Lynda.com, a pioneering online personal and professional continuing education company, has raised $186 million, at an approximately $1 billion valuation, to be used for acquiring education technology companies, writes Jonathan Shieber of TechCrunch.
This is the second round for Lynda, after a $100 million investment from Accel Partners, Spectrum Equity, and Meritech. This new round was led by TPG Capital, a private equity firm with $65 billion worth of management assets.
Eric Robison, the company’s chief executive, says Lynda.com currently has three potential targets for acquisition, along with several other companies waiting in the wings. It is possible that the company will be looking to bring in programming tutorial companies like Thinkful or Treehouse.
Lynda.com allows users to access hundreds of courses ranging from business classes to design training. This funding comes at a time when the US continues to spend on continuing education at a total annual rate of about $55 billion. The American workplace demands more technical training and skills, which along with the rising cost of a traditional degree and a demand for skilled developers and programmers, makes education a must for professionals.
As online education companies go, Lynda.com is a senior citizen, having started 20 years ago with a book on web design. With no outside funding until 2013, reports Kia Kokalitcheva, writing for VentureBeat, now the company hires experts to teach courses and produces its course videos in its own studios. About 55% of the company’s revenue comes from individual subscribers’ fees which start at $25 a month. According to Lynda.com president , Andrew Wait, schools, companies, and other organizations can use the company’s courses to support onsite training programs. The new acquisitions will allow Lynda.com to expand to international markets and will increase its content for consumer-level users and the company’s enterprise customers.
The company is located on 12 acres in Carpinteria, CA and employs approximately 400 people at that location. In 2012, the last time Lynda.com revealed its earnings, it generated $100 million in revenue. The Pacific Coast Business Times quotes Robison:
“This investment is a tremendous vote of confidence in Lynda.com’s ability to empower more people everywhere to learn the skills they need to succeed.”
The company provides services that complement traditional education, rather than replacing it. Students learn skills that will allow them to fine tune the time they have learning from live instructors. The acquiring of other educational companies will also raise the company’s customer base, already comprised of half the Fortune 50, along with colleges, universities, and government organizations.
CB Insights’ research found that this is the largest financing for an education-technology company in at least the past five years, says Eric Newcomer of Bloomberg. With more than 5,700 courses and 255,000 video tutorials in English, French, German, and Spanish, it is understandable that Lynda.com is profitable. On its website, the company’s purpose is outlined as providing training for over 4 million people, and helping those people stay ahead of software updates, allowing them to pick up new skills, giving customers the knowledge needed to switch careers, assisting clients in landing promotions, and can even helping its users explore new hobbies.