Pluralsight Continues Its Acquisition Spree, Dropping $36 Million On Code School

An arms race is brewing in the professional training market.

Pluralsight Continues Its Acquisition Spree, Dropping $36 Million On Code School

Flush with cash and eager to consolidate, online education startups are racing one another to grow via acquisition as the market for professional training shifts to digital. The latest move in this sprint to capture valuable subscription customers: Pluralsight has snapped up Code School, one of the web’s top “learn to code” destinations, for $36 million.

“Code School brings to us an interactive platform that is a totally different style of learning than what we provide today,” says Pluralsight president and CEO Aaron Skonnard. His company’s existing courses are largely video-based and designed for technology professionals, with topics ranging from cryptography fundamentals to data visualization. Code School will bring entry-level programming topics into the mix, along with exercise-based lessons.

Aaron SkonnardPhoto: via Pluralsight

Founded in 2004 as an offline training company, Pluralsight shifted to online-only courses in 2007. “We saw an opportunity to create value for the enterprise customer by consolidating the content on the market under one SKU, one price point,” Skonnard says.

That focus on enterprise has led to a 65%-35% revenue split between corporate and individual customers, who pay a monthly subscription for access to Pluralsight’s full course library. Competitor Lynda.com, in contrast, leans more heavily on individual subscribers, with a 45%-55% revenue split.


Both companies have raised massive venture rounds in the last six months: first Pluralsight, which banked $135 million last August, and more recently Lynda, which raised $186 million in mid-January. Lynda has signaled its plans to go shopping with the new cash; CEO Eric Robison told VentureBeat that he has sent letters of intent to three targets, and is close to a signed deal with a fourth.

Ryan Hinkle of Insight Venture Partners, which has poured tens of millions into Pluralsight, shrugs off Lynda as a threat, arguing that Pluralsight is after a different kind of customer. “We really focus on the technology professional,” Hinkle says. “It’s about replacing the stack of books that used to sit on every developer’s shelves with content that keeps you at the cutting edge.”

With the company’s first four acquisitions, “the strategy was really to use the acquisition as an accelerator” around course content, Pluralsight’s Skonnard says. Over the last 18 months Pluralsight has closed deals with Tekpub (undisclosed), PeepCode (undisclosed), TrainSignal ($23.6 million), and Digital-Tutors ($45 million) in rapid succession, rounding out the company’s course library with learning tracks for IT infrastructure and digital design. To add assessment capabilities, Pluralsight nabbed startup Smarterer for $75 million.


As for Code School, Skonnard says he also scoped out competitors Codecademy and Treehouse. But Codecademy lacked instructional support and Treehouse lacked compelling interactive exercises. “Code School sits right in the middle: Lots of videos, code challenges. Their interface does a really good job of walking you through it,” he says, noting the company’s high production values and focused portfolio of 50 courses. Plus, Code School is making money, thanks to a profitable subscription base.

And he’s not quite done: “There are probably a few more deals in front of us that are content-focused,” he says. “This year we’re also going to be spending a lot of time and energy on product integration and improvements, but acquisitions will always be part of our content growth strategy.”

With Lynda likely gunning for similar targets, that strategy will face its first big test in the months ahead.

About the author

Staff writer Ainsley (O'Connell) Harris covers the business of technology with a focus on financial services and education. Follow her on Twitter at @ainsleyoc.

More

Video