Codecademy Acquired by Skillsoft for $525M
Codecademy Acquired by Skillsoft for $525 Million
Codecademy, a prominent online coding education platform, has been sold to Skillsoft for $525 million. The transaction involves a combination of both stock and cash, representing further consolidation within the rapidly evolving educational technology landscape.
This sale occurs approximately one year following Codecademy’s $40 million Series D funding round. At that time, the company strategically shifted its focus to prioritize serving enterprise-level clients.
Strategic Alignment and Growth
Former CEO and founder, Zach Sims, initially intended the funding to facilitate acquisitions, expand operations in India, and bolster the company’s emerging enterprise business. Sims now states that while these goals remain unchanged, a partnership with Skillsoft will accelerate Codecademy’s growth trajectory.
He indicated that Codecademy received multiple offers, but ultimately chose Skillsoft due to the synergistic potential of the two organizations.
“The convergence of consumer and enterprise education represents the future for many companies in this space,” Sims explained. “This union brings together the leading provider of consumer technology education with the foremost enterprise education provider, creating a comprehensive, full-stack leader.”
Sims refrained from disclosing Codecademy’s most recent valuation. Importantly, this deal has not resulted in any workforce reductions.
Skillsoft’s Position and Recent History
Skillsoft is a long-established technology company specializing in the development of software and educational programs for businesses and corporate entities. The company became publicly traded earlier this year through a Special Purpose Acquisition Company (SPAC) merger with Churchill Capital.
Despite a somewhat turbulent period, including a bankruptcy filing in June 2020, Skillsoft successfully restructured its finances and emerged from bankruptcy within two months.
Currently, Skillsoft serves approximately 75% of the Fortune 1000 companies, offering a broad range of solutions in online learning, training, and talent management.
Financial Performance and Market Trends
Codecademy has reportedly maintained cash-flow positivity for several years. The company’s annual recurring revenue (ARR) recently reached $50 million, demonstrating a doubling of revenue since 2018.
This acquisition mirrors a common pattern observed in consumer-focused edtech companies: building a substantial user base and then leveraging that brand recognition to secure enterprise contracts, which typically offer more stable revenue streams.
Companies like Udemy, Coursera, MasterClass, and Outschool have followed similar paths. Even Duolingo, a highly popular consumer education platform, is actively expanding its enterprise offerings through strategic partnerships with schools.
Codecademy’s Enterprise Transition
Codecademy’s transition to serving enterprise clients has been seamless, as it offers the same interactive coding education service to businesses seeking to train and upskill their employees.
Within its first year of targeting enterprise customers, Codecademy secured 600 paying clients, with half originating from non-technology sectors such as banking, consulting firms, and small businesses.
The integration with Skillsoft will allow Codecademy to capitalize on its new owner’s established B2B infrastructure and capabilities.
Future Vision and Combined Reach
“Our aim is to create a complete end-to-end technical learning platform that supports individuals throughout their entire careers, whether they are learning independently or as part of an organization,” Sims stated.
The combined platforms will now serve a learner base of 85 million individuals.
This acquisition represents the latest in a series of strategic purchases by Skillsoft since its public debut, including Pluma, an executive coaching platform, and Global Knowledge, an IT and skills development platform.
