

Notable Transaction

• Butterfly.ai raised $2.5M in seed round funding in October 2017.
• Mursion raised $2.5M in VC funding in December 2017.

DISCLAIMER This presentation is intended for information and discussion purposes only and does not constitute legal or professional investment advice. Statements of fact and opinions expressed are those of the participants individually and, unless expressly stated to the contrary, are not the opinion or position of Harbor View Advisors, LLC (“HVA”). The information in this presentation was compiled from sources believed to be reliable for informational purposes only. HVA does not endorse or approve, and assumes no responsibility for, the content, accuracy or completeness of the information presented.