Udemy Raises $65M in Quest to Grow Online Learning Marketplace Across the World
The world is Udemy’s oyster, and the San Francisco, CA-based company is looking to grow its online learning marketplace across the globe, fueled by a $65 million Series D round.
The company, which has previously raised $48 million since its founding in 2010, has now surpassed the $100 million VC mark.
The round is led by Stripes Group, a New York investment firm whose portfolio includes other online marketplaces, such as Craftsy, Upwork (formerly Elance-oDesk), Art.com and Pond5. Existing investors Norwest Venture Partners and Insight Venture Partners also participated.
The company has been scaling both revenues and operations. Since raising $32 million last May, Udemy says it has increased revenues by 200 percent, grown its headcount from 55 to 160 employees, moved into a new headquarter in San Francisco’s SOMA district, and opened a new office in Dublin, Ireland.
“Marketplace businesses are notoriously difficult to start, but once they get to a scale, they’re hard to kill,” Udemy CEO, Dennis Yang tells EdSurge. With Stripes Group, he believes the company has “found someone who can help us look around the corner, make connections and scale.” Ken Fox, founder and managing partner of Stripes Group, will join the Udemy’s board of directors.
Two-thirds of Udemy’s seven million students come from outside the US. Yang says the first priority with the new funds is to continue expanding its international footprint: “We are looking to bring the marketplace model to local instructors around the world.” Earlier this March, Udemy partnered with one of Japan’s largest educational publishers, Bennese, to host over 100 Japanese-language courses.
“Building up the marketplace ecosystem takes time,” Yang says. “You can’t just pump a lot of money into it and voilà! There’s a certain amount of gestation and incubation.” One “tactical challenge” for Udemy is dealing with international payment methods, especially in countries where online marketplaces are still emerging.
Udemy was founded on the premise anyone can learn anything, anywhere from instructors around the world. The company currently offers 30,000 courses, and in February shared that classes taught by its top 10 instructors generated $17 million in revenues. The percentage kept by instructors, however, is a determined by different variables, according to Yang. Instructors receive:
- 97% of the course fee if instructors use their coupon codes regardless if a student is new or existing.
- 50% if the student is an existing Udemy user
- 25% if the student comes through Udemy’s affiliate program
The company will also “redouble its efforts for corporate learning solutions” offered through its Udemy for Business program. Over 200 companies, including Lyft, Mixpanel and Goldman Sachs, are using the platform to train employees with both existing content on Udemy and proprietary materials. In addition, the company has awarded 17 “Social Innovation Grants,” each worth $2500, to nonprofits and nongovernmental organizations, including Kiva and Parents for Public Schools, to create a Udemy course.
Focusing on enterprise learning and the overseas learner may be a smart move, especially as the market for learning marketplaces becomes increasingly crowded, with small startups like Curious.com and fast-movers like Pluralsight all jostling for a share of learner’s time and money. There’s also LinkedIn’s blockbuster acquisition of Lynda.com, which Yang has called a “super positive” deal and a validation of Udemy’s mission.
“The first thing people think of online learning is putting traditional academia online,” Yang elaborates. “This [deal] shines a light on lifelong learning as an active, personal enrichment with practical skills. Lifelong learning is really coming out of its shell as its own market segment.”