What Is Nerdy?
Nerdy is a direct-to-consumer, gig economy platform for online learning. The company was founded by Chuck Cohen, who now serves as chairman and CEO, and is based in St. Louis, Missouri.
The startup is best known for Varsity Tutors, an online tutoring service that takes advantage of artificial intelligence (AI) and data analytics technologies. This segment of the business has benefited from the coronavirus pandemic, which has forced a mass movement toward online learning. In the midst of the pandemic, Varsity Tutors launched a homeschooling offering for its business.
Money and Investors
The company — which is estimated to have between 500 and 1,000 employees — has raised over $100 million to date. After raising $3.4 million in a Series A funding round in June 2014, the startup pulled in another $3.4 million the year after, according to Nerdy’s website.
Then, as it was expanding its services, the company raised a whopping $50.5 million in June 2015 in a Series B round led by TCV and $50.3 million in a Series C round in 2017 from the likes of Learn Capital, Chan Zuckerberg Initiative, and TCV.
Plans to Go Public
Nerdy is planning to use a special purpose acquisition company, or SPAC, to go public. According to TechCrunch, the startup will merge with TPG Pace Tech Opportunities, a SPAC that’s been publicly traded since 2015, with hopes of closing the deal by Q2 of this year.
TechCrunch writes that this deal will value the business at $1.7 billion. The company is estimating that it will raise up to $750 million in cash through the deal.
This business deal comes after a year of major momentum for the company. Furthermore, the coronavirus pandemic has given the business a big boost due to the shift to remote learning. TechCrunch notes that the startup’s annualized revenue surpassed $120 million in the final quarter of 2020 and saw online revenue grow by 87% compared to the same period the year prior. The company is not yet profitable but aims to be by 2023.
Luckily for this startup, it’s one of a minority of industries that have served to benefit from the coronavirus pandemic. Now, the business is looking to harness the momentum for a successful public debut. Looking back at the startup’s history, its business has been successful — a hopeful sign for the future.
About the Author
Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.