K-12 EdTech and Literacy M&A: A Founder's Guide to the 2025-26 Market

Introduction

The K-12 education technology sector is navigating one of its most consequential periods. Two powerful forces are reshaping the landscape simultaneously: the Science of Reading movement, which is driving a wholesale replacement of literacy curricula across American schools, and the ESSER funding cliff, which has ended the largest infusion of federal education spending in history. For founders of K-12 EdTech companies, particularly those in literacy, curriculum, assessment, and student information systems, these dynamics create both urgency and opportunity in the M&A market.

The deal data confirms an active market. The RL Hulett Q2 2025 Education and Training M&A Update reported 187 deals in Q2 2025, a 10.7% increase from Q1 and a 10% rise from the same period in 2024. The education sector index rose 15.9%, outperforming the S&P 500. Notable transactions include Tal Education Group's $95 million acquisition of Epic! Kids, the digital reading platform, and continued aggressive acquisition activity by IXL Learning and 95 Percent Group.

The Science of Reading has been particularly transformative. Over 40 U.S. states have now passed legislation mandating evidence-based reading instruction, creating a massive market for structured literacy curricula, phonics-based programmes, and aligned assessment tools. Companies positioned at the centre of this movement, such as 95 Percent Group (backed by Leeds Equity Partners), Lexia Learning (part of IXL/Rosetta Stone), and Heggerty, are acquiring complementary assets and building comprehensive literacy platforms.

For founders in this space, the window of opportunity is significant but time-sensitive. The ESSER cliff has compressed district budgets, creating pressure on companies reliant on one-time funding. At the same time, the mandated shift to Science of Reading curricula is creating sustained, structural demand that will outlast any single funding cycle. Understanding how these dynamics affect valuations, buyer interest, and deal structures is essential for founders considering their options.

Market Overview

The K-12 EdTech Landscape

The K-12 education technology market is substantial and growing. The total U.S. EdTech market was valued at approximately $74 billion in 2024, with the K-12 segment representing roughly $34-35 billion of that total. The global EdTech market is projected to grow by $170.8 billion between 2025 and 2029 according to Technavio, at a CAGR of approximately 15.9%. However, within this broad market, conditions vary dramatically by sub-segment.

Literacy and curriculum companies are experiencing the most dynamic conditions. The Science of Reading movement has created a generational shift in how reading is taught, moving from "balanced literacy" and "whole language" approaches to structured, phonics-based instruction grounded in cognitive science research. This shift has rendered many legacy curriculum products obsolete overnight, while creating enormous demand for evidence-based alternatives.

Key players in Science of Reading-aligned products include:

• 95 Percent Group (Leeds Equity Partners portfolio): provides the 95 Phonics Core Program, phonological awareness curricula, and the One95 Literacy Platform. The company has executed a series of acquisitions including Tools 4 Reading (February 2023), Sortegories (April 2024), and All About Learning Press (September 2025).
• Lexia Learning (part of IXL Learning, formerly Rosetta Stone): provides adaptive literacy software including Lexia Core5 and Lexia PowerUp, widely adopted in Science of Reading implementations.
• Heggerty (now Heggerty by Hand2Mind): provides phonemic awareness curricula and acquired Literably, a digital literacy assessment platform, in 2024.
• Amplify (owned by News Corp): provides the CKLA curriculum, a leading Science of Reading-aligned programme.
• Curriculum Associates (i-Ready): provides adaptive diagnostic and instructional tools widely used in K-12.

Student information systems (SIS) form the operational backbone of school districts, managing enrolment, attendance, grading, scheduling, and compliance reporting. PowerSchool (taken private by Bain Capital for $5.6 billion in 2024) dominates this market, alongside competitors like Infinite Campus, Skyward (acquired by PowerSchool), and Tyler Technologies.

Learning management systems (LMS) for K-12 include Canvas (Instructure, acquired by Thoma Bravo), Google Classroom, and Schoology (now part of PowerSchool). The LMS market stabilised after the pandemic-driven surge, with growth returning to more sustainable levels.

Assessment and testing platforms serve both formative and summative assessment needs. Renaissance Learning (STAR assessments), NWEA (MAP assessments), and Curriculum Associates (i-Ready) are major players.

District Procurement Cycles

K-12 EdTech M&A is uniquely influenced by school district procurement cycles. Districts typically make major curriculum and technology adoption decisions on 3-7 year cycles, with purchasing concentrated in spring and summer for the following school year. State-level textbook and curriculum adoption processes further structure the market, with some states conducting centralised reviews and approvals.

The ESSER cliff has added complexity to these cycles. The Elementary and Secondary School Emergency Relief (ESSER) programme provided approximately $190 billion in federal funding to U.S. schools between 2020 and 2024. This funding fuelled a surge in EdTech purchasing that many companies built their growth trajectories around. With ESSER funds now largely expired, districts are reverting to base budgets, creating a reset in the market that is affecting both company performance and M&A valuations.

M&A Activity and Deal Flow

The IXL Learning Acquisition Machine

IXL Learning has been the most prolific acquirer in K-12 EdTech, executing a steady stream of deals that have built a comprehensive education platform:

• Carson Dellosa Education (August 2024): a publisher of classroom materials and supplies, adding physical educational products to IXL's primarily digital portfolio.
• Dictionary.com and Thesaurus.com (April 2024): reference platforms with over 40 million annual visitors and 1.8 billion word searches per year, extending IXL's language and literacy resources.
• Previous acquisitions include Vocabulary.com, Rosetta Stone (including Lexia Learning), and other language-focused platforms.

IXL's strategy centres on building a comprehensive ecosystem of literacy and learning resources, combining adaptive digital instruction with reference tools, curriculum materials, and assessment capabilities. The company's willingness to acquire both digital and physical education assets distinguishes it from purely software-focused acquirers.

95 Percent Group's Literacy Roll-Up

95 Percent Group, backed by Leeds Equity Partners, has executed a focused buy-and-build strategy centred on Science of Reading-aligned literacy instruction:

• All About Learning Press (September 2025): a provider of structured, multisensory literacy programmes (All About Reading and All About Spelling) with a strong presence in the homeschool market. This acquisition expanded 95 Percent Group's reach beyond traditional school districts.
• Sortegories (April 2024): a digital literacy practice tool for grades preK-8, integrated into the One95 Literacy Platform.
• Tools 4 Reading: resources and professional learning tools for implementing structured literacy instruction.
• Hill Reading Achievement Program: an earlier acquisition extending the company's literacy intervention offerings.

This acquisition pattern demonstrates the PE-backed platform strategy in K-12 literacy: acquire a strong core product, then systematically add complementary curricula, assessment tools, and digital platforms to create a comprehensive literacy solution.

Other Notable Transactions

Heggerty acquired Literably in 2024, bringing a digital literacy assessment platform into its phonemic awareness curriculum. Literably's platform, which has assessed over 500,000 students, provides running record assessments aligned with the Science of Reading framework. This acquisition exemplifies the trend of curriculum companies adding assessment capabilities to create more complete literacy solutions.

Tal Education Group acquired Epic! Kids for $95 million in Q2 2025. Epic!, a digital reading platform for children, provides access to a library of over 40,000 books and educational content. The acquisition by a Chinese education company reflects international buyer interest in U.S. K-12 content platforms.

Newsela acquired Generation Genius in February 2025, adding K-8 science and math educational streaming content to its instructional content platform.

Imagine Learning acquired CueThink in June 2024, bringing AI-driven critical thinking tools for mathematics into its curriculum platform.

K12 Coalition acquired Keys to Literacy and Professional Development Institute, strengthening its educator support solutions and professional development offerings.

Bain Capital's $5.6 billion take-private of PowerSchool in 2024 was the largest K-12 EdTech transaction, reflecting the PE market's confidence in the durability of student information system revenue.

Francisco Partners and Other PE Activity

Francisco Partners invested in TCI (Teachers' Curriculum Institute), a provider of inquiry-based social studies and science curricula, signalling PE interest in core curriculum companies beyond literacy.

The broader pattern of PE involvement in K-12 EdTech has intensified, with firms such as Leeds Equity Partners (95 Percent Group), Bain Capital (PowerSchool), Thoma Bravo (Instructure/Canvas), and Vista Equity Partners all maintaining active positions in the sector.

Valuation Benchmarks

K-12 EdTech Multiples in the Post-ESSER Era

The ESSER cliff has meaningfully impacted K-12 EdTech valuations. According to the RL Hulett Q2 2025 report, the median EV/Revenue multiple for strategic education deals dropped to 0.7x in Q2 2025, down from 2.0x in 2024. This dramatic compression reflects the market's recalibration as ESSER-fuelled growth normalises.

However, this aggregate figure masks significant variation. Companies with sustainable, non-ESSER-dependent revenue streams are maintaining much healthier valuations:

Company Type	EV/Revenue (2025)	EV/EBITDA (2025)	Key Factor
SIS/Infrastructure (Recurring)	4x-8x	15x-25x	Mission-critical, high retention
Science of Reading Curriculum	3x-6x	12x-20x	Mandate-driven demand
Assessment Platforms	3x-5x	12x-18x	Recurring, data-driven
Supplemental EdTech	1x-3x	8x-15x	ESSER exposure, discretionary
LMS Platforms	3x-5x	12x-20x	Post-pandemic stabilisation

Sources: RL Hulett Q2 2025 Education and Training M&A Update; Jackim Woods EdTech M&A Analysis; SaaS Capital. Ranges represent estimates; significant variation exists based on growth, retention, and ESSER dependency.

The Jackim Woods analysis noted that small and medium-sized EdTech companies are returning to pre-COVID valuation levels of 2-3x annual recurring revenue, a significant reset from the 5-10x multiples seen during the ESSER-driven boom.

Factors driving premium K-12 EdTech valuations include:

Mandate-driven demand. Companies whose products are required by state legislation (Science of Reading curricula, approved assessment tools, mandated SIS platforms) command premium valuations because their demand is structurally supported rather than discretionary.

Recurring revenue quality. True SaaS subscription revenue with annual or multi-year contracts is valued at a significant premium over per-pupil licensing, one-time curriculum sales, or professional development revenue.

ESSER independence. Companies that can demonstrate their growth trajectory is not dependent on ESSER funding, or that have successfully transitioned from ESSER to sustainable district budget funding, are valued meaningfully higher.

Customer retention and expansion. Net revenue retention above 110% signals that a company is expanding within existing districts, which is particularly valuable given the high cost of new district acquisition in K-12.

Key Acquirer Profiles

Strategic Buyers

IXL Learning is the most active strategic acquirer in K-12 literacy and language education. Its acquisition strategy focuses on building a comprehensive ecosystem of learning resources, spanning adaptive software, reference tools, physical materials, and assessment. IXL targets companies with strong content, established user bases, and alignment with its literacy-focused mission.

PowerSchool (Bain Capital), as the dominant SIS provider, is positioned to acquire complementary K-12 software in areas such as communications, analytics, special education management, and assessment. Its $5.6 billion take-private provides significant capital for acquisitions.

Curriculum Associates, Amplify, and Houghton Mifflin Harcourt (now Veritas Capital-backed) are established curriculum publishers that may pursue acquisitions to strengthen their digital offerings and Science of Reading alignment.

Newsela and Imagine Learning have demonstrated acquisition appetites and may continue building their content and curriculum platforms through M&A.

Financial Sponsors

Leeds Equity Partners is the most focused PE investor in K-12 EdTech, with its 95 Percent Group investment serving as a platform for literacy-focused acquisitions. Leeds has deep sector expertise and a track record of building education platforms through buy-and-build strategies.

Bain Capital (PowerSchool), Thoma Bravo (Instructure), Vista Equity Partners, and Francisco Partners (TCI) all maintain active K-12 EdTech portfolios and could pursue additional platform or add-on acquisitions.

Veritas Capital, which acquired Houghton Mifflin Harcourt's education business, has significant exposure to K-12 curriculum and could pursue acquisitions to strengthen its digital and Science of Reading offerings.

Mid-market PE firms are increasingly interested in profitable K-12 EdTech companies with $5-30 million in ARR, particularly those with Science of Reading-aligned products and evidence of mandate-driven adoption.

Consolidation Drivers

The Science of Reading Mandate Wave

The single most powerful consolidation driver in K-12 EdTech is the Science of Reading legislative movement. With over 40 states now requiring evidence-based reading instruction, districts across the country are replacing legacy curricula with structured literacy programmes. This creates a massive, time-bound procurement cycle that favours companies with approved, evidence-based products.

For acquirers, this mandate wave creates urgency: companies that assemble comprehensive Science of Reading solutions (combining core curriculum, intervention, assessment, and professional development) can capture disproportionate market share during the transition period. This is precisely the strategy being executed by 95 Percent Group and IXL.

The ESSER Cliff and Market Reset

The expiration of ESSER funding has created a bifurcated market. Companies that built their growth on one-time federal funding are experiencing revenue declines and compressed valuations. Companies with sustainable, recurring revenue tied to ongoing district needs are maintaining their growth trajectories.

For M&A, this bifurcation creates opportunities. Acquirers can purchase ESSER-impacted companies at attractive valuations, retaining the core product and customer base while restructuring the business for post-ESSER sustainability. This dynamic is driving PE interest in the sector.

Platform Consolidation

Districts increasingly prefer to purchase from fewer, larger vendors that can provide comprehensive solutions. This drives consolidation as companies seek to build platforms that span curriculum, assessment, professional development, and data analytics. The 95 Percent Group and IXL acquisition strategies both reflect this platform dynamic.

AI Integration

The integration of AI into K-12 education products is creating new value and new acquisition targets. Companies with AI-driven adaptive learning, automated assessment, personalised intervention recommendations, and intelligent tutoring capabilities are attracting buyer interest. Imagine Learning's acquisition of CueThink (AI-driven maths tools) exemplifies this trend.

What This Means for Founders

If you are a founder of a K-12 EdTech company, the current market environment requires careful strategic thinking:

Assess your ESSER exposure honestly. Acquirers will scrutinise your revenue to determine how much is funded by one-time federal grants versus sustainable district budgets. If you have high ESSER dependency, consider strategies to demonstrate transition to recurring, base-budget funding before going to market.

Science of Reading alignment is a premium factor. If your product is aligned with structured literacy and the Science of Reading, ensure this is clearly documented with evidence of efficacy, state adoption approvals, and adoption by districts implementing mandated changes. This alignment significantly enhances your valuation.

Build for the platform buyer. Consider how your product fits within the broader literacy or EdTech ecosystem. Companies that can serve as add-on acquisitions for platforms like 95 Percent Group, IXL, or PowerSchool (filling a gap in curriculum, assessment, or professional development) may achieve premium valuations through strategic fit.

Demonstrate retention in a compressed budget environment. The strongest signal you can send to acquirers is that districts are retaining your product even as ESSER funds expire. High renewal rates in 2024-25 (post-ESSER) are far more valuable than peak ESSER-funded revenue figures.

Timing considerations. The Science of Reading mandate wave is creating a time-bound window of heightened acquisition interest in literacy-focused companies. As more states complete their curriculum transitions, the urgency for acquirers will diminish. Founders of literacy-focused companies may benefit from acting sooner rather than later.

The Path Forward for EdTech Founders

K-12 EdTech M&A in 2025-26 is defined by the tension between the ESSER cliff and the Science of Reading mandate wave. Companies positioned on the right side of both dynamics -- sustainable revenue models aligned with mandated curriculum changes -- are commanding premium valuations and attracting intense buyer interest.

The sector offers diverse exit paths: strategic acquisitions by platform builders like IXL and 95 Percent Group, PE-backed buy-and-build strategies, and take-private transactions for larger companies. Valuations have reset from ESSER-era peaks, but companies with strong fundamentals, evidence-based products, and mandate-driven demand continue to achieve meaningful outcomes.

For founders, the message is clear: the market rewards evidence, sustainability, and strategic positioning. Companies that can demonstrate their value in a post-ESSER world, particularly those aligned with the Science of Reading, will find an active and receptive buyer market. Those that cannot will face a more challenging environment. Preparation, honest assessment of your position, and experienced advisory support will make the difference.