The Future of Coding Bootcamps: How AI is Reshaping the Market
For years, coding bootcamps were seen as a golden ticket into the tech industry. They offered a quick path to marketable skills and lucrative careers. More than 100 of these programs popped up across the U.S., touted as a “no-frills alternative” to traditional college degrees. However, the landscape is shifting dramatically, and the rise of artificial intelligence (AI) is forcing a fundamental reassessment of the bootcamp model.
The AI Disruption
The primary challenge facing coding bootcamps stems from the way AI is altering the tech job market itself. Tech companies are increasingly leveraging AI tools to automate tasks that were previously handled by entry-level human coders. This has led to what industry insiders now describe as “GPT monkey” roles – positions where employees primarily handle minor tasks while relying on ChatGPT, Gemini, and other AI tools for complex software writing.
This shift has created multiple headwinds for coding bootcamp providers:
Changing Employer Needs: Employers are now seeking candidates with specialized tech skills, particularly in AI and machine learning, rather than general entry-level coding abilities.
AI as an Education Provider and Bootcamp Competitor: Generative AI tools have proven to be excellent tutors and learning tools. Many individuals consider them more accessible and a much lower-cost pathway to acquire basic coding skills, making the traditional bootcamp model less appealing.
Reduced Entry-Level Demand: The automation of basic coding tasks using AI has significantly reduced the demand for entry-level tech employees, directly impacting the primary market that bootcamps serve.
2U’s Market Exit: A Telling Case Study
The struggles of 2U, a major player in the bootcamp market, is a perfect illustration of these headwinds. In 2019 2U acquired Trilogy Education for $750 million. Trilogy is an education company that helps set up and run short-term coding programs at university extension schools. Over the next several years, 2U partnered with 50 colleges and universities to set up and run their coding bootcamps. However, in December 2024, 2U made what industry observers called a “bombshell announcement” to exit the bootcamp sector entirely. It’s important to note that they didn’t sell their bootcamp business – they simply shut it down. This suggests their $750 million investment held little or no market value.
This decision followed a stark 23.3% revenue decline in 2U’s Alternative Credential Segment, driven largely by a 40% drop in bootcamp enrollment. As noted by education sector investment banker, Rich Jackim, the business line “was not worth selling, due to either a lack of buyer interest, or a realization that the market value that could be realized in a sale would not be worth the cost and effort to sell it, or possibly both.”
Instead of selling, 2U will write off their $750 million investment in Trilogy and pivot to offering other kinds of microcredentials through edX.org, which it bought for $800 million in 2021.
The same situation has occurred to dozens of smaller coding bootcamps across the country, including CodeUp in Austin, TX, that was forced to close in January 2024 because enrollment slowed to the point where it could no longer cover its operating costs. This highly respected bootcamp was forced to close in the middle of an investment banking process to sell the business.
The Reality on the Ground
The challenges extend beyond just market dynamics. A telling example comes from an EdSurge podcast hosted by Jeff Young that interviewed, Tim Lum, a returning adult student who attempted the bootcamp route in Honolulu. His experience highlighted common issues with the model: chaotic classroom environments due to widely varying skill levels among students, and the reality that many students essentially teach themselves using the bootcamp’s curriculum. Lum ultimately decided that a traditional computer science degree was necessary to achieve his career goals, enrolling in a community college before transferring to a four-year university.
Market Implications and Future Opportunities
For boot camp owners and potential buyers, these developments have profound implications:
Reduced Business Value: Traditional bootcamp businesses face significant downward pressure on valuations.
Fewer Buyers: The lower enrollment numbers and existential risk from AI has already results in fewer buyers willing to enter the coding bootcamp sector.
Lower Value for Students: The value proposition for students is weakening as AI tools provide alternative learning paths and entry-level coding positions become more automated.
Evolution Required: Success in this coding bootcamp sector will require owners to make significant changes in the traditional bootcamp model.
However, opportunities exist for bootcamps that are willing to evolve:
Specialized Training: Programs focusing on advanced skills in AI, machine learning, and emerging technologies that resist automation could find sustainable market niches.
Microcredential Integration: Developing shorter, more focused programs that complement rather than replace traditional education might provide a viable path forward. This could include programs that result in an industry recognize credential or certification, rather than a certificate of completion.
Industry Partnerships: Closer integration with universities or tech companies could help create more valuable and recognized credentials.
Conclusion
The impact of AI on coding bootcamps marks a significant inflection point in the tech education market. While the traditional bootcamp model faces existential challenges, the underlying need for tech education remains strong – it’s the nature of that education that’s changing. For investors and bootcamp owners, success will require carefully analyzing these market shifts and adapting to a landscape where specialized skills and AI literacy increasingly dominate the value proposition.
The days of coding bootcamps as a quick alternative to traditional education may be waning, but opportunities remain for those that are willing to evolve their offerings to meet the changing needs of employers and students.
If you are interested in our other articles about coding bootcamps, please read Coding Bootcamp Acquisitions: 2014 to 2022.
About the Author and Jackim Woods & Co.
Rich Jackim is an education industry investment banker, education industry entrepreneur, and former mergers and acquisitions attorney.
For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.
Rich also founded a successful training and certification company called the Exit Planning Institute, which he sold to a private equity group in 2012.
Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.
Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.
If you own an education-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.
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Mergers and Acquisitions in the Education Industry in 2022
This post provides an overview of mergers and acquisitions activity in the education and edtech sectors in 2022
The education sector took some significant twists and turns when the COVID-19 pandemic changed the world. We saw a surge of new users, and new tools, around online learning; but we also saw people and organizations in 2020 and 2021 rethinking how to get the best out of learning environments overall. Now that COVID is largely behind us, 2022 is a year to take stock of how different education related companies evolved and grown.
McGraw Hill acquired Boards & Beyond, a provider of on-demand video libraries and comprehensive online resources for medical students, for an undisclosed amount.
Global University Systems acquired FutureLearn for an undisclosed amount.
GoStudent acquired Studienkreis for an undisclosed amount. This is GoStudent’s 4th acquisition.
The Riverside Company, a private equity group, acquired Applied Educational Systems (AES), a provider of digital career and technical education content for K-12 schools and career centers. AES is an add-on to Riverside’s iCEV platform, a leading developer of SaaS-based digital curriculum, instructional materials and industry certifications.
Universal Technical Institute, a provider of vocational education and skilled trades programs, acquired healthcare-related higher ed provider, Concorde Career Colleges, Inc., for $50 million. Concorde Career Colleges has 16 brick and mortar campuses and roughly 11,200 enrolled students in its allied-healthcare programs.
Solutions provider Follett School Solutions acquired the library management system Access-It Software Ltd.
Apogee, a company that offers technology services for higher ed, acquired Cumulus Technology Services, a cloud services consultancy.
The education communications and analytics provider SchoolStatus acquired Smore, a Tel Aviv-based K-12 email newsletter provider that’s widely used in the U.S.
Publisher McGraw Hill acquired the on-demand video library for medical students, Ryan Medical Education, LLC d/b/a Boards and Beyond. The amount was not disclosed.
As mentioned above, London-based FutureLearn was acquired by Global University Systems, a global for-profit higher ed provider based in the Netherlands.
California-based Mattel, one of the biggest toy sellers in the world, acquired Caribu, a digital reading app for families, for an undisclosed amount.
Higher education solutions provider Top Hat acquired STEM learning platform Aktiv Learning.
University Headquarters acquired Discover Early Childhood EDU, an informational guide about degree offerings.
BiC, one of the world’s biggest pen sellers, acquired Advanced Magnetic Interaction, a company that’s focused on “augmented” human-computer interaction.
Learnsoft, a learning management system provider, raised $16.7 million in Series A funding led by Elsewhere Partners.
Discovery Education, a digital edtech platform provider, acquired Pivot Interactive, which has a library of interactive educational science videos. Discovery has private equity backing from Clearlake Capital, and it also acquired DoodleLearning earlier in the month.
EarlyDay, an early childcare education career marketplace, raised $3.25 million.
The children’s publisher Scholastic acquired Learning Ovations, which runs a literary assessment and instructional system.
Edlio, a K-12 communications technology company, acquired SchoolInfo, a mobile app creator for schools.
LumiQ, a Canada-based company that runs a podcast for training chartered professional accountants, raised $5 million for expansion in the U.S.
Roper Technologies, Inc., announced it has reached an agreement to acquire the school administration software provider Frontline Education in a transaction valued at $3.725 billion.
Akili Interactive, which is developing a video game treatment for pediatric ADHD, raised $163 million in a merger with the special purpose acquisition company (SPAC) Social Capital Suvretta Holdings Corp.
Upkid, an on-demand marketplace for childcare centers and teachers, raised $1.7 million in a pre-seed round.
Outcome Group, Inc., an education financing company, announced it has received new debt facility from Variant Investments, LLC, to expand its education portfolio.
Alchemy, a Web3 developer, acquired ChainShot, a coding bootcamp company, for an undisclosed amount.
Renaissance Learning, an educational software services company, acquired Illuminate Education for an undisclosed amount, according to an email sent to Illuminate customers.
Discovery Education, a digital learning platform, acquired the UK-based math and language arts product provider DoodleLearning for an undisclosed amount.
Vsauce’s Curiosity Box subscription service was acquired by science subscription provider MEL Science. It reportedly closed for $12 million.
The future-of-learning private equity firm Achieve Partners acquired Helios Consulting, a certified Workday advisory partner, to build out its apprenticeship programs.
Cybrary, a cybersecurity and IT career development company, raised $25 million in Series B funding.
Territorium, a skill acquisition edtech company, closed $4.4 million in seed funding.
Creative Galileo, an early learning platform, raised $7.5 million in Series A funding.
Pearl, leading research backed, all-in-one tutor management platform, announced its seed fundraising has passed $4 million.
Arist, a microlearning platform, raised $12 million in Series A funding.
APDS, a public-benefit corporation whose advanced career readiness platform offers career training to incarcerated people, raised $7 million in Series C funding.
Class Technologies announced it has closed its acquisition of Blackboard Collaborate.
Kangarootime, an early childhood education software management company based in Buffalo, NY, closed $26 million in Series B funding.
Coding Dojo, a coding boot camp company, raised $10 million. The Bellevue, Washington-based organization trains software engineers both in-person and online and has experienced more than 100% year-over-year growth over the last two years.
upGrad, a Mumbai-based “unicorn” and test-prep company, doubled its valuation after a $225 million funding round. It’s now valued around $2.25 billion. The nonprofit Educational Testing Service was involved in the funding round.
Elevate K-12, the leading provider of high-quality live-streaming instruction for US K-12 classrooms, raised a Series C $40M round of funding led by venture capital firm General Catalyst.
Velocity Career Labs, a startup that wants to create a blockchain-based platform to manage employee’s credentials, raised $6.5 million in funding.
Multiverse, an apprenticeship facilitator, founded in London and now co-headquartered also in New York — has closed a Series D of $220 million, with its post-money valuation coming in at $1.7 billion. StepStone Group (not to be confused with recruiting platform StepStone) and previous backers Lightspeed Venture Partners and General Catalyst all co-led this round, with Founders Circle Capital and past backers Audacious Ventures, BOND, D1 Capital Partners, GV and Index Ventures also participating.
Cambly, a language learning app, raised $60 million in Series B funding, which is encouraging because language learning apps are a rarity in the VC-backed consumer tech space because they have struggled to make money.
Prenda, a K-8 micro-school company, announced a $20 million Series B funding round. The Series B is being led by Seven Seven Six (776), Alexis Ohanian’s firm, with strong participation from edtech-focused VC Learn Capital, Modern Venture Partners, Peak State Ventures, and the companies original angel investors also participating.
Achieve Partners acquired a majority stake in Boclips, a company that curates educational videos. Boclips works with publishers and education providers worldwide to enrich learning with the world’s best educational videos and podcasts. Boclips is the trusted destination for rich media that are vetted for quality, sourced from leading creators, and curated specifically for education. Achieve Partners is engineering the future of learning and earning by investing in cutting edge technologies and novel business models to bolster skill development and secure the future of work for millions of Americans.
IXL Learning, a learning platform company, acquired Curiosity Media, which develops language learning services.
BibliU, a learning platform, announced it has raised $15 million in funding. All existing institutional Series A investors – Stonehage Fleming, Oxford Science Enterprises, Guinness Ventures, and Nesta Impact Investments – participated in the round.
Beable Education, an online literacy recovery platform, acquired Readorium, a leading provider of educational software that teaches reading comprehension skills through science text differentiated to students’ reading levels.
Go1, a hub of on-demand corporate training resources, announced that it raised more than $100 million in a new round of funding, bringing its total market valuation to over $2 billion. The funding was co-led by AirTree Ventures and Five Sigma, with SoftBank Vision Fund 2, Salesforce Ventures, Blue Cloud Ventures, Larsen Ventures, Scott Shleifer and John Curtius from Tiger Global, TEN13, M12 (Microsoft’s venture fund), Madrona Venture Group, SEEK and Y Combinator also participating.
Riverside Insights, a leading developer of research-based assessments and analytics, today announced its acquisition of Aperture Education, the leading provider of research-based social and emotional learning (SEL) assessments for K-12 schools. With more than 65 years of combined research and SEL experience, Aperture sets the standard for research-based SEL assessment solutions.
Elsevier, a global leader in research publishing and information analytics and part of RELX, has closed the acquisition of Interfolio, a provider of advanced faculty information solutions for higher education, headquartered in Washington DC, US. For over 20 years, Interfolio has supported academics, researchers, higher education institutions and funders. Interfolio’s portfolio includes Faculty Information System (FIS), Dossier, and Researchfish.
India-based startup PW, or PhysicsWallah, has raised $100 million in its Series A funding, the profitable startup said Tuesday. Westbridge and GSV Ventures financed the startup’s first institutional round, which values the two-year-old firm at $1.1 billion (post-money). The company offers low-cost education classes. According to the company’s CEO, “The firm has been profitable since inception with positive cash flow and reserves.”
Guild Education, which provides and manages education-as-a-benefit programs for employers, raised $175 million in a Series F funding round. The round was led by Wellington Management, with participation from Oprah Winfrey, Bon Secours Mercy Health, Citi Impact Fund, and existing investors. The latest funding brings the Denver-based company’s total valuation to $4.4 billion.
About the Author and Jackim Woods & Co.
Rich Jackim is an education industry investment banker, educational industry entrepreneur, and former mergers and acquisitions attorney.
For the last 25 years, Rich has been providing boutique investment banking services to middle-market companies in the education sector.
Rich also founded a successful training and certification company called the Exit Planning Institute which he sold to a private equity group in 2012.
Rich is also the author of the critically acclaimed book, The $10 Trillion Dollar Opportunity: Designing Successful Exit Strategies for Middle Market Businesses.
Jackim Woods & Co offers skilled mergers and acquisitions advisory services to privately owned schools, colleges, and EdTech companies in both sell-side and buy-side transactions. Jackim Woods & Co has arranged over 100 successful transactions, ranging from less than one million to more than eighty million dollars in value.
If you own an education-related business and are interested in exploring your options, I would welcome an opportunity to speak with you. Feel free to contact me at 224-513-5142 or rjackim@jackimwoods.com.
Read More