Codecademy’s entrepreneurial team, which is led by Zach Sims, is about to join Skillsoft with a focus on accelerating growth in Technology & Developer Business. This transaction is expected to be immediately and significantly accretive to revenue and bookings growth with substantial cross-selling opportunities

Skillsoft, a global leader in corporate digital learning, has just announced it entered into an agreement to acquire Codecademy, a leading online learning platform for technical skills, for approximately $525 million.

Codecademy is a popular learning platform that provides high-demand technical skills to around 40 million registered learners in almost every country worldwide. The platform offers interactive and self-paced courses in 14 programming languages across multiple domains like application development, data science, cloud, and cybersecurity. What is more, the Codecademy platform can rapidly expand to deliver new skills at scale, making it highly adaptable to the evolving technical needs of learners and their employers. Codecademy was founded in 2011 and is led by a proven entrepreneurial team that has built one of the most admired technical skills learning platforms in the industry. Jeffrey R. Tarr, Chief Executive Officer of Skillsoft, commented:

“Codecademy will significantly expand Skillsoft’s capabilities in the high-growth Tech & Dev segment. Strategic acquisitions are an important part of our growth strategy. We acquired virtual instructor-led training capabilities with Global Knowledge and coaching with Pluma earlier this year. With the addition of Codecademy’s innovative capabilities, we will create an even more immersive online learning experience. When we combine Skillsoft’s enterprise customer base of more than 12,000 corporate customers and over 46 million learners with Codecademy’s 40 million learners, sophisticated digital marketing capability and influential brand, we expect to unlock significant revenue synergies.”

The Codecademy team joins Skillsoft to help further build out the leading technical skills training solution for learners globally. Zach Sims, founder, and CEO of Codecademy, noted:

“Since our founding, Codecademy has been focused on empowering our learners to build inspiring careers in technology. We have helped tens of millions of people around the world learn new technology skills. Together with Skillsoft, we will have the opportunity to rapidly increase the size of our content library and scale Codecademy across the millions of learners and thousands of companies – including approximately 75% of the Fortune 1000 – that work with Skillsoft worldwide. With additional resources and opportunities to drive growth, we are excited to embark on this important next chapter.”

Here are some of the Strategic Rationale and Benefits of this acquisition:

  • Creates a Leading Technology & Developer Offering. Adding Codecademy’s expertise in 14 programming languages across multiple domains to Skillsoft’s existing technical skills offering will create a leader in the high-demand, high-growth Tech & Dev segment. In addition, the capability of the Codecademy platform to rapidly add new programming languages and technical skills at scale will further enhance Skillsoft’s ability to meet the evolving demands of learners worldwide as it helps organizations address the critical technical skills gap.
  • Expands Immersive Platform with New Ways of Learning. Skillsoft has already assembled an expansive set of learning options, including virtual instructor-led training, coaching, micro-videos, audio, books, boot camps, live events, assessments, and badges. Together with Codecademy’s interactive, self-paced courses and hands-on learning, Skillsoft will be able to deliver even more immersive experiences through its AI-driven platform, Percipio.
  • Creates Substantial Cross-Selling and Upselling Opportunities by Adding a Strong Brand and Powerful Digital Sales and Marketing Engine to Global Enterprise SalesForce. The acquisition will bring together Codecademy’s sophisticated direct-to-learner digital sales and marketing engine and Skillsoft’s enterprise sales organization, creating new opportunities to upsell and cross-sell across each company’s customer base, which is expected to drive customer growth and revenue synergies.
  • Expected to Be Significantly Accretive to Bookings and Revenue Growth Immediately Upon Closing. Codecademy is expected to deliver approximately $47 million in bookings and approximately $42 million in revenue for the calendar year ended December 31, 2021, up 23% and 31%, respectively, over the prior year. Codecademy is entirely a SaaS business and is expected to deliver gross margins of more than 85% in 2021 and be accretive to Skillsoft’s gross margin immediately upon closing. Codecademy is investing to fuel growth and, accordingly, is expected to generate a negative EBITDA of approximately $20 million in 2021. Skillsoft expects it will accelerate Codecademy’s growth in its first year of ownership and that the acquisition will be accretive to EBITDA over the long term.

The fiscal Year 2023 Outlook

Skillsoft reiterates its full-year fiscal 2022 outlook provided on December 14, 2021, with bookings in the range of $700 million to $720 million; adjusted revenue in the range of $685 million to $700 million; and adjusted EBITDA of approximately $165 million. The Company will provide a fiscal 2023 outlook, pro forma for the acquisition when it reports its fourth-quarter and full-year 2022 results.

Tags: , , , , , , , , , , , , , , , , , , , , , , ,
Nikoleta Yanakieva Editor at DevStyleR International