Ed-Tech Unicorn Pluralsight Just Filed Confidentially For An IPO

Pluralsight, the Utah-based education startup popular with technology professionals, has filed confidentially for an IPO, the company announced on Monday. Investors have speculated about Pluralsight’s IPO ambitions since 2014, when it raised $135 million in Series B funding and subsequently joined the unicorn ranks with a $1 billion valuation. Two years later, the company raised an additional $30 million and reported revenue of over $100 million.

Rare among unicorns, Pluralsight has been profitable since its founding in 2004. It charges corporations and individuals a monthly subscription fee for access to its proprietary course catalog, which covers topics including JavaScript, MySQL, and Python. To recruit high-quality instructors, Pluralsight pays subject matter experts generous royalty fees based on the number of times their videos are viewed. The most popular instructors have made over $1 million.

Several years ago, the “learn to code” market was flooded with startups. Pluralsight has grown in part through consolidation, snapping up competitors including Smarterer ($75 million), Digital-Tutors ($45 million), Code School ($36 million), and TrainSignal ($23.6 million). Meanwhile, in-person bootcamps like the Iron Yard and Dev Bootcamp were forced to shut down. These days, Pluralsight’s primary competition remains Lynda.com, which LinkedIn acquired in 2015 for $1.5 billion.

“We really focus on the technology professional,” Ryan Hinkle, a Pluralsight investor and managing director at Insight Venture Partners, told Fast Company in 2015, drawing a contrast between Pluralsight and its B2C peers. “It’s about replacing the stack of books that used to sit on every developer’s shelves with content that keeps you at the cutting edge.”

Few Case Studies

Aside from Lynda.com, there are few online education exits to which Pluralsight can be compared. Fellow Utah startup Instructure, which filed to go public in 2015, develops course management software, and does not touch content. Today, Instructure is worth $1.3 billion. Washington, D.C.-based 2U, which went public in 2014, partners with universities to develop online graduate programs and is now worth $4.4 billion.

Companies of all sizes have been allowed to file confidentially to go public since last year, when the Securities and Exchange Commission (SEC) expanded a provision of the Jumpstart Our Business Startups Act. By filing confidentially, a company can fine-tune its pitch to investors while maintaining control over the timing of the offering. In addition, company data remains out of the hands of competitors for the confidential period.

The SEC modified the JOBS Act rule in order to encourage more companies to consider going public. In 2016, IPOs had their worst year in over a decade: just 53 companies decided to list, according to PwC. The global IPO market rebounded in 2017, but many startups, including some of the largest unicorns, continue to sit on the sidelines while taking advantage of easy access to private capital. When startups remain private, retail investors lose out on the wealth that young companies generate as they grow.