Pluralsight was started in 2004 by four young college graduates who saw an opportunity to improve the delivery of online education, especially ongoing training and ‘upskilling’ to companies with IT departments who needed to stay current in the fast evolving computer software industry. Fast forward 15 years and the online education company now boasts over 18,000 corporate clients, including 70 percent of Fortune 500 companies.
Pluralsight went public in May 2018 and showed great promise, but the stock tumbled from a high of $30 a share to less than $8 a share earlier in the year, shaving market cap by nearly 70 percent. Pluralsight’s CFO admitted in a candid quarterly report call that the company was struggling to regain its footing (and share price) after pandemic related client attrition who now see Pluralsight’s relatively expensive online training as a luxury and not a business necessity.
Enter Robert Smith and Vista Equity Partners who agreed to acquire the under-performing company in an all cash deal. Pluralsight is the second publicly traded education technology company to recently be acquired by a private equity firm. In March, Instructure, the company behind the widely used Canvas learning platform sold for $2 billion.
Vista Equity Partners expects the software training business will rebound. “We have seen firsthand that the demand for skilled software engineers continues to outstrip supply, and we expect this trend to persist as we move into a hybrid online-offline world across all industries and interactions, with business leaders recognizing that technological innovation is critical to business success,” said Monti Saroya, a senior managing director at Vista, in a statement.
The private equity firm will add Pluralsight to a roster of other large education technology companies, including PowerSchool, the most widely used student information system in the U.S. K-12 market, and EAB, an enrollment service provider used mostly by higher-ed institutions.
Should be interesting to see how the corporate culture changes as the strait-laced CEO of Pluralsight, Aaron Skonnard hands over P&L control to the larger than life personality of Robert Smith. One would expect Smith and his investors will demand the kind of expense concessions from Pluralsight that will knock the company off of the “best places to work” lists.