General Assembly’s CEO Jake Schwartz told Reuters on Wednesday that he is looking into the company’s financing options, and that includes potentially selling the New York-based coding bootcamp.
But it’s still unclear how serious the company is about finding a new owner for its 22 campuses, which are located around the U.S. and internationally. The company has raised nearly $120 million and is valued at $425 million, Reuters reports, and “would aim for a higher valuation in a sale.”
What is apparent, however, is that General Assembly is looking into new financial options and courting new investors. Most recently, Guardian Life Insurance Company of America announced it has partnered with General Assembly to provide digital training for its employees. That partnership involved “both an equity investment and debt with a term of five years,” a spokesperson for General Assembly tells EdSurge.
Schwarz denied requests from EdSurge to comment further on specifics of options the company is exploring. The CEO did provide the following statement in an email:
“We are fortunate to have many types of investment options, including venture capital, private equity, and/or potential M&A, with some of the world’s best investors. And of course, as has also always been true, when we field offers from investors, we work with our trusted partners and advisors to make sure we can assess appropriately.”
The backdrop to the news is a coding education market that experts say may be reaching a point of consolidation. Between 2016-2017, six coding bootcamps shut down including two of the largest and longest-running coding bootcamps, Dev Bootcamp and the Iron Yard, leaving many to wonder about the viability of the business model.
“There has been a lot of excitement around coding bootcamps but not enough time to shake out if the promise is real,” says Clare McCann, deputy director for federal higher education policy at New America, a nonprofit think tank. Consolidation for some players in the market, she thinks, reflects a “right-sizing” in response to the hype when bootcamps first arrived on the scene.
Meanwhile, surveys analyzing bootcamps overall show that there is still signs of life in the $260 million industry. In 2017, bootcamps graduated at least 23,000 students, their highest count yet, and that the industry is growing at a rate of 1.5x, according to Course Report, a private company that researches the bootcamp industry. (Reuters also reports that “General Assembly has a minor stake in Course Report,” which was previously undisclosed.)
Some are more optimistic about the shifting landscape, pointing to the co-working space WeWork’s acquisition of New York-based Flatiron School. And just last month, online program management company 2U announced it will be using an online learning platform developed by Flatiron as part of a larger deal with WeWork.
“You can imagine [a General Assembly sale] in the same way that WeWork and 2U now have a deal, but maybe General Assembly will make some deal with an online learning provider or an online space that enables them to do something faster than before,” says Michael Horn, a principal consultant at Entangled Solutions. “I think they are doing this from a position of strength.”
Given General Assembly’s notably high fundraises, Horn says a potential sale fits in with bootcamp market trends. “The investors they have raised from probably have capped funds, and are looking for exits at some point and want to know there is an end in the future,” he adds. “A sale could allow an investor to get out.”
What’s less clear, he says, is who might buy the company if that idea came to fruition. According to Horn: “It’s a get-your-popcorn moment.”
Editor's note: This article has been updated to reflect that the bootcamp industry is growing at a rate of 1.5x; it previously stated 1.5 percent. A description of the partnership between WeWork, 2U and Flatiron school has also been updated.