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August 29, 2018

Graduation Day for The Learning Experience

children in a classroom

With back-to-school in the works for many families, we’d like to share some key learnings from our time working with one of our favorite schools, The Learning Experience (TLE). Earlier this summer, Golden Gate Capital acquired TLE. We’re thrilled for their team and celebrate their success with them.

TLE operates and franchises early childhood academies. They provide a technology-enabled, curriculum-first education to more than 20,000 children across almost 250 locations nationwide. The company has been and continues to be, the fastest-growing early education franchisor in the US.

TLE resembled many of our growth equity investments when we first met their team in 2014. They were founder-owned, profitable, and growing strongly. As we developed a strong relationship with co-founder and CEO Richard Weissman over more than a year, we matched our firm’s capabilities within recruiting, M&A, strategy development, and marketing to TLE’s growth goals and needs.

Their growth and our eventual successful sale came from a number of areas, including the following salient factors.

Riding Macro Tailwinds

TLE sits at the enviable intersection of education and franchising, with both large industries experiencing steady growth. Private spending on early education is growing by ~3% in the US, as parents increasingly prioritize a high-end pre-school education for their children. At the same time, franchising is a $750 billion industry, growing at 6% overall and employing more than 8 million Americans. Prospective franchisees are seeing the same opportunity for TLE as we do—a leading brand offering a differentiated educational experience. It comes as no surprise that the number of TLE locations has more than doubled during our investment.

Delivering a Differentiated Value Proposition

The US consumer is an increasingly discerning one. Amid the plethora of online review sites and social platforms, TLE has distinguished itself. Richard and team developed a market-leading technology-enabled curriculum, LEAP Interactive. Paired with other TLE tools such as their Parent Safe N Secure app and online “edutainment” BubblesU, the curriculum helped differentiate the company from other education centers. We saw this competitive advantage back in 2014, and tens of thousands of families who have entrusted the care and early education of their children to TLE no doubt share our view.

Building a World-Class Management Team

Early in our investment, we identified an opportunity to enhance the TLE team, starting by hiring President and COO Andrew Alfano. Andrew, who came to TLE from Starbucks, has assembled a high-caliber team of real estate, operations, and marketing executives focused on taking the company to the next level. The team has delivered in spades, increasing the pace of openings by nearly 300% during our hold.

We have a great relationship with Richard, Andrew, and the team at TLE, and wish them all the best with their new partner in Golden Gate. With a well-built team delivering a differentiated product in a strong market, the prospects for TLE are terrific.