WHEELING & DEALING
A New Appetite For Learning
By Jean-Marc Levy

First published in HRO Today (April 2004)
 

Corporate training and e-learning are poised for a rebound.
 

Corporate training budgets are notorious for being the first ones to be slashed by organizations in difficult economic times. The last two years proved no exception to the rule, and providers of corporate training services have had to learn new survival skills during dismal years for their industry. For the survivors, though, there is finally some indication that the corporate training market is recovering and is expected to grow robustly over the next several years.

According to research firm IDC’s U.S. Corporate and Government eLearning Forecast - 2004-2007, all three segments of the corporate training market covered in the survey (e learning, business skills training, and IT education services) should see substantial growth over the next five years. In particular, strong increases in e-learning spending should continue to outpace the already robust growth expected for the broader training market.

Three recent transactions, all taking place within weeks of each other earlier this year, illustrate the different ways in which investors and strategic buyers are placing new bets on the corporate training market:

• TechSkills

In January, Chrysalis Ventures led a B-round investment in TechSkills, the Austin-based national provider of IT certification, medical education and general business skills training. Chrysalis was joined in this round by OCA Ventures and Tobat Capital, both current investors in TechSkills.

TechSkills is extremely well-positioned to take advantage of the rebound in corporate training spending with an offering specializing in blended-learning solutions that combine instructor-led training with e-learning solutions. With 30 learning centers across the country and over 100 courses focused on skills-based training or certification, TechSkills clearly hopes to bridge the gap many businesses are expected to face over the next five years as the U.S. educational system comes about 6 million graduates short of the anticipated demand for skilled labor.

• Intrepid Learning Solutions

A few weeks later, Seattle-based Intrepid Learning Solutions announced an additional round of investment led by new investor Rustic Canyon Partners. Existing investors Madrona Venture Group, Buerk Dale Victor, and Staenberg Venture Partners also participated in the new round of financing.

Unlike TechSkills, with its proprietary training centers, Intrepid Learning is a provider of outsourced training services who takes over the management of existing corporate training departments for large clients (like Boeing) and applies a proprietary learning delivery system aimed at improving employee performance cost-effectively. This model should appeal to larger organizations that have invested heavily in “corporate university” models and are now seeking to run these cost centers more effectively.

• Trinity Learning

Finally, in February, publicly-held Phoenix-based Prosoft Training and Berkeley based Trinity Learning announced that they had agreed to merge their businesses.

The merged company combines Prosoft’s line of certification products and services for IT and communications professionals to Trinity Learning’s current training and certification offerings. Prosoft’s Certified Internet Webmaster (CIW) certification program, in particular, is a very well-recognized professional certificate covering IT job-role skills (in web site design and e-commerce, network administration, security, application development, and programming) and earned by individuals in over 100 countries.

According to Harvard professor David A. Garvin, an expert on learning organizations, “At the core of active learning is a deceptively simple requirement: students must be personally invested in the learning process.” Trinity Learning, Prosoft, and the roster of fund managers who invested in TechSkills and Intrepid Learning are in fact betting that investing with their wallets will bring rewards well beyond sheer learning for their investors and shareholders.