OTP Bankʼs venture capitalist affiliate PortfoLion Regional Private Equity Fund announced it will provide the Codecool programming school with a EUR 2 million investment, according to a press statement sent to the Budapest Business Journal. Through the capital injection Codeccol aims to continue its international expansion.
In the coming 12 months, Codecool intends to use the equity at its disposal to open two new schools abroad, thus expanding to 1,000 the number of junior programmers it trains in one year. According to the plans of the founders of the company, Codecool schools will be operating in 24 cities in Europe by 2022.
PortfoLion Regional Private Equity Fund invests primarily in Hungarian SMEs that have already been running for a few years, can show stable operations and realistic business plans, and have promising, international growth potential.
“Beyond the Europe-wide presence of market demands, another factor in favor of the investment is that, since its foundation, Codecool has rapidly proved the competitiveness of its educational program on the Hungarian market, and with the expansion into Poland it shows the flexible international adaptability of the training,” says György Simó, investment partner of PortfoLion Venture Capital Fund Management Zrt.
“Our start-up investment perfectly covered the costs of the establishment of the quality educational background as well as the cash-flow demand that goes hand-in-hand with post-financed training,” says Balázs Vinnai, a successful IT entrepreneur and one of the founders of Codecool. “Since our concepts were proven both on the professional and corporate sides, now in two countries, we realized that the time had arrived for a further capital injection necessary for expansion primarily in Central Europe.”
The IT labor shortage in Hungary is currently estimated at 22,000 people, and this figure approaches one million in the EU as a whole, while IT labor force still remains the the most important factor in the future success and business growth of enterprises not only in Hungary but also globally. Experts expect the issue of labor shortage to linger on in the long-term.
Recognizing this trend early on, in 2015 a group of Hungarian private individuals founded the Codecool IT specialist training company, which at the moment operates educational centers in Budapest, Miskolc and Krakow.
Now in four grades, more than 300 students are currently taught programming as well as other skills, ensuring their successful placement within the profession. During the Codecool course consisting of 12 months of theoretical, and six months of practical elements, primarily 18-40-year-olds (career starters or those switching careers) without any previous IT qualifications, are taught programming in coordination with the employer market, thereby guaranteeing graduates a job at the successful conclusion of the course.
In addition to traditional secondary and higher education, this model supplies a high volume of recruits, which can be adjusted to specific corporate demands. The guarantee of a job and the post-financed training model are particularly attractive factors for applicants.
Since 2016, support for programs able to feed the labor market supply indispensable for the digital transformation of business and in society is set down at EU directive level, too. The ITC Association of Hungary (IVSZ) recently presented its Digital Labor Program, in which particular emphasis is laid on the necessity for a targeted and more rapid pace of specialist training. In April, the Hungarian government announced the latest phase of the Digital Welfare Program (DJP 2.0), in which there is a special focus on educational programs answering the demands of the labor market.
“All this indicates that the problem recognized by Codecool early on, and the program offered as a solution to this issue is not only popular among applicant students and employer companies, but now a concern to the profession and regulatory authorities as well,” says Balázs Vinnai, who as deputy chairman of IVSZ has been a committed advocate of this subject for many years.
“In the future, work will be digitalized in every sector and at all levels. Therefore, there is a need for education taking a new approach and offering genuine professional knowledge. This is precisely why alternative school systems similar to Codecool will transform the education market with the same speed and profundity as Amazon.com and online shopping did in the commercial sector,” Vinnai adds.