Udacity buys CloudLabs in its first-ever acquisition to enable collaborative programming

In the market for online education, Udacity remains focused on teaching its students about software development, data science and machine learning. To this avail, Udacity brought out its M&A team for the first time to strategically acquire CloudLabs, a small shop building interactive coding environments that let groups collaboratively code from within their browsers.

You wouldn’t know it from its unassuming name, but CloudLabs was behind Terminal.com, a platform enabling the custom creation of computer programming courses built around an interactive, container-based, command-line interface. Udacity plans to implement the company’s live developer environments in some of its courses. Instructors will be able to inspect code, draw attention to specific issues and screen share with students.

The entirety of the five-person CloudLabs technical team decided to stay at Udacity, making the small purchase something of an acqui-hire. CloudLabs CEO Dr. Varun Ganapathi will be leading the integration of existing features and contributing to future machine learning projects at Udacity.

The integration of the two platforms will make it easier for students to program incrementally and receive feedback along the way. But beyond the timely improvements to make learning to program online more palatable, Udacity also wants to leverage the team’s experience to automate more of its grading and reporting processes.

“We believe that human feedback is going to be super important, but we can make graders more efficient and drive down the final cost for students,” explains Vish Makhijani, CEO of Udacity.

Udacity was intentional in its play to acquire a company developing interactive programming environments. Makhijani noted that his team completed due diligence on a number of competitors in the space. CloudLabs proved its value after Udacity performed a test implementation of some Terminal.com features in its nanodegrees. Udacity has been betting heavily on the development of these short online certificates for hot specializations like deep learning, engineering for self-driving cars and VR development.

“We had a version of this internally and we just saw great bones in what they had and we had done some limited commercial work with them before,” added Makhijani.

Development of Terminal.com will halt as the team transitions into its new roles. The company had reportedly raised $6.12 million in financing, according to an SEC Form D filing. The value of today’s transaction is not being disclosed by Udacity.