PluralSight, a purveyor of online training tools for software professionals, is expected to announce the acquisition of creative software training services company Digital-Tutors in a $45 million deal.
With the Digital-Tutors purchase, PluralSight adds a suite of 1,500 courses focused on media and design to its already formidable array of online training tools for professional developers. The company now boasts over 3,000 training modules in its catalog.
It’s the latest shot in the battle for dominance in the market for software training content — a sector that is increasingly consolidating around larger, better-funded companies.
Tech professionals face a constant struggle to keep up with the latest and greatest in software, so it’s no wonder that training and education services for information tech have become big businesses. In fact, Global Industry Analysts projects that spending on professional training for software and information technology will hit $107 billion by 2015.
And PluralSight isn’t the only e-learning company cutting checks. Earlier in April, Lynda.com announced the acquisition of Compilr in a roughly $20 million deal to add the Halifax, Canada-based company’s services for in-browser learning, writing and testing code to its own education offerings.
“The trends in the space are starting to really develop more clearly for investors as well as for customers in the market,” said PluralSight chief executive Aaron Skonnard. “The [massive open online courses] have gotten a lot of attention but people are struggling to see how a lot of them make money. The companies that have a very solid financial grounding and good ideas are starting to group together.”
At PluralSight, the deal for Oklahoma City-based Digital-Tutors represents the company’s fourth acquisition in eight months. Digital-Tutors already counts some of the largest entertainment tech companies like Pixar, DreamWorks Animation, and Rockstar Games among its clientele of corporations, universities, and professionals.
In all, the company has spent under $100 million on acquisitions including PeepCode, which offers open-source developer courses; the screencast publisher for developers, Tekpub; and TrainSignal, an information technology training company PluralSight acquired in a $23.6 million deal.
Based in Salt Lake City, PluralSight began as a classroom-based training company in 2004 before establishing its online presence in 2008. Since then the company grew its user base and took a single, $27.5 million round from Insight Venture Partners in December 2012.
That round was the starting gun for PluralSight’s acquisition tear, and it also helped boost the company’s revenues from $16 million in 2012 to over $32 million in 2013, and the company is heading for another year of triple-digit growth.
As a result of the acquisition, customers of both Digital-Tutors and PluralSight will have access to both companies’ libraries at no additional charge, and the 30 employees on Digital-Tutors staff will join the PluralSight team. Additionally, Digital-Tutors chief executive and founder Piyush Patel will join PluralSight as senior vice president of creative operations.
“The whole online e-learning space is going to go through quite a period of consolidation over the next several years,” said Skonnard. “We can raise debt financing and we can pay for a lot of these deals with cash on the books. That’s why you’re seeing [consolidation] happen sooner in the skills oriented training before you’re seeing it happen elsewhere.”