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A chance meeting with US listed company 2U‘s CEO Chip Paucek in October last year set Cape Town based SA edtech startup GetSmarter on the road to being acquired by the US firm in a $103-million deal signed on Monday evening.
Sam Paddock (pictured on right), who is the company’s CEO, said he and his co-founder and brother Rob weren’t looking to be acquired.
“It became clear that joining forces would result in an organisation that could power the world’s best digital education. This was too big an opportunity to pass on,” he said.
The deal, reported by Forbes magazine in an article yesterday includes an earn-out provision of as much as $20m in cash.
‘It was too big an opportunity to pass on’
Founded in 2008 by brothers Sam and Rob Paddock, GetSmarter delivers short-term online certification courses to distance-learning students in partnership with a number of top universities.
Sam Paddock said while the deal was signed on Monday evening he expects it to close only on 3 July, adding that the entire executive team would remain with the company.
When asked about how the deal was valued Paddock said this wasn’t something he is able to disclose.
He said GetSmarter has served over 57 000 students from 150 countries. “We work on a revenue share model with our university partners,” he added.
“There was a transaction (of $5m in venture-capital funding) with DiGame (and not Zouk as earlier reported by Forbes, he said) in 2016, but we didn’t use it to fund our growth. We have bootstrapped the business entirely from founding. We have reinvested profits to fuel growth for many years.
Forbes reported that the company last year made about $17m in sales and has about 400 employees, including performance coaches, technologists and video producers, as well as academic tutors that operate remotely around the world.
Paddock said about 300 of these employees are fulltime, with the balance being part-time tutors and freelancers from around the world.