has agreed to acquire U.S.-based educational technology company Codecademy for $ 525 million in cash and stock, the companies said on Wednesday, the latest bet on consolidating the online learning market.
The closely organized Codecademy offers free online basic computer coding courses in areas such as programming, data science, and cybersecurity. The New York-based startup’s services also include more in-depth paid offerings. In February, Codecademy raised $ 40 million in new funding, seeking to expand into markets such as India, where a high percentage of people pursue engineering studies.
Boston-based Skillsoft offers software to its clients that offers training and courses in leadership development, workplace harassment prevention, and courses to qualify as a systems engineer. Its library of 180,000 courses, books and videos is offered in 29 languages and its customers include the US Air Force, Siemens AG
and United Parcel Service Inc.
Driven by the pandemic, employers are increasingly turning to digital training courses as a way to retain and retrain workers in the office or at home, a trend that is expected to continue beyond the virus.
For Skillsoft, the deal bolsters its technical skills offerings by adding expertise in programming languages for developers and other types of tech workers.
“If you look at the skills gap, it’s most acute in technology,” said Jeffrey Tarr, CEO of Skillsoft.
Codecademy chief executive Zach Sims said the sale would give him access to more customers. The deal “is really helping to grow Codecademy across all businesses much faster than we could independently,” he said.
Skillsoft’s past struggles demonstrate the risks of the rapidly growing online education market. The company filed for bankruptcy in June 2020, penalized by a combination of excessive debt and fierce competition from companies offering free access to similar services.
He got out of bankruptcy protection in August of that year, wiping out $ 1.5 billion in debt. It went public in June 2021 in New York City through a merger with specialist acquisition firm Churchill Capital Corp II.
Skillsoft became over-leveraged by its former private equity owners and these issues were addressed by recapitalizing the company and putting in place a new management team and board of directors, said Skillsoft’s Mr Tarr. He joined the company as part of Skillsoft’s merger with Churchill.
Skillsoft’s acquisition of Codecademy is its third and largest acquisition since joining PSPC.
The deal brings together two portfolio investments from Amsterdam-based Prosus NV, the largest shareholder in Chinese internet and video game giant Tencent Holdings Ltd.
Prosus is one of the world’s largest technology investors, betting across the globe on a range of online platforms in the areas of food delivery, classifieds, fintech and educational technology. It made its biggest acquisition to date in August, acquiring India’s payments platform BillDesk for $ 4.7 billion.
Prosus is Skillsoft’s largest shareholder, with a 38% stake, according to FactSet. Naspers Ltd., which controls Prosus, has an approximate 12% stake in Udemy Inc., a Nasdaq-listed e-learning operator that provides content to the Skillsoft platform. Codecademy also counts Prosus as an investor.
Prosus owns a stake in Indian electronics technology operator Byju, which has been valued at $ 16.5 billion. In June, Prosus struck a $ 1.8 billion deal to acquire Stack Overflow, an online community for software developers.
Write to Ben Dummett at [email protected]
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