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SoHo startup teaching millions to code online (Mayor Bloomberg included) acquired for $525M – Crain's New York Business


Codecademy—which rose to sudden prominence in 2012 when Mayor Michael Bloomberg said he’d use its platform to learn to code—has been acquired in a $525 million deal.
The buyer is Skillsoft, a publicly traded company in Boston that similarly provides online-based learning.
SoHo’s Codecademy has more than 40 million registered users learning 14 programming languages through its platform, according to the news release that announced the deal Wednesday morning. The startup recently has been investing in its Codecademy for Business offering, tackling an enterprise market where Skillsoft specializes.
“This allows us to realize those ambitions significantly faster and access tens of thousands of businesses with Skillsoft’s help,” said Zach Sims, co-founder and CEO of Codecademy. “This is realizing we can build something better together than on our own.”
Codecademy teaches coding through self-guided lessons with quizzes and other challenges. Most classes are free; the company offers a $20 premium option. In February the firm closed a $40 million Series D funding round, led by education-focused investment firm Owl Ventures.
The company took on the extra investment to expand its Codecademy for Business, which since last year has provided online skills training for workers at Facebook, Google, IBM and other companies.
Skillsoft specializes in online courses for management as well as sexual harassment prevention training, though it does offer some technical-skills courses as well. Its customers include approximately 75% of the Fortune 1000, according to the announcement.
The deal will be funded by Skillsoft using 40% cash and 60% equity, the announcement said. The company went public through a blank-check merger deal in June and has a market cap of $1.3 billion. Sims declined to disclose Codecademy’s private market valuation but said its investors “did very well” in the transaction.
Sims was 21 when he launched Codecademy a decade ago along with Ryan Bubinski. The firm secured a $2.5 million seed investment led by Fred Wilson’s Union Square Ventures in October 2011.
A couple of months after that, Codecademy launched a marketing campaign, challenging Americans to learn a coding language in 2012. Bloomberg jumped on board, tweeting a link to Codecademy’s site and declaring his “New Year’s resolution is to learn to code with Codecademy in 2012!” A host of news outlets jumped to cover the pledge, including CNN and the BBC. Boris Johnson, then London mayor, said he’d consider taking the course if he was re-elected.
More than 400,000 people signed up in the three months after Bloomberg’s tweet.
The viral campaign provided a boost the firm has been able to capitalize on, raising more than $80 million from investors before Wednesday’s deal.
Codecademy has about 220 employees and is expected to maintain its presence in New York, Sims said, though he added many workers are operating remotely full time.
“Skillsoft is acquiring Codecademy to invest deeply in the product we have built,” Sims said. “We expect to only grow it from here.”
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