Another Investment, Another Round of Layoffs For Civitas Learning


Another Investment, Another Round of Layoffs For Civitas Learning

By Sydney Johnson     Feb 27, 2019

Another Investment, Another Round of Layoffs For Civitas Learning

Private equity firm Francisco Partners quietly announced last week that it led an investment round in Civitas Learning, an Austin, Texas-based education company best known for its predictive analytics software used in higher-ed institutions.

Civitas did not disclose financial terms for its deal with Francisco Partners, which also owns Renaissance Learning and a majority stake in Discovery Education. Jason Brein, a partner at Francisco Partners, said in an email that the “investment in Civitas is an important one for us.” Other investors including Rethink Education, SJF Ventures and Lumina Foundation also participated in the Civitas’ latest investment round.

But as the company raised new money, it also cut staff. Recent employee reviews on Glassdoor suggest that Civitas also laid off workers in the months leading up to the investment. Representatives at Civitas confirmed the layoffs, but did not say the number of employees that were let go.

“Clearly it’s never a fun decision to let folks go and to have any reduction from a team. It’s always a hard decision from a leadership perspective of what’s the right thing to do and when,” April Downing, chief operating officer at Civitas, said in an interview. “The thing critical for us was to build a sustaining software and services company, so we wanted to drive to be a profitable and cash-flow positive business.”

This isn’t the first time Civitas has received money and cut headcount. In 2017, about a month before the company announced an extension of its $60 million Series D round, the company laid off 10 percent of its staff. CEO Charles Thornburgh at that time attributed the layoffs to a “strategic shift” that “forced [Civitas] to let go of some talent and post new jobs for positions better suited for the company’s future.”

Downing said the company now has just under 200 employees, and later added in an email that “the recent reductions impacted fewer employees than in 2017.”

Civitas’ most recent deal has industry watchers curious. “The deal looks more like a fire sale than a growth round,” Michael Feldstein wrote on e-Literate.

“Companies generally don’t have layoffs when they are expanding and doing well. It suggests they are tightening their belts, pivoting and refocusing,” he told EdSurge.

Founded in 2011, Civitas claims its analytics software can help higher-ed institutions gather and analyze student data to make predictions about when students might need nudges or notify advisors if they should intervene when students show early signs of struggle. Prior to this latest investment, the company has raised a total of $64 million.

The company’s customer growth appears to be inconsistent. In June 2018, Civitas claimed to have more than 325 higher-ed partners. In November, it boasted in a press release to have nearly 400, and on Wednesday Downing said currently the company has around 350.

In the higher-ed space, Francisco Partners has also invested in ExLibris, a library management software company. “Education technology is an important and growing area of focus for our firm,” Brein said.

In the last year Civitas has acquired ClearScholar, a mobile communication app for higher ed. It also acquired college advising platform AdviseStream. It also recently announced a partnership with Ruffalo Noel Levitz, which offers software and consulting services for enrollment management and college fundraising.

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