eLearning Brothers Raises $54 Million
Today eLearning Brothers (eLB), an eLearning solutions company in American Fork, announced it has raised a $54 million investment from RLG Capital (Park City, Utah) and Trinity Investors, (previously Trinity Private Equity Group), based in the Dallas area. The funding has enabled the American Fork-based learning solutions company to acquire Rehearsal and Origin Learning and to recapitalize its debt. As part of the restructuring, Prudential’s PGIM Private Capital has replaced all previous debt providers and is now the sole debt holder for eLB, providing the company with a $100 million line of credit for future acquisitions.
"Now with the Prudential relationship, it's a lot easier for us to acquire," says Andrew Scivally, CEO of eLearning Brothers. "Basically, there is a certain amount of money they've already pre-approved. Most of the due diligence has already been done. So as long as the company we are looking to acquire fits our criteria, typically mature companies, but foremost profitable ones...Boom! We're done. We should be able to move a lot faster now."
Rehearsal and Origin Learning join the expanding universe of eLB’s offerings, which also includes: The Game Agency, a gamification solution; Lectora, a rapid authoring tool; CenarioVR, a virtual reality course builder; Rockstar Learning Platform, a next-generation LMS.
Techbuzz profiled the eLB in October 2020 when the bootstrapped company had just completed its initial acquisitions of Trivantis and Edulence, giving it additional course building and learning management tools.
“This new investment is evidence of our continuing confidence in eLearning Brothers’ vision to create a one-stop integrated online platform for the corporate learning industry,” says Greg Robinson, Co-founder and Managing Partner of RLG Capital. “With our five acquisitions over the past 20 months, and with the growth of remote workers since the pandemic, the company has leapfrogged the competition.”
TechBuzz sat down with Andrew Scivally, CEO of eLearning Brothers to talk about his company and discuss the dramatic developments that have happened to eLB since we talked in 2020.
The company sells eLearning products and services mostly to the corporate sector. "Probably 95% of our revenue or more comes from the corporate space. Our biggest customers right now are Procter and Gamble, Twitch, PayPal, Microsoft, AARP," says Scivally.
"So much has changed over the past 20 months." continues Scivally. "In 2020, we had about 50 employees, with 40ish based in Utah. Now we have over 500, and most of them are international. We're expecting to do $40 million in revenue this year. After bootstrapping for ten years, this has been our first experience in working with investors, but it has been great. It has helped us buy five different technologies and services that we are integrating within our suite of products, including adding unified user management, unified reporting and the like. Ultimately it means we can offer better learning experiences for our customers, their employees and their customers. And part of that is offering services. 50% of our revenue comes from the offering services. Not all tech companies offer services, but our customers need it. They appreciate it. It is becoming an increasingly large part of our business. Currently about 50% of our revenue comes from it, and we make great margins on it. It helps us build our products. It is part of our story and we love offering services to our customers."
Scivally believes eLearning Brothers offers an attractive solution for mature, profitable eLearning companies that are looking to make an exit while at the same time interested in playing a role in a larger story. He further reflects, "we're in an industry that's about 20 years old. eLearning companies really started to come on the scene around 2000. Those founders are now in their 50s or 60s and trying to figure out what to do with their companies that are doing $5 to $15 million in sales a year. They're looking at an industry that's going crazy. Sure, it's growing, but it's also having a lot of M&A activity. You're a $5 million 20 year old business. A VC is probably not going to put a ton of money into you. You could sell, but you're not going to get a massive multiple. So what to do? If your $5 million business suddenly becomes a part of something much bigger, a $50, $60, or $100 million business, that is more interesting, and you are going to see a lot more opportunities."