Codecool, one of the top programming schools and IT Talent Hubs in Central Europe has closed an investment round of EUR 7 million. The company, which offers a revolutionary model for training IT specialists, through its 3 to 12-month courses, plans further expansion and product development, supported by its new VC partner Integral Venture Partners and its earlier investors Lead Ventures and PortfoLion Capital Partners. The programming school will also open two new campuses in Central Europe this year.
The challenge created by the labour shortage in the IT sector will persist and further intensify in the forthcoming years. According to estimates, in 2020, there were about 825,000 vacant positions in the information and communications technology sector in the EU, based on the European Commission’s data. More than half (58%) of the businesses in the industry 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.
On top of that, Central Europe has evolved to be one of the most attractive IT outsourcing destinations for the U.S. and Western European partners, matching traditional IT offshoring and outsourcing hubs like India or China, in key aspects such as service quality, work reliability, knowledge and innovation.
The growing demand for up-to-date, practice-oriented IT specialists in the region also contributes to this trend.
A solution to these challenges is to improve and support alternative IT training programs, besides traditional university courses. The opportunities created by the 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.
Codecool – founded by Hungarian businessmen in 2014 – completed its third successful investment round by its EUR 7 million 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, the programming school operates campuses located in Hungary, Romania and Poland, and over 1,000 of its 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, Codecool is also continuously extending the range of its open courses. In addition to its full-stack course with a job guarantee, specialised 3 to 4-month online IT courses were added to the portfolio of the school last year. In line with the demands of the labour market, further training programs are under development. In 2025 the target number of graduates from the programming school will increase to several thousand 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”
-concluded Investment Executive of Integral Venture Partners, Ádám Szalai.
“In offering 12-month long intensive and practice-oriented programming courses, Codecool has currently no competitor in the Hungarian market. 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, funded by MOL and MFB invest (which are also founders of Enter Tomorrow venture capital fund). According to the investor, Codecool’s market outlooks are even brighter considering that 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. 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. Consequently, we strongly believe in further growth” – added Zsolt Mihály, Investment Manager of PortfoLion Capital Partners.
In the Autumn of 2020 Codecool, together with leading large, multinational 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 the 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 collecting the most promising scale-up companies.