Dear Friends and Colleagues,
We hope that you and your loved ones were able to enjoy the summer months and the Labor Day holiday weekend. Even more so than in years past, Labor Day ’21 deserves a more thoughtful reflection, creating a moment where we pay tribute to the American workers that keep our society moving forward and reflect on shared challenges – never taking for granted the workplace rights and protections that enable the pursuit of our dreams. And for those that celebrate the Jewish holidays, this time of year between Rosh Hashanah and Yom Kippur provides us with a period for further introspection. Taking the time for thoughtful pause is particularly important in a paradoxical world where deep and complex challenges are often paired with exciting and rewarding opportunities.
This time of year also means that many of our school-age children are back in class or off to college. But we all know that there is nothing normal about our school buildings (or our workplaces) right now. As we enter the third school year impacted by the Covid-19 pandemic, we are once again reminded that life is different in 2021.
For most of the last 18 months, our mindset has been geared towards getting through the pandemic. We relied on resiliency, creativity, adaptation, and empathy to help us lead through unchartered waters and make the decisions necessary to survive and hopefully eventually thrive. When high-efficacy vaccines were produced in record time and distribution was beginning to roll out, we declared that the light at the end of the tunnel was lit! Collectively, we relied on our determination, agility, and mental strength to push forward and be the leaders our organizations needed. Yet this mindset of getting through no longer feels right. We have had a rude awakening as the Covid variants raise questions about the efficacy and durability of vaccines, target the unvaccinated, and put our little ones and vulnerable loved ones in harm’s way once again. We are appreciating even more the need to adopt a mindset of living with the pandemic – one where we must combine our highest executive functioning skills with our awareness that life moving forward will remain ambiguous. This will be easier for some and harder on others but most certainly will require the support and ingenuity of the entire Avathon community. It takes a village.
We are thrilled to share several updates:
A COMPOUNDING IMPACT THAT WILL ENDURE
On August 17th, we completed the sale of Reading Plus, a pioneering leader in the development of adaptive digital literacy solutions, to DreamBox Learning, one of the most impactful and widely used creators of digital math software for children in kindergarten through eighth grade. This combination reflects heightened demand for deeply integrated and impactful solutions as students return to classrooms following a year or more of profound instructional setbacks. We are inspired by the potential of two creative, capable teams coming together and wish the organization well in its pursuit to unlock the learning potential of all students.
For Avathon, Reading Plus was a research-first investment strategy where we partnered with an Executive-in-Residence, Steven Guttentag, to pursue K-12 opportunities in the supplemental digital solutions market. Reading Plus was a wonderful founder-owned company that was seeking strategic and financial support to expand its content library and distribution to more schools and thus to more learners.
“From the moment we began our relationship with Avathon, they understood that investing in research, content, and results would be critically important and core to our commercial success. As a founder who transitioned from CEO to Chairman, I always had confidence in their commitment to our mission. They helped us to source the talent needed to provide more students the opportunity to improve their ability to read and were valued partners at every step in our journey.”
— Reading Plus founder Mark Taylor
OUR GROWING VILLAGE
On August 2nd, we completed our investment in ReUp Education, which partners with colleges and universities to find, engage, and empower the 36 million Americans who stopped out of college without receiving a degree. ReUp’s mission is to remove the obstacles that make it difficult for a learner to start or restart their educational journey, provide a personalized experience that aligns college with the realities of their life and work to produce better long-term career and educational outcomes.
On June 25th, we completed our investment in Student Resource Center, which enables labor unions and other professional associations to offer “education-as-a-benefit” to their members. The company collaborates with its school partners to develop and support associate’s degrees, bachelor’s degrees, and certificate programs in high-demand fields for working adults nationwide. It works to improve student outcomes through hands-on personalized advising and support services.
Both ReUp Education and Student Resource Center respond to massive – and growing – demand from once-nontraditional learners in a moment when the demographics of higher education are undergoing a profound shift. We view their success as key to creating a more inclusive, equitable recovery following a pandemic that exacerbated, but need not calcify, the inequality felt by those without the right educational credential and without a well-paying job. By facilitating educational pathways, these organizations are poised to reach and support millions of American workers keeping our society moving forward by helping to ensure that their skills are aligned with the jobs of tomorrow.
On April 9th, we completed our investment in Galileo Learning, which delivers high-quality, innovation and STEAM summer day camps and other enrichment programs to children aged 4-15. Through these programs, Galileo is committed to developing innovators who envision and create a better world, all while creating a fun environment for campers. The quality and educational efficacy of Galileo’s proprietary curriculum is truly unique and has been validated by Stanford University’s School of Education, among several others.
While in-person learning has been disrupted by the pandemic, we continue to believe in the benefits of experiential, project-based, and hands-on learning for our youth. We share Galileo’s belief that kids who learn to explore and fail with courage – the essence of innovation – are happier, more creative, and more confident when faced with life’s challenges.
A VERY WARM WELCOME
Jon Barber joined our investment team as a Vice President. Jon has spent the last six years in the private equity industry, serving as a Vice President at FFL Partners in San Francisco as well as an Associate at Sageview Capital in Connecticut. Prior to that, Jon was an investment banking analyst at Barclays in their Chicago office. Jon combines his sharp intelligence with his thoughtful style and is passionate about helping entrepreneurs and executives build great companies. Jon is a trivia enthusiast and former Jeopardy! Champion.
Luke Mishu joined our investment team as an Associate. Previously, Luke was an investment banking analyst at William Blair in their Chicago office and a professional athlete playing Major League Soccer for D.C. United in Washington. Luke was homeschooled alongside four siblings through 8th grade and is a passionate believer that there are many different ways to learn.
As we learn to live with the pandemic, in school, in work and in life, we will continue to invest in and strategically support organizations that are showcasing their creativity, agility, and potential for growth and impact. Our current focus areas include:
- Ensuring access to high-quality, enriching early childhood education. Similar to our Big Blue Marble platform, we are pursuing additional strategies, technologies, and talent dedicated to operating or supporting schools and teaching professionals
- Expanding distribution for high efficacy K-12 digital software companies, SEL organizations, and teacher and other human capital training, staffing, and certification companies
- Identifying the next generation higher education partnership opportunities. Analogous to online, international, continuing education, and experiential program management, the private sector has served as a powerful R&D and enablement arm of our college system
- Simplifying the complex workflows and compliance functions of corporations, with a lens towards cybersecurity, contingent worker, and overall risk management
- Improving education to employment pathways and addressing growing skills gaps by removing the existing obstacles standing in the way of individual, institutional or corporate success
The combination of modern technologies, contemporary business models, and entrepreneurial determination has created the backdrop of the current industry boom playing out in both the public and private markets. The success and scale of larger education and workforce companies is a positive tailwind to attract the investment and human capital required to meet this transformational moment. We invite you to join us on this journey. Please contact any member of our team or send a note to email@example.com to start a conversation.
Wishing you a safe, healthy, and rewarding Fall 2021.
The Avathon Capital Team