CodeMonkey Acquired by TAL Education Group

column | Mergers and Acquisitions

CodeMonkey Acquired by TAL Education Group

By Betsy Corcoran (Columnist)     Dec 5, 2018

CodeMonkey Acquired by TAL Education Group

BEIJING – CodeMonkey caught more than a few bananas today.

An educational coding platform for grade school students with the cheeky tagline, “Write code. Catch bananas. Save the world” said today that it has been acquired by Beijing-based TAL Education Group.

Business analysts in Israel estimated that TAL paid between $15 million and $20 million for the CodeMonkey. Together, the duo plan to continue to expand the CodeMonkey brand internationally and develop extensions for the Chinese market.

By working with TAL, CodeMonkey hopes to become “the number one coding platform for kids in the world,” said CodeMonkey CEO Jonathan Schor at a press conference in Beijing.

The five-year old startup, which is based in Tel Aviv, teaches primarily middle-school students how to code by giving them challenges and puzzles that they solve by writing real code. Schor, one of the three co-founders, made the announcement this week at the Global Education Summit (GES), in Beijing.

The company, which has 14 full-time employees primarily in Tel Aviv, says that it has 10 million users around the world. About three-quarters of the elementary and middle schools in Israel use CodeMonkey, which provides guided lesson plans, tutorials and a teacher dashboard for tracking student progress. Students learn to write CoffeeScript, which is similar to JavaScript. The platform can also be used at home.

Although TAL is huge by contrast—with reported revenue of over $1 billion last year—the deal with CodeMonkey is a first for it, too: Although TAL has an investment portfolio of more than 100 ventures, this is the first non-Chinese acquisition the company has done. “We hope this collaboration will become a starting point of TAL’s series of cooperation with top companies all over the world, to bring better education to more kids,” said Robin Bai, TAL co-founder and president, at the press conference.

The CodeMonkey story is a classic: Schor, his brother, Ido, and their childhood buddy, Yishai Pinchover, began to dabble with computers as children in the 1990s, with encouragement from their parents, several of whom were involved with software. Their first programming experiences involved learning Logo, a programming language created for children by Seymour Papert and his colleagues at the Massachusetts Institute of Technology.

At the time, the computers used by the boys lacked Internet access, so they began writing their own games. In high school, Jonathan wanted to share the opportunity to learn to code with underserved students in Israel. “We tried to start CodeMonkey for the first time in 2007,” he recalled—but found little support. The three young men began to pursue different career paths.

Fast forward to 2013: Israel’s Center for Education Technology (CET) had started an edtech incubator, MindCET. The Schor brothers and Pinchover became part of its second cohort, which provided a modest investment at the end of the six-month program. Critically, CET also helped the startup find the first teachers who tried out the program.

“As entrepreneurs focused on education and technology, we at first had wild visions of a platform completely independent of the classroom environment and teacher assistance,” says Ido Schor, a co-founder and CodeMonkey’s chief technology officer. “As we met real customers, we understood the value of teachers and how our product had to develop along with teachers.”

Within the first year of piloting CodeMonkey with teachers, the company began to charge for their product. “We did it naively,” concedes Pinchover. “We just integrated a payment gateway into the website and launched a yearly subscription with a price that we invented.” These days, the company charges approximately $15 per student per school year for its platform.

Building a strong product that won the hearts of educators was essential, Pinchover told EdSurge. But figuring out how to reach educators was also critical. Once again, CET helped, notably by including CodeMonkey on its lists of useful products for schools. CodeMonkey also worked with other partners including BrainPop. And when ran its second, highly publicized “Hour of Code,” CodeMonkey was among the dozen or so products highlighted by the nonprofit as a useful tool for teaching coding.

The CodeMonkey team began talking with TAL about a collaboration almost four years ago, Pinchover says. Over their five years, the team raised about $2 million from a combination of angels, CET and a few institutional investors including the US based Investors Circle, Israel’s Zora, Invictus, EduLab and a Chinese-Israeli investment fund. Last year, CodeMonkey was cashflow neutral.

Collaborating with TAL to enter the Chinese market was compelling: TAL operates after-school programs that reach 2 million students; it reaches another 17 million through online communities. As the teams talked, they decided that acquisition—rather than investment—would move their agenda faster. “We hope to combine the top-quality content from CodeMonkey and TAL’s innovative practice in pedagogy and work together to build an event better product,” said TAL cofounder, Bai.

CodeMonkey will be a wholly owned subsidiary of TAL and the management team plans to stay in place to continue to build the business. Pinchover and the Schors expect that the product that they will build for China will be different from their current offering: “TAL’s main audience today is the afterschool market,” Pinchover points out. “The profile of the [afterschool] teacher is completely different from what we know of schools in the U.S. or even in schools in rural China. “So, when we’re designing and implementing the [new] product, we will have that in mind,” he said. Also on the CodeMonkey roadmap: Introducing curriculum to help students learn to program in Python and to support coding projects that are integrated with STEM projects.

TAL and CodeMonkey made the announcement at the second annual GES conference. The invitation-only event drew a high-profile group of Chinese government, university and industry leaders. The co-hosts include the China Development Research Foundation, Beijing Normal University, Tencent, New Oriental, TAL Education Group and GSV, the US-based investment organization.

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