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    Innovation Village | Technology, Product Reviews, Business
    You are at:Home»Coding»Codecademy Raises $40 Million In New Capital
    Codeacademy

    Codecademy Raises $40 Million In New Capital

    1
    By Tajudeen Adegbenro on March 5, 2021 Coding, Funding

    Codecademy, an online coding school has raised a new round of funding, led by Owl Ventures and with support from Proses and Union Square Ventures, after going four years without raising any funds. The company has been teaching students and workers how to code in an immersive environment.

    The startup joins the ranks of ClassDojo, CourseHero, Quizlet, and Udacity as the newest edtech company to raise money with years without it. However, founder Zach Sims, who founded Codecademy as a Columbia student in 2011, claims that its rapid growth and need for new funding aren’t due to a pandemic.

    “A lot of that edtech bump came in K-12 and college solutions, or leisure educational things like MasterClass,” Sims said. “Ours was less pandemic-induced.”

    The company currently generates $50 million in annual recurring sales by teaching students and workers how to code in an immersive environment. This figure is consistent with Codecademy’s regular growth trend, which has seen the company double in size every year since 2018. There are still some aspects where the company can improve. It took four years for Codecademy to hit 100,000 users, but they gained 50,000 more registered subscribers in their fifth year alone.

    Investors are searching for stable, historical development, not just rapid growth, as Codecademy’s funding shows. For years, the company has been cash-flow optimistic, with $20 million of its $30 million Series C funding remaining in the bank.

    Even so, raising funds requires money in terms of equity for the founders and the company. But why lift since you still have cash available and aren’t having trouble keeping up with demand?

    According to Sims, the new funds would be used to acquire companies, expand globally in India and other nations, and recruit. He still wants to “invest heavily” in Codecademy For business, a paid product introduced in the pandemic’s aftermath. The product is Codecademy’s first foray into offering coding lessons to businesses, a departure from its traditional direct-to-consumer model.

    Last year, Codecademy For Business was launched in beta and quickly expanded to 600 paying customers. Non-technology organizations, such as insurers, consulting firms, and small businesses, account for half of the customers who choose to train their staff in digital literacy and tech-specific programming. Sims claims that the product was developed in response to consumer demand. It capitalizes on what investors see as growing awareness among businesses that workers must be trained and reskilled.

    The improvement is similar to Udemy’s recent gains. The reskilling firm has both a company and a consumer product, but the former generates more revenue. Last month, we reported that Udemy for Business had 7,000 customers and generated about $200 million in annual revenue.

    According to Sims, the company’s enterprise service, which competes with Udemy and Coursera, necessitates upfront research and development “before it begins to pay itself back.” Building a bottoms-up enterprise product powered by tens of millions of Codecademy users, he believes, would be the company’s biggest opportunity and most significant challenge. Codecademy’s ultimate aim is to have a 50/50 split between its customer and enterprise businesses.

    “The number one biggest differentiator has been interactivity,” Sims said. “Everyone is tired of Zoom, and our thesis since the beginning is that video is not the best way to learn and that learning by doing is.”

    Codecademy’s development appears established and unicorn-like, despite the startup’s refusal to reveal its valuation. The company is expanding its revenue streams, adding violent cash to its bank account, and even hiring a Chegg CFO. Initial public offerings (IPOs) are on the rise.

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    Tajudeen Adegbenro

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    1. Pingback: Skillsoft acquires ed-tech rival Codecademy for $525 million - Innovation Village | Technology, Product Reviews, Business

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