Clayton-based online learning firm Nerdy Inc. (NYSE: NRDY) has acquired an educational technology startup in a move designed to add coding programs for students to its educational offerings.
Nerdy said Monday it closed in July on its purchase of Chicago-based Codeverse, which offers a digital platform that teaches children how to code. Financial terms of the deal were not disclosed, though Nerdy founder, Chairman and CEO Chuck Cohn said in an earnings call Monday the acquisition "utilized only a small amount of cash considerations."
Founded in 2007, Nerdy is the parent company of Varsity Tutors and offers an array of online tutoring tools including one-on-one instruction, group classes and self-study. In addition to offering individual tutoring for students and adults, it operates Varsity Tutors for Schools, a collection of products designed for school districts. Nerdy became a public company in September 2021 through a merger with a special purpose acquisition company.
With the new acquisition, Nerdy will add Codeverse’s coding program to its portfolio of learning tools and instruction. Codeverse’s online platform teaches children how to code through projects that involve creating apps and video games. Nerdy said Monday it plans to include Codeverse in its individual learning memberships later this year and provide it to its school district users next year.
“Coding is one of the fastest-growing segments in education, yet the tools and resources for students have not kept up with the increasing demand,” Cohn said in a statement. “We understand the importance of coding to our customers, and as we evolve our business to an all-inclusive learning destination the addition of Codeverse to the Varsity Tutors platform will help us deliver on the need for high-quality computer science and coding education year round.”
Co-founded by husband-and-wife team Craig Ulliott and Katy Lynch, Codeverse has been backed previously with private investment, announcing in 2018 it raised $10 million from undisclosed backers.
Nerdy declined to share how many employees are joining Nerdy from Codeverse, but a spokesman said it's "a small team that does not meaningfully impact our overall employee count." Nerdy has about 1,000 full- and part-time employees, according to its 2021 annual report.
Prior to its acquisition by Nerdy, Codeverse previously had staged a class on Nerdy's platform.
“Earlier this year, we hosted a StarCourse on the Varsity Tutors platform, and we were amazed to see that 40 percent of kids who participated went on to create a Codeverse account and build their own game,” said Ulliott. “We’re thrilled to be joining with Varsity Tutors – together, we will unlock this demand and accelerate our ambitious mission of teaching a billion kids to code.”
Nerdy announced its deal for Codeverse as it shared its second-quarter financial results. The company reported quarterly revenue of $42.2 million, surpassing its forecast of $37 million to $40 million for the quarter. It said revenue was up 29% from last year's second quarter.
In recent months, Nerdy has rolled out a new membership model that allows its customers to buy all-inclusive tutoring and learning services on a subscription basis as opposed to its traditional model of buying blocks of tutoring hours to be consumed over time. It has said it believes the new commercialization approach will help “improve the predictability” of its revenue, thanks to its recurring revenue model.
