04 Mar Codecool Receives EUR 7,000,000 Investment Capital and Expands in the Region
Codecool, supported by its new partner Integral Venture Partners and its earlier investors Lead Ventures and PortfoLion Capital Partners has received an investment capital of EUR 7 million. This investment allows us to open a new campus in the region in the first half of 2021 already. The challenge created by the labour shortage in the IT sector will persist in the forthcoming years.
44,000 IT professionals could be hired in the upcoming two years in Hungary only, if there were enough candidates with the right skills on the market, according to the survey commissioned by IVSZ, ITM and KIFÜ. In the EU, on the other hand, there were about 825,000 vacant positions in the infocommunications sector in 2020, based on data provided by the European Commission. More than half (58%) of the businesses in the sector claimed that it was challenging for them to find IT professionals with the right skills. Labour shortage in the tech industry may jeopardise the competitiveness of businesses, and therefore, overall economic development, as well.
A solution to this problem is to improve and support alternative IT training programs, besides traditional university courses. The opportunities created by demand for new forms of education have already been recognised by investors, too. Based on an analysis by Dealroom, the value of new capital investments in EdTech increased by 94% in 2020, reaching USD 13 billion.
Targets by 2025: more than 10 campuses, thousands of graduates a year and dozens of corporate training programs
We have completed our third successful investment round by its HUF 2.5 billion agreement concluded with Integral Venture Partners, with financial advisory support by Clairfield. With the EUR 12.5 million capital raised so far in total, Codecool matches up in investments with top European actors on the IT education market (Ironhack: EUR 22m, Le Wagon: EUR 16m). At present, we operate campuses located in Hungary, Romania and Poland, and over 1,000 of our graduates work in tech across Europe.
“The investment enables us to continue our European expansion. We’re planning to enter two new markets this year – we consider Austria, Serbia and Bulgaria. Our target is to operate more than ten Codecool campuses by 2025,” says CEO of Codecool József Boda. “Expansion, however, does not only mean increasing the number of our schools. Further developing our corporate re- and upskilling courses are also in our focus. Our experience shows that executives are increasingly open to train or reskill their existing employees, as it is often time-consuming and costly to find new experts with appropriate skills on the labour market.”
At the same time, we are also continuously extending the range of our open courses. In addition to our full-stack course with a job guarantee, specialised 3 to 4-month online IT courses were added to our portfolio last year. In line with the demands of the labour market, further training programs are under development. The target number of graduates in 2025 will increase to thousands per year.
“Codecool supports a fundamental, long-term macro and labour market trend – the promotion of digitalisation and the increasing significance of programming skills – through a unique and flexible business model. This model puts equal emphasis on the training of high quality coders, and the fast and effective satisfaction of corporate demand for human resources. These, together with the regional coverage and the expansion plans make this company especially attractive for Integral Group and its investors, as education is one of our key focus fields. The partners of our investment fund are from the region, and they invest in innovative, high quality CEE companies. Therefore, Codecool perfectly fits into our growing portfolio”, concluded Investment Executive of Integral Venture Partners, Ádám Szalai.
“Codecool’s 12-month, intensive, practice-oriented programming course is a unique proposition, there is no other course like this at competitors on the local market at the moment. The method is proven: 98% of the more than 1,000 Codecool graduates have already landed an IT job” highlights Ábel Galácz, CEO of Lead Ventures, operator of MOL and MFB invest (Hungarian Development Bank), founders of Enter Tomorrow venture capital fund. According to the investor, Codecool’s market outlooks are even brighter considering the fact that the Hungarian higher education cannot deliver the necessary number of IT professionals, even with an increased capacity.
“As the very first institutional investors of Codecool we have known the team for years now, and our trust in them has always been very strong. For us it was a no-brainer to participate in their 3rd investment round, too. They were able to react quickly and effectively during the pandemic, which is the essential characteristic of a successful scale-up. And they are a key player in EdTech (education technology), which is one of the hottest sectors today. Impacted by the recession, a lot of people feel the need, or are even actually forced in some unfortunate cases to start new careers and further develop their skills. So we believe to see further growth” – added Zsolt Mihály, Investment Manager of PortfoLion Capital Partners, a venture capital and private equity firm with investors like OTP Group and Eximbank.
International contribution to the development of digital skills
In the Autumn of 2020 Codecool, together with leading large corporations like Amazon Web Services and Adecco, started the development of a new, EU level software development skills strategy and curriculum, as founder of European Software Skills Alliance. Via the Alliance the experience of the school in the field of training software developers will not only influence training of IT professionals in the region, but also on the entire continent.
Last year, the achievements of Codecool were also recognised by a top IT forum: the Amsterdam-based The Next Web listed Codecool among the 20 most exciting European companies on its Tech5 list consisting of the most promising scale-up companies.
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