Dive Brief:
- Venture firm Carrick Capital will acquire Flatiron School, it announced June 30; the company is a "bootcamp" style technical training provider that offers programs in software engineering, data science, UX/UI design and cybersecurity. Flatiron is a prominent company in this category that also packaged its programs for enterprise training services and gained a big boost when WeWork acquired it in 2017.
- Flatiron School co-founder Adam Enbar will remain CEO of the company, which will keep its headquarters and "a majority of its campus programs out of existing locations as a WeWork member," according to Carrick Capital's press release. Enbar, along with Carrick co-founder Jim Madden and another managing director, Paul Zolfaghari, will join Flatiron's board of directors.
- "Flatiron School is a great representation of Carrick's view about the future of learning, the future of work, and the opportunities that exist for innovative companies to help enable those transformations," Madden said in the statement. "We are impressed by … the company's alternative education model that provides students with the 21st century skills necessary to succeed in the modern technology economy."
Dive Insight:
When WeWork acquired Flatiron School in 2017, the ascendant commercial real estate company's value was estimated to be $20 billion, according to a TechCrunch report. Adding a technical training provider like Flatiron, at a cost of around $28 million, according to an EdSurge evaluation of its 2019 IPO filing, allowed WeWork to offer employees and customers an inside track to developing skills needed for the modern economy.
"Like Flatiron School, WeWork realizes that our shared vision for the future of work and education is only possible by fostering dynamic, supportive communities — something you'll immediately feel stepping into our campus at 11 Broadway or any of the 170+ WeWork locations around the world," Flatiron School wrote in an announcement when it joined WeWork.
WeWork's bubble burst, however, as it sought a valuation of nearly $50 billion as it attempted to go public. The due diligence and information gathering required to go public revealed "expanding costs, among other things," according to TechCrunch, which "sent its valuation plummeting." Divesting from this acquisition is one of the many actions WeWork appears to be taking in hopes of restabilizing its business.
Ultimately, Flatiron School seems to be in position to continue relatively normal operations despite the circumstances surrounding its soon-to-be former owner. Though it did reportedly lay off "dozens of employees" in November 2019 and cut "at least 100 jobs" in May 2020, according to Business Insider. Some of Flatiron's peers include General Assembly, which was acquired by staffing and employment firm Adecco in 2018, and Trilogy Education, which 2U purchased as part of a $750 million deal.
The mission of these technical training providers has evolved from offering coursework for individuals to running large upskilling programs for major employers. As the digital skills gap continues to affect the employment market, even during the pandemic, these companies are aiming to be part of the solution. For example, 2U recently launched a scholarship program aimed at increasing access to these programs for underrepresented groups.
