Investment Opportunity in Project Escuela

Investment Opportunity in Project Escuela

One. Executive Summary

The objective of this memo is to brief the Investment Committee of a potential investment in "Escuela" (project name), also referred to herein as the "Company."

A. The Company. Escuela is a market-leading software-as-a-service (Saas) business marketed to K-twelve school districts in the US and serving English Language Learners (ELLs), the fastest growing segment of the US K-twelve student population. The Company has two core offerings today: (one) Escuela Platform ("Platform") which is a software platform used by school districts to manager their entire ELL program; (two) Escuela Strategies ("Strategies") which is a set of digital resources and tools used by K-twelve teachers to plan and differentiate instruction for ELLs in the classroom. In addition, for the fall of twenty twenty, the Company is launching a third product line, Escuela Math ("Math") which will be a curriculum product designed to help ELLs in grades six through nine to learn math. The Company was founded in twenty eleven by co-founders Jordan Meranus (CEO) and Teddy Rice (President) with a vision to bridge the achievement gap for ELL students in the classroom and enable them to achieve their highest aspirations. Escuela is headquartered in Boston, Massachusetts.

B. Deal Opportunity. Lumos has the opportunity to lead a fourteen million dollar Series B-one growth round with a nine to ten million dollar investment at a ninety-nine million dollar pre-money valuation, representing three point eight times twenty twenty estimated bookings or four point four times twenty twenty estimated revenue.

The Company had initially planned on raising up to ten million dollars only from insiders in an extension to the Series B raised in late twenty seventeen. However, the Company's long term relationship with Lumos, and ongoing discussions between management and Lumos (starting since Lumos' founding in twenty nineteen) on the strategic value we could bring - particularly in terms of prospective M and A, international expansion, and our expertise in growth strategy (e.g., product, go-to-market, etc.) in the sector - have created the opportunity for Lumos to lead this round in a proprietary transaction with participation from existing insiders (all of whom have lengthy pre-existing relationships with Lumos), as the only new investor.

Victor has known President and Co-Founder Teddy Rice for sixteen years (since two thousand four when they were classmates in the MBA program at The Wharton School of the University of Pennsylvania) and has tracked the Company's progress since its founding. The full Investment Team has deep relationships with the Company's current investors: Emerson Collective, Reach Capital, ReThink Education, Chan Zuckerberg Initiative, and The Omidyar Network. Company has been a priority opportunity in Lumos' deal pipeline since mid-twenty nineteen. Existing investors' pro rata participation in this round will total as much as five million dollars, with several investors seeking to do super-pro rata investments.

Company Financials (Historical + Management Forecast)

C. Timing. The Lumos Investment Team has completed multiple diligence and process calls and in-person meetings to date since Lumos' founding in twenty nineteen and prior, and particularly over the last two months (see Section Seven). The Investment Team also had a full day in-person management meeting on site at the Company's headquarters in Boston, Massachusetts on March five with the key management and both co-founders. Full confirmatory diligence processes - financial, tax, regulatory, technology, market, and customer - have been completed by both the Investment Team and Lumos' service providers (see Section Eight). We anticipate closing the investment before the end of March twenty twenty.