WeWork, the once $47 billion company that was on the brink of a public offering, has been divesting a great number of its assets as it looks to right the course since releasing its S-1, which exposed its expanding costs, among other things, and sent its valuation plummeting.
Today, WeWork is announcing the sale of 100% of the equity in Flatiron School to Carrick Capital Partners, an investment firm focused on software-enabled businesses. Other terms of the deal, such as acquisition price, were not disclosed.
WeWork acquired Flatiron School, a coding academy that offers "intensive and expensive" technical courses, according to founder and CEO Adam Enbar, in 2017. New York-based Flatiron School launched in 2012 and raised more than $14 million from investors like Matrix Partners, CRV, BoxGroup and Thrive Capital before being acquired.
One of the strategic benefits of the merger with WeWork was Flatiron School's access to hundreds of thousands of square feet of real estate space, which is one of the great challenges for startups with physical services.
While the COVID-19 pandemic has temporarily allayed the need for a physical presence, the deal does allow Flatiron School to continue its in-person courses at WeWork locations once it makes sense to return to offices.
The divesture of the educational asset will allow WeWork to better focus on its core business of co-working.
"Over the past number of months, we've actually been really grateful to have received a lot of inbound interest in Flatiron School," said Enbar. "After enough conversations between myself and the WeWork leadership team and with their continued focus on their own core business and our evolution as a school — especially as we increasingly grow, especially recently online — with all of that in mind, we thought it would make sense to kind of pursue conversations about finding a new home for Flatiron School."
Flatiron offers courses in software engineering, data science, cybersecurity and design, operating 11 physical campuses as well as online courses. The company grew its physical footprint from one campus in 2018.
The company has 400 employees and all will stay on through the transition to Carrick Capital Partners . Flatiron School declined to share the diversity and inclusion numbers of its workforce because the company is compiling them and plans to report them both internally and externally in the coming weeks.
Enbar also said that the company has seen 140% growth in graduates since 2018. Since the beginning of 2019, Flatiron School has had more than 1,100 unique employers hire from their pool of graduates, with 93 percent of graduates in 2019 accepting a job offer.
Flatiron School will operate as an independent business under Carrick Capital ownership.
Enbar said that, among the inbound interest in Flatiron School, Carrick Capital stood out because the firm understood Flatiron's mission-driven culture of educating and empowering students to go out and build the career they desire.
"Most people, when we got on the phone, asked about financials and customer acquisition costs," said Enbar. "All of that is important. But the first thing Carrick Capital asked about was our student outcomes. The first person they wanted to talk to when doing due diligence was our head of Career Services. So that went a long way in terms of building a close relationship with them."