NASDAQ-listed education company, 2U, has acquired GetSmarter from its founders and growth capital investor DiGAME in an all-cash $103 million deal. The deal allows for an additional $20 million earnout on the achievement of certain financial milestones through the end of 2018.
Cape Town-based GetSmarter was founded in 2008 by the Paddock brothers, Sam and Rob, who have largely bootstrapped the business since its launch. Sam Paddock told Ventureburn that DiGAME invested $5 million in the company on 2016. Valuation details for that transaction or the exit were not disclosed.
GetSmarter, which offers short online executive education courses in partnership with several leading universities, has served over 50,000 students in 150 countries since its launch. The firm, which works on a revenue-share model with its university partners, generated $17 million in revenue for 2016, having been very successful at increasing the rate of new client acquisition.
“In 2U we have found a partner who makes us stronger. They bring deep experience and access to capital that allows us to pursue stellar growth and stand out student outcomes at scale.” said Sam Paddock, GetSmarter’s CEO. “We look forward to better serving our University partners and their students across the globe.”
The firm offers a portfolio of 70 courses with some of the world’s most renowned institutions of learning including Cambridge University, Harvard University’s strategic online learning initiative, MIT and the University of Chicago. It’s portfolio of partners includes three of Africa’s leading academic institutions, the University of Cape Town, University of Witwatersrand and University of Stellenbosch Business School.
Once the deal closes in early July, GetSmarter will continue to operate independently as a wholly-owned subsidiary of 2U. The founders and management team will continue to operate the business.