Coding class platform Codecademy has sold to Skillsoft for $525 million, in a mix of stock and cash, marking yet another instance of consolidation in the educational technology sector. The sale comes nearly a year after Codecademy raised a $40 million Series D and pivoted its consumer-focused product to serve more enterprise customers.
Then CEO and founder Zach Sims said that the money would be used to acquire businesses, build out India operations and scale its budding enterprise business. Today, Sims said that nothing’s changed, but realized that combining forces with Skillsoft would help him scale “Codecademy even faster than we’d be able to independently.” The company even beat out a slew of other offers, he said.
“I think the future of a lot of education companies is one that mixes consumer and education, and I think here we’re bringing together the leader in consumer technology education with the leader in enterprise education to create a new full-stack leader,” he said. “That was just something that other companies couldn’t compete with.”
Sims declined to share the most recent valuation of Codecademy. As of now, the deal did not lead to any layoffs.
Skillsoft is a decades-old tech business that has made its name by building software and educational programming for the enterprise and corporate sector. The business went public earlier this year through a SPAC with Churchil Capital. While the exit was a rare debut for an education-focused company, it came after a stint of turbulence. Skillsoft filed for bankruptcy in June 2020, and in two months, restructured its way out of it “on an expedited basis.”
Today, Skillsoft is a massive player in B2B education, sporting 75% of the Fortune 1000 as customers of its products, which broadly span the online learning, training and talent management space. Codecademy, meanwhile, has claimed it has been cash-flow positive for years. Most recently, the business reported $50 million in annual recurring revenue, a figure that was doubling since 2018.
The sale follows a common arc we see in consumer-focused edtech companies: grow a strong user base, and eventually use that name recognition to land enterprise deals (and stickier customers). Udemy and Coursera have led the charge, more recently joined by companies like MasterClass and Outschool. Even Duolingo, one of the most popular consumer education businesses, is building out an enterprise arm with partnerships and schools.
In Codecademy’s case, the business has long helped students and employees learn how to code in a more interactive environment. Its shift to the enterprise was pretty noncontroversial, as it sold its same service to businesses that recently decided they want to train and reskill their employees. In the first year of its launch, Codecademy landed 600 paying clients, half of which were non-technology companies like banks, consulting firms and small businesses.
By joining forces with Skillsoft, Codecademy can now take advantage of its owner’s B2B presence and capabilities.
“We want to build a truly end-to-end technical learning platform that can support any person throughout the course of their entire career — whether they’re learning individually or inside of a company,” Sims said. The platforms together will serve a base of 85 million learners.
Codecademy is the latest and most expensive addition to Skillsoft’s acquisition spree: Since its public debut, the company bought Pluma, an executive coaching platform and Global Knowledge, an IT and skills development platform.