Issue #14: Trends in Bootcamps

Looking back to look forward

I love b-sides and rare tracks. I’m a sucker for Bob Dylan’s long-running Bootleg Series of studio offcuts, forgotten tracks and songs that never became anything bigger.

You can trace the early sketches of ideas to the finished article. Early live versions of “’Til I Fell in Love With You” and “Standing in the Doorway” take on added resonance when you hear them on Time Out of Mind.

You can hear how the rough lyrics and loose chord arrangements wash away.

Today's newsletter is a summary of the fragments of bootcamp news from the last six months, examining the trends over time and how they develop into full-fledged topics, just like a b-track can hold ideas that inspire later hit songs.

But don’t worry, I’m not going to write this newsletter in the style of Subterranean Homesick Blues.

Nobody needs that in their life right now.

This week I pieced together a lot of news that, when taken individually, can be tricky to to place. But taken together, starts to point at some underlying themes in the bootcamp space.

Sometimes it's instructive to look back to see where you're going. 

Consolidation

2022 was a mini-2018 when it came to M&A activity. Several smaller providers consolidated, closed up, or merged. So it’s worth having a look back at what happened.

In February, Cengage Group bought cybersecurity trainer Infosec for $190.8 million. 

In June, Le Wagon bought data training company Emil for an undisclosed fee. The African Leadership Group acquired Holberton School (and split the company in two, one part became the learning platform, the other part the school). And Alchemy bought web3 education provider ChainShot. 

For all three acquisitions, the fees were undisclosed. Which probably means the numbers involved were good but not great for either side.

In the autumn, Simplilearn announced the all-cash acquisition of US bootcamp Fullstack Academy. The buy wasn’t an obvious move from Simplilearn, given their focus on online. But it likely represented a bargain. In September, Zovio (Fullstack's previous owners) had put the company up for sale. And the bootcamp was the last asset they needed to shift.

I.T. staffing provider Disys acquired Grand Circus, a Detroit-based coding bootcamp. A move that, on paper, looks similar to Adecco’s purchase of General Assembly.

The bootcamp should act as an upskill or reskill agent for Disy’s staffing vertical. At least that’s what everyone hopes. Elsewhere, Indiana Wesleyan University acquired non-profit coding and cybersecurity bootcamp Eleven Fifty Academy.

At the end of the year Coding Dojo was (quietly) acquired by Colorado Technical University. Which possibly indicates the bootcamp was struggling to hit enrollment targets for 2022.

In Europe, Future Group announced a new consortium to accelerate bootcamps across Germany, France and Sweden. Wild Code School, Neue Fische, Salt Academy and Spiced are the first four bootcamps to pool resources under the initiative.

For-profit universities continue bootcamp partnerships

Innovation in the private sector continued to outpace academia in 2022. Looking for growth, many colleges announced bootcamp partnerships.

Springboard, an online coding bootcamp, announced a new partnership with Gonzaga University. The partnership will support learners into cybersecurity and software engineering careers. The partnership was Springboard's first of 2023 and 10th overall.

Fullstack Academy has built strong partnerships with twenty university and industry partners. Partners include Caltech CTME, California Polytechnic State University, Virginia Tech, and Wake Forest University. In January, the company announced a new partnership with Nexus at Michigan Engineering. Fullstack will provide tech bootcamps in data analytics, DevOps, A.I., Fintech, and business analytics.

Across the pond HyperionDev partnered with the U.K. Department for Education. The South-Africa based online bootcamp will train up to 1,400 potential learners in software development and data.

HyperionDev are looking to cement their early mover advantage in the EMEA market. The company aims to have 10 of the world's top universities working with them by 2023.

Bootcamps are a hit with U.K. policymakers. Maybe they still think it’s 2012? According to the Financial Times, the U.K. government spent over £100million on bootcamps since 2020. Training people in everything from data science and artificial intelligence to lorry driving and construction.

The jury is still out on whether outcomes are strong for these bootcamps. A recent Department for Education assessment from 2021 indicates limited success. With one in five participants dropping out. And only 54 percent of those who did complete their course getting a new or better job.

The DfE also flagged the underlying data is inconsistent. Bootcamp providers supplied inaccurate data and underestimated the number of incompletes.

Large bootcamps continue to struggle

The larger bootcamps had a tough 2022. General Assembly reported a 20% decrease in year-on-year revenue. The Adecco Group (GA's owner), has tried to pivot the company from a B2C bootcamp to hybrid learning.

Adecco has also looked to add GA as a talent provider to their portfolio of companies. This is very much still a work in progress. The bootcamp quietly shuttered several U.S. campuses in 2022, opting to double down on online delivery. Further impacting the B2C business.

BloomTech (formerly Lambda School) continued to have a tough 18 months. A pioneer of the ISA-fuelled boom, BloomTech announced that it was laying off 50% of its staff in December. It's the third round of layoffs the bootcamp has conducted since 2019.

Negative press continued to dog BloomTech throughout the year. A student accused BloomTech of intentionally misrepresenting its job placement rates. While Business Insider suggested the company inflated its hiring efficacy. And hyped up a curriculum that didn't upskill folks at the level expected.

And we saw other bootcamps cut staff in 2022. Career Karma, a platform that helps connect students to coding bootcamps, cut staff, while Flockjay pivoted away from its bootcamp pitch in 2021.

But lest you think this is a Debbie Downer newsletter, it's not all bad news. On a recent earnings call, Stride reported a 42% revenue increase among their "career learning" companies in 2022. Stride's "career learning" companies include Tech Elevator and Galvanize/Hack Reactor.

Stride is positive they are seeing a turnaround for the bootcamp sector. And they are banking on a recession being a good time for adult education as people retrain or reskill.

In the last quarter of 2022, the sector (including MedCerts) bought in $30m for the company.

Where will future growth come from? Larger bootcamps continue to flirt with hire-train-deploy, used by FDM Group and Revature. I know at least 2 highly selective bootcamps are looking at this model for growth in 2023.

And apprenticeships are the obvious growth route, both in the U.K. and the U.S.

We saw movement in this direction in 2022.

Tech Elevator partnered with mobile developer Niantic to run an apprenticeship program. The program, titled Voyager, will launch tech careers for 20 underrepresented individuals. The program will run across Los Angeles, San Francisco, and Seattle.

And Code Fellows announced a partnership with American Apprenticeships to create accredited apprenticeship programs in software development.

Expect to see similar partnerships in 2023.

Focus on Middle-East

Growth stories are abundant in the Gulf states. Tuwaiq Academy announced it would launch 20 technology boot camps across Saudi Arabia. Partners include Amazon, Huawei, and Alibaba.

The Academy is part of Saudi Arabia's aim to improve the digital skills of 100,000 youngsters by 2030. The larger vision is to make the kingdom the world's leading technology country. Grand aims indeed.

The initiative marks the second phase of Saudi Arabia's push to speed up growth in the country. Technology is a critical driver of the transformation.

The country has put together several deals in the past few years to boost its high-tech ambitions. It is on track to spend $24.7 billion on technology by 2025, reportedly the world's highest government spending. And $6.4 billion in future technologies. And bootcamps have supported this growth. In 2018, General Assembly was one of the providers chosen to run courses in programming and UX design.

And while G.A. no longer runs programs in Saudi, they did launch a campus in Bahrain in 2022, offering programs in software engineering, data analytics, and many more.

Regional / Hyflex model

Bootcamps haven't been immune to the effects of the pandemic. Many programs remain online-only but a few providers have experimented with new models.

"Hybrid-flex" has become the preferred expansion strategy. Despite sounding like a polygamous relationship, "hybrid-flex" is a blend of in-person and online delivery.

The approach allows bootcamps to keep instruction online and bring students together in a physical location for community events.

Tech Elevator has led the way with this model. The bootcamp will open new campuses in Jersey City and Washington DC in 2023. But no in-person instruction will occur on campus. Instead, students can use the space to work on group assignments and meet with the company's career counselors.

The bootcamp has taken a regional focus to expansion. With campuses clustered in the north-east. The Jersey City campus will be the bootcamp's northernmost location. With other locations in Wilmington, Philadelphia, DC, Cleveland, Columbus, Cincinnati, and Pittsburgh.

Licensing

As bootcamps look for ways to grow revenue, licensing curriculum is an area of growth. Seattle-based bootcamp Code Fellows partnered with Academia de Código to run cybersecurity and software development courses in Portugal.

Instead of opening new campuses, Code Fellows licenses curricula to other providers through the Powered by Code Fellows program.

Powered by Code Fellows allows other schools and universities to bring Code Fellow's curriculum and outcomes to their students.

Through the program, Code Fellows provides the curriculum, operational support, and instructional training. To ensure schools can help their students gain the skills they need to land careers in tech.

While Code Fellows graduates under 300 learners a year, its reach is much broader. The curriculum is behind bootcamps in the U.S., the Caribbean, and Vietnam, among others.

In August, Code Fellows announced a partnership with Tech Educators to bring their coding bootcamp to Norfolk and the East of England.

And in July, the bootcamp announced a partnership with Yellow Tail Tech to help students who want to jump-start or transform their careers in the tech industry.

The bootcamp was also recently endorsed by OneTen as a leading talent developer. OneTen is a coalition of business executives committed to upskilling, hiring, and promoting one million Black Americans over the next 10 years into family-sustaining jobs.

Summary

I once spent a weekend in Reno and came away $400 up. I haven’t gambled since, it can only be downhill from there.

So I think betting on what will happen for bootcamps and last-mile providers in 2023 is a fools game. 

But I expect a number of these trends to continue this year.

Further consolidation of smaller providers seems likely to continue in 2023. A number of VC-backed providers will run out of money.

A lot of bootcamps will be available cheaply for any larger providers, or management companies. Growth will continue to be an option in the Middle East, as funding doesn’t look like drying up any time soon. And look for the larger bootcamps to expand into hire-train-deploy, apprenticeships or licensing.

As Alberto pointed out this week, it’s hard for bootcamps to sustain the growth trajectory VC’s expect. But there are other options available.

Until next time.