In July, Codecademy closed a $30 million Series C funding round led by Naspers Ventures. Existing investors Union Square Ventures, Flybridge Capital Partners, Index Ventures and Sir Richard Branson also participated in the round, which the company plans to use to localize its content, develop its platform, build its mobile presence and develop additional content.
Codecademy previously raised $12.5 million in funding from investors including Y Combinator, Kleiner Perkins Caufield and Byers, SV Angel, Yuri Milner, Thrive Capital, O’Reilly AlphaTech Ventures and Bowery Capital.
While they were students at Columbia University, Codecademy founders Zach Sims and Ryan Bubinski started teaching programming in student groups, finding these experiences more meaningful and effective than studying independently or in a classroom. They saw, as many professionals in the IT and training industries have also noted, a growing programming skills gap in the workforce, so in 2011, they launched Codecademy with the assistance of Y Combinator. In less than one year, they had 500,000 users.
Most of Codecademy’s programs are free, though the company recently launched Codecademy Pro, a $19.99/month subscription that includes a personalized learning plan, assessments, and live advising, along with the free online content. Expanding Codecademy Pro offerings is one of the goals Sims has said he would like to achieve with the company’s new funding.
The key to Codecademy’s appeal is a combination of its no-cost model and its engaging, participatory content style. According to Sims, “We wanted to motivate people and get them hooked so they learned for the sake of learning.”
For example, in 2012, Codecademy launched CodeYear, a New Year’s resolution challenge. 200,000 people, famously including Michael Bloomberg, signed up in the first week. As Fast Company pointed out soon after Codecademy launched, the courses’ gamified elements “actually work, because they’re pegged to actual accomplishments (‘Hey, I learned how to spawn a dialog box!’) and because, like any well-designed video game, the first few ‘levels’ are fast and easy enough to be fun without feeling like work.” An interactive, gamified learning system can make it easier to approach a potentially intimidating new skill like coding.
Codecademy investor Naspers Ventures was established by the international internet company Naspers in 2016 to invest in technology companies in high-growth markets. The firm made its first edtech investment (in social learning startup Brainly) in May. A month later, it invested in Udemy, saying that these investments “solidify our belief that education globally can be transformed with the right technology platforms.”
In addition to focusing on learning technologies as “a sizeable market that has not yet seen the technology impacts [Naspers has] seen in other sectors,” Naspers Ventures is also looking to expand its investment in the U.S. market; with Naspers’ global reach, the company believes it can help learning technologies companies with the potential to grow beyond the U.S. The venture firm is headquartered in San Francisco for easy access to a number of such companies.
As training organizations rely more and more on external training suppliers, there is a growing number of entrepreneurs in L&D. Especially in the technology sector, according to Doug Harward, CEO of Training Industry, Inc., “there is an increase in investment funding for companies to provide innovative tools and apps to deliver and reinforce training content.” Naspers Ventures’ recent entry into learning technologies is evidence of this trend, and its investment in Codecademy especially demonstrates the growing importance of technology as both an important skill set and a tool for improving learning engagement and outcomes.