Education Platform Nerdy To Go Public By Merging With SPAC

Education gig economy platform Nerdy Inc. has struck a deal to go public by merging with TPG Pace Tech Opportunities, a special purpose acquisition company (SPAC), according to a Friday (Jan. 29) announcement.

“We’re transforming how people learn at all age levels, from kindergarten to professional. With our new partners at TPG, we anticipate further investing in growth and expanding the breadth and reach of our platform,” Chuck Cohn, founder, chairman and CEO of Nerdy, said in the announcement.

Nerdy’s multi-format learning platform encompasses over 3,000 subjects and includes individualized teaching, live group classes and adaptive self-study technologies. Its infrastructure relies on artificial intelligence (AI) and a database of prior interactions to “source, evaluate and match” students to experts with a high level of knowledge in any given field.

“Nerdy is poised to break out as it disrupts a large market where online adoption has lagged. We look forward to collaborating with Chuck and the talented Nerdy team in their transition to the public equity market,” Karl Peterson, chairman of TPG Pace Tech Opportunities and managing partner of TPG Pace Group, said in the announcement.

Nerdy’s annualized revenue exceeded $120 million in the second half of last year, according to the announcement, which noted that the firm experienced 87 percent online revenue expansion, 169 percent paid online sessions expansion and 59 percent online paid active learner expansion in Q4 2020 on a year-over-year basis.

The merger values Nerdy at a roughly $1.7 billion post-money equity value, according to the announcement. Nerdy is anticipated to possess roughly $300 million in cash once the deal closes and is assuming no redemptions by TPG Pace Tech Opportunities shareholders.

As previously noted in this space, digital education platforms are attractive to subject matter experts seeking to monetize their knowledge in addition to students who want to learn from professionals. The pandemic is fueling increased demand for digital learning as an alternative to in-person teaching.