Online education platform Nerdy to go public via $1.7bn merger with TPG Pace Tech

Online education platform Nerdy is set to become a publicly listed company via a $1.7 billion worth merger deal with TPG Pace Tech Opportunities, a special purpose acquisition company (SPAC).

TPG Pace Tech Opportunities is a publicly-traded company owned by global alternative asset firm TPG.  In its October 2020 initial public offering (IPO) TPG Pace Tech Opportunities raised $450 million.

Nerdy, on the other hand, has built an online learning platform for enabling the delivery of live learning for people of all ages, covering 3,000 plus subjects and various learning formats.

The online education platform from Nerdy includes one-on-one instruction, live small and large group classes, and also adaptive self-study tools.

Its platform makes use of artificial intelligence (AI) and a database of past learning interactions for sourcing, evaluation, and matching experts to learners.

Nerdy’s marketplace is said to give flexibility and collaborative tools to experts for connecting with learners, and the scope to earn income from home.

Online education platform Nerdy to merge with TPG Pace Tech Opportunities. Photo courtesy of Business Wire.

Chuck Cohn – Founder, Chairman, and CEO of Nerdy said: “We have built a proprietary AI-driven multi-format learning destination, leveraging the strong foundation of our flagship business, Varsity Tutors, one of the nation’s leading platforms for live online tutoring.

“What is so unique about what we have done is scale quality across thousands of subjects, multiple learning formats and tens of thousands of experts. Our direct-to-consumer, curated gig economy model allows us to deliver a high-quality learning experience at scale.

“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.”

In the second half of 2020, Nerdy’s annualized revenue is said to have crossed $120 million.

After the completion of the merger, and assuming no redemptions by the stockholders of TPG Pace Tech Opportunities, Nerdy is likely to have nearly $300 million in cash.

Nerdy will be backed by a fully committed private investment in public equity (PIPE) of $150 million from institutional investors such as Franklin Templeton, Koch Industries, Healthcare of Ontario Pension Plan, and Learn Capital.

Greg Mrva – President of TPG Pace Tech Opportunities said: “Nerdy is a leading gig economy marketplace delivering live personalized learning at scale.

“Nerdy’s product expansion and focus on scaling quality through AI and machine learning, combined with the powerful network effect benefits of its unique network of both experts and learners is driving outstanding momentum through accelerated user and engagement growth.”

The deal, which is subject to approval from TPG Pace Tech Opportunities’ shareholders and other customary closing conditions, is likely to be wrapped up in early Q2-2021.