Cape Town Start Up Bought for $103 million

GetSmarter enters into million dollar partnership

Last Update 5 May 2017

On 2 May 2017 2U Inc., one of the world leaders in  online education announced that they have entered into an agreement to acquire GetSmarter - a Cape Townian started online education platform.

GetSmarter was founded in 2008 by Sam and Rob Paddock , and in 9 years has become one of the leading online education platforms in the world. Inspiring when you consider the brothers began with the system only offering Wine Evaluation courses but now boasts premium online courses from institutions like Harvard and Cambridge University.

The focal point for both 2U and GetSmarter is the delivery of high-quality, high-touch digital higher education from world class universities and colleges. GetSmarter has been providing engaging online courses and content for almost a decade and with the 2U acquisition it looks to grow exponentially as an educational online platform.

2U will be acquiring GetSmarter in an all cash transaction for $103 million (almost R1,4 billion) on condition that  certain prices change and  earn-out payments of up to $20 million in cash are completed. These payouts are  dependant on GetSmarter’s financial outcomes in 2017 and 2018.  

Barring further closing negotiations, the deal is set to close at the end of 2017. GetSmarter was 2U’s  choice  due to its impressively high student course completion, which is said to approximate  an average of 88%. Christopher Paucek, CEO and Founder of 2U expressed  that this statistic was, “truly remarkable”.

Sam Paddock, Co-Founder and CEO of GetSmarter stated that “"In 2U we ] have found a partner who makes us ] stronger. They bring deep experience and access to capital that allows us  to pursue stellar growth and stand out student outcomes at scale”

GetSmarters revenue was approximately $17 million (about R227 million) for 2016 which was primarily generated by students who enrolled in existing programs. 2016 and 2017 has seen significant acquisitions of and growth by GetSmarter and has therefore led to a substantial increase in the amount of courses offered to students. This Cape Town and London based company is going from strength to strength and with the 2U partnership it can only get better.

By Tarina Meiring

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