Learning

A New Appetite for Learning

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

by Jean-Marc Levy

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 IDCs U.S. Corporate and Government eLearning Forecast2004-2007, 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 during 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 businessskills 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 elearning solutions. With 30 learning centers across the country and more than 100 courses focused on skillsbased training or certification, TechSkills clearly hopes to bridge the gap many businesses are expected to face during 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 in a cost-effective manner. 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 Phoenixbased Prosoft Training and Berkeley-based Trinity Learning announced that they had agreed to merge their businesses.

The merged company combines Prosofts line of certification products and services for IT and communications professionals with Trinity Learnings current training and certification offerings. Prosofts Certified Internet Webmaster certification program, in particular, is a very well-recognized professional certificate covering IT job-role skills (in Web-site design, e-commerce, network administration, security, application development, and programming) and has been earned by individuals in more than 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.

Continue reading →