2U buys coding-bootcamp operator Trilogy Education for $750M in cash and stock

Trilogy Education runs university-branded bootcamps in web development, data analytics, UX/UI design and cybersecurity; 2U runs software for school operations.

That university-partnered tech bootcamps could nearly double 2U's university partners and carry it to $1 billion in revenue by 2021.

Trilogy had raised about $80M per Crunchbase, led by Highland Capital Partners, Macquarie Group and Exceed Capital Partners.

Tech companies kept citing a talent shortage, and training providers were attracting buyers. Crunchbase News pointed to General Assembly, acquired by Adecco for $413 million about a year earlier, and Flatiron School, bought by WeWork in 2017.

2U announced it would acquire Trilogy Education, which powers university bootcamps, for $750 million in cash and stock. Crunchbase News called it a near-unicorn deal for a company that had raised a modest $80 million. According to 2U CEO Christopher Paucek, the acquisition would help the company reach $1 billion in revenue by 2021 and nearly double its footprint from 36 to 68 university partners.

Announced as a $750 million cash-and-stock deal, a confirmation of a trend of tech training schools getting attractive exits; the likely biggest winners were Trilogy's lead investors.

Employers kept reporting a tech talent shortage, creating demand for fast retraining that degrees do not serve.

Trilogy already powered university bootcamps, so buying it added partners, taking 2U from 36 to 68, instead of signing them one by one.

Two earlier bootcamp sales, General Assembly at $413 million and Flatiron School, had set a precedent for buyers paying for training companies.

Paucek tied the deal to a revenue target of $1 billion by 2021, which a degree-only business would have struggled to reach.

When a category is hot, the strategic buyer pays for a ready distribution channel: 2U bought bootcamps already running inside universities rather than building them.

As of 2019-04-08 the acquisition was announced at $750 million in cash and stock. 2U expected it to lift revenue toward $1 billion by 2021 and take university partners from 36 to 68. Trilogy had raised about $80 million before the sale.