Bain Capital Double Impact bets on the modern classroom with Meteor

'It's not just the physical environment, it's actually how you pull together the technology, the pedagogy and the physical environment to create a rich learning experience,' said Jacob Donnelly.

The need for accelerated school renovations, coupled with strong financing through municipal bonds, moved Bain Capital Double Impact to make a growth investment in Meteor Education earlier in March. Meteor is a designer of modern classrooms aimed at high-impact learning experiences for K-12 schools. Bain Capital Double Impact is the impact investing strategy of Boston-based Bain Capital.

Jacob Donnelly, a managing director on the Bain Capital Double Impact team, told PE Hub that there is a growing interest in improving learning environments in K-12 schools, which he described as a large and durable market.

Bain bought Meteor, which is headquartered in Gainesville, Florida, from Saw Mill Capital. The Briarcliff Manor, New York-based PE firm first invested in Meteor in 2017.

Founded in 1967, Meteor focuses on classroom designs, upgrading classroom furniture to suit modern learning environments and teacher training to support modern trends which in turn can lead to an engaging learning culture, the company said.

Jacob Donnelly, Bain Capital Double Impact

“We see long-term market share gain, very strong competitive positioning in this durable market. We are just excited about the growth prospects,” said Donnelly, adding that studies have shown that an improved learning environment adds to students’ success and confidence.

Bain’s investment will also support Meteor’s acquisition of Blankenship Associates, a Raleigh, North Carolina-headquartered creator of learning environments for K-12 schools.

This will lead to growth in three ways, Donnelly said. First, Blankenship’s acquisition will help Meteor with geographic expansion of its business, especially in places where it doesn’t have an existing footprint.

Secondly, Bain is looking forward to extending Meteor’s portfolio into STEM environments, a growing market that is supported by the desire to increase STEM learning in K-12 schools. “You can think of robotics labs, health science labs, vocational and career technical labs, these are all things that Meteor has done work with, but it’s just a growing market,” said Donnelly.

The third growth opportunity lies with expanding Meteor’s services, focusing on a professional development program that targets teachers to get the most out of the classroom.

“The combination of expanding our geography, moving into additional STEM-based career technical education and then deepening our services is really the thesis here,” he said.

In classrooms, Donnelly said technology, such as augmented reality and virtual reality, should be infused in classroom environments to enhance learning. “It’s not just the physical environment, it’s actually how you pull together the technology, the pedagogy and the physical environment to create a rich learning experience,” he said.

Meteor came to the conclusion that the class design, teacher proximity to the class and how students interact in small groups, optimize high trust, social interaction and flexible learning environment. “That designing takes into account the sort of best pedagogical practices,” he added.

This is was the missing link during the height of the pandemic when schools were shut to prevent the spread of the virus.

“In their classroom environment, students are making social connections that create trust, make them more engaged and want to go to school, build friends and learn from each other,” he said. “It has a very positive kind of snowballing effect versus during the pandemic, where you are sitting in front of your computer all by yourself and kind of lonely and isolated.”

Coming out of the pandemic, Donnelly said there is also a bipartisan desire to improve school districts. Even as the economic outlook remains challenging, Donnelly described the K-12 markets as durable largely because they are funded through municipal bonds.

One of the big deep dives that the firm did during the due diligence process was to look at the state of municipal bond financing in the country, specifically around K-12 education projects, and it turned out that 2022 was the largest year on record, with approximately $89 billion against $62 billion in 2020 and $71 billion in 2018, added Donnelly.

“What we are seeing, again coming out a pandemic, is that people are really unsatisfied with the conditions of their learning environments and want better options. Voters, Democrats and Republicans, approve bond issuances to upgrade and renovate their school districts.”