Dedicated online learning support and school tutoring company Cluey Ltd (ASX: CLU) is acquiring coding and digital skills provider Code Camp.
Cluey is also undertaking a fully underwritten Placement of $12 million to sophisticated and professional investors. In addition, the company will undertake a fully underwritten SPP to Eligible Shareholders to raise a further $2m.
Proceeds from the Placement and SPP will be used to support the acquisition and growth of Code Camp and assist in funding additional growth opportunities.
Cluey CEO Mark Rohald said Code Camp would help Cluey grow its customer base and provide cross-selling opportunities.
“Code Camp is a well-established business that has attracted more than 100,000 Australian schoolchildren to its school holiday and after-school coding programs since its first holiday programme in 2013.
“As the demand for coding and digital skills continues to grow, we see Code Camp as a great fit for Cluey, building on our existing tutoring and test-prep business.
“This will provide opportunities for us to reach a broader audience by leveraging the leads and active customer bases of both businesses. In addition, we see increased demand for broader learning support services, particularly tutoring and co-curricular educational activities.
“While tutoring is predominantly in demand during the school term, Code Camp provides a counter-cyclical revenue stream in the school holiday periods.”
Code Camp was established in Sydney in 2013 and has delivered coding and digital skill courses to more than 100,000 school children across 350 Australian schools. Code Camp provides holiday camps and after-school programs, delivered face to face or online.
Code Camp engages ~400 teaching staff each quarter to support the delivery of its activities. Code Camp focusses on the primary school market comprising 2.3 million children in Australia. Coding courses account for ~50% of Code Camp revenues, with the balance being other digital skills programs. Pre-Covid, ~5,000 students were attending its camps each quarter.
It has various arrangements to deliver holiday camps at ~120 schools and to deliver after-school programs at ~80 schools.
Mr Rohald said Cluey would integrate Code Camp into its planned launch of the ‘Cluey Academy’ for co/extracurricular learning.
The acquisition of Code Camp will create the first segment of our ‘Digital Academy’, including coding, game design, and animation,” he said.
He said Cluey plans to grow Code Camp’s reach to more than 500 schools by the end of CY23, integrate customer marketing and sales with Cluey, enhance and expand Code Camp’s online offering and develop coding programs for older students.
On a pro-forma basis, Cluey and Code Camp would have generated revenues of $20.4 million in FY21. This excludes an additional $2.4m in Code Camp revenues which were estimated to have been lost due to COVD-19 disruptions.
