Dive Brief:

• Instructure, the education software company that makes learning management system Canvas, is exploring potential alternatives to being a publicly traded company that could include a sale.
• The news was first reported by Bloomberg on Wednesday and confirmed in a company announcement Thursday. Instructure said it has received interest from "multiple third parties."
• Investor pressure spurred the decision, according to Bloomberg, and potential outcomes include continuing as a public company, going private or being purchased.

Dive Insight:

Investor pressure has been a factor for Instructure, in part pushing it to put more emphasis on Canvas, ed tech analyst and consultant Phil Hill noted in a blog post about the news. "Instructure management has made it a point to say that they are increasing investment in Canvas," he writes, "but today's news puts even more emphasis on that need."

Exploring a sale or other major strategic change doesn't necessarily mean anything will happen. Hill points out that Blackboard undertook a similar process in 2011, which resulted in it going private in a $1.64 billion sale to a private equity firm. It considered another sale a few years later. 

Canvas recently surpassed Blackboard in North America both in the number of campuses using its LMS as well as the number of students it serves.

Investors are showing an interest in education, particularly in the technology companies serving the sector. Ed tech companies in the U.S. raised $1.45 billion in 2018, according to EdSurge. The year tied with 2015 for the most raised, though across one-third fewer deals.

The trend around funding companies that provide services to colleges and universities "is in full swing right now," Trace Urdan, managing director at Tyton Partners, an investment banking and consulting firm, told Education Dive in June.

Among companies to attract investor interest are Upswing, which provides chatbot services, and ReUp Education, which helps institutions reenroll students that left the school before they earned a credential. LMS providers are integrating additional technology into their products. For example, Blackboard recently added a chatbot for student support and Canvas now offers a digital portfolio that students can continue to access after graduation.

Tapping the market for employer education is also an area that has caught the attention of investors. The Rise Fund, the impact investment arm of TPG, is working from a $2.1 billion fund to support the launch of InStride with Arizona State University. The pair work with a global network of companies and colleges to offer employer-subsidized education to workers.

Guild Education has also attracted investors for its work with companies to provide employees tuition benefits in partnership with colleges and universities. Its latest raise, a Series D round bringing in $157 million, pushed its valuation to $1 billion.

And 2U is facing pressure from investors to consider strategic alternatives, which includes a sale, Bloomberg reported. The investor — which is also reportedly involved in the situation at Instructure —​ says the online program manager could be attractive to a private equity firm or ed tech company, according to the publication.

In its statement, Instructure said it hasn't set a timeline for the process of exploring the proposed strategic alternatives.