Lepaya raises $38M
A corporate training provider with a taste for M&A
Public Data
Company: Lepaya
Press Release: Silicon Canals
Market (geography): Global
Market (industry verticals): Corporate training
Customer demographic: Enterprise
Leadership Team: René Janssen, Peter Kuperas
Investors: Endeit Capital, Educapital, Mars Growth Capital, Liquidity Group, Target Global, Mediahuis Ventures
Business in brief:
Lepaya delivers large-scale training programs for corporates, focused on “power skills” – a combination of soft and hard skills. Its hybrid all-in-one capability platform includes microlearning in the flow of work, VR training, an AI-coach to practise new skills and in-person encounters. With this new investment round, Lepaya wants to enhance its AI tools and data analysis capabilities; the Dutch edtech company says it will accelerate the development and adoption of an AI coach, which will adjust learning content to an individual learner’s context and career level, and more sophisticated skills data analysis.
Public business data:
To date, the company has raised more than $80M in funding from various investors
More than 500 clients, with learners across more than 120 countries (company-provided)
Customers include Roche, ING, Microsoft, Dell, KPMG and Freundenberg
281 employees (Pitchbook)
ETCH Assessment
Bull case:
While the wider edtech market has struggled to attract funding in the last few years, Lepaya has had a stellar 2023 so far. This latest raise is the biggest corporate edtech funding round in EMEA this year, and follows the purchase of German leadership training provider Krauthammer in May. It further strengthens Lepaya’s position in the region after three earlier acquisitions – SmartenUp (2020), vCoach (2022) and SpeakFirst (2022) – and a tripling in revenue since its $40 million Series B round in 2021.
The global corporate training market was worth an estimated $600bn in 2022 and that figure is expected to grow to $850bn by 2030. According to the World Economic Forum, 50% of employees will need reskilling by 2025. A third of all jobs — more than 1.2bn employees worldwide — will be affected by automation technologies in the next decade, yet only 30% of those at risk of job displacement received training in recent years. For organisations, a tight labour market and unemployment rates near all-time lows means that upskilling an existing workforce instead of hiring externally now looks like a more attractive route.
Still, closing skills gaps is much easier said than done. Organisations need support to identify future skills needs and to build contextualised pathways to solve them. McKinsey’s 2023 State of Organizations report identifies a ‘capability chasm’, where issues include the fact that learning and development often isn’t integrated into employees’ on-the-job experiences and that organisations don’t adequately measure desired learning outcomes or link learning outcomes directly to business outcomes.
Is Lepaya poised to exploit this? The corporate training market is highly fragmented and still dominated by traditional in-person training. As a challenger in a crowded market, Lepaya has already built an impressive clientele, with more than 200 clients including ING, Dell, Maersk and KPMG. Lepaya has also scaled internationally, with a significant presence in crucial European countries: the UK, France, Germany, Netherlands. This enables them to deliver whole training programs, at scale and internationally for large corporates, a key advantage in such a fragmented market. Lepaya has also built a strong M&A strategy to accelerate growth, expand to new markets and launch new/augmented products. This consolidation in the EMEA market, coupled with global and US-based customers, should mean that Lepaya is primed for growth in other regions.
Bear case:
At the level of product, proving business impact is the golden ticket in corporate L&D, yet there is no obvious frontrunner in the space yet. Achieving impact at scale will mean moving away from traditional but ineffective L&D metrics (such as engagement and user satisfaction), and mobilising data-driven insights that capture the efficacy of learning in relation to individual and organisational goals. In its AI-powered bid towards full alignment of L&D with business KPIs, Lepaya will soon start to nestle up against big competitors in this space – such as Axonify, Coursera for Business, Degreed and more – who have built vast proprietary datasets over many years.
The corporate training ecosystem may be big but it’s crowded and heavily fragmented. To scale across multiple regions brings a host of linguistic, cultural and legal considerations that need to be navigated in increasingly challenging conditions. The shift to a truly skills-based talent management approach is a massive piece of work that is changing rapidly. At a global scale, the task is made even harder by inconsistent skills taxonomies and different ways of tagging jobs and learning content to skills – which makes it very difficult to create clear upskilling and reskilling pathways built on that taxonomy. Generative AI is expected to further complicate this process, bringing new skills to the forefront. The problem is solvable but it’s not easy, and it won’t be solved by one company alone. Different stakeholders (industry, ministries of education, credit organisations and higher education institutions) will need to work together.
In the company’s words:
We wrote this post using the information publicly available to the ETCH team. If you are a member of the Lepaya leadership team, we welcome your feedback! We will update this post to include any commentary you feel appropriate in this section.
Email matt@etch.club for more information
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