Coding-for-Preschoolers Firm Files Bankruptcy After Covid Boom
TL;DR
An education company teaching coding to preschoolers filed for bankruptcy, citing overexpansion during the Covid boom and inability to profit as demand fell post-pandemic. It plans to restructure debt and raise funds to continue operations.
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An education company that helps children as young as three learn to code filed for bankruptcy, blaming an expansion strategy that outpaced its ability to turn a profit.
Conscious Content Media Inc. would eliminate more than half of its $205.5 million in funded debt under a reorganization proposal backed by noteholders, according to court papers filed Wednesday in federal court in Wilmington, Delaware.
The company is among a number of software and other technology firms that got a boost in 2020 from consumers stuck at home during the Covid-19 pandemic, only to see demand wane afterward. In September, education software maker Anthology Inc. went bankrupt after experiencing higher-than-expected customer attrition.
After seeing a pandemic-era jump in demand, Conscious Content borrowed money in 2021 to expand by buying three firms, chief executive Neal Shenoy said in court papers. Those deals also required the company to give a payout in 2026 to shareholders of the acquired businesses, he said.
But when sales fell back to pre-pandemic levels, Conscious Content “could not achieve profitability on the timeline that they expected,” he said.
Under the noteholder proposal, the company would cut $106.5 million in debt and raise $20 million to help pay for its restructuring case and operations.
The company has three main business lines for children between two and 10 years old: Homer, a learn-to-read app, codeSpark, the computer coding platform, and Little Passports, a subscription service that delivers monthly learning packages to families.
The case is Conscious Content Media Inc., 25-12231, US Bankruptcy Court, District of Delaware (Wilmington)