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October 25, 2017

Post-Grad Outcomes Driving Change in Coding Academies

MHT Partners  | Education Investment Bank

As an education investment bank providing advisory services to both entrepreneurs and financial sponsors, MHT and its education advisory team are consistently asked about investment opportunities in STEM-related fields, specifically coding. While opportunities exist for investors to acquire coding bootcamps, the number of providers has decreased as graduate outcomes become a large factor in determining the success of many bootcamps.

As background, the emergence of coding academies starting in 2008 was in response to the dearth of coders in the U.S. and across the globe. Coding bootcamps sprung up offering to teach anyone the latest programming languages over eight to twelve weeks for $10,000 or more. With the rapid market growth in the bootcamp market, several of the for-profit universities acquired some of the larger bootcamps, like Kaplan’s acquisition of Dev Bootcamp and Apollo Education’s acquisition of The Iron Yard.

As early as 2014, the writing (or code for that matter) was on the wall regarding the quality of coding education, as some students from leading programs either were not prepared for or could not secure a programming job. This caused many providers to change their business to focus not only on the quality of curriculum but also the caliber of the prospective student. Several coding academies implemented internships and externships to augment the coding experience in the classroom, allowing students to develop on-the-job skills. Further, bootcamps developed more stringent application processes, weeding out applicants that do not meet new minimum requirements. By providing a better learning experience to students that are more uniquely qualified, coding bootcamps are improving the outcomes for their graduates.

In addition, several bootcamps are focusing on graduate outcomes by offering support programs and job placement services. Like more traditional, well-known universities, several bootcamps have developed alumni networks, with graduates working at some of the top technology companies in the U.S. By utilizing alumni networks, bootcamps can place graduates more effectively with leading employers and receive feedback regarding the latest market trends and coding languages.

By focusing on post-graduate outcomes through student vetting, learning and post-grad support, coding academies are changing common perceptions about the industry. Investors who are interested in coding opportunities should focus on the success of graduates, as it will be a telling indicator of the leadership, reputation and broader quality of the asset and potential for growth.

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