Today San Francisco-based Udemy, an online education marketplace, announced that it closed a $12 million Series B round led by Insight Venture Partners, with additional participation from Lightbank, MHS Capital, and Learn Capital, bringing the startup’s total funding to date at $16 million. Since originally launching the platform in 2010, the company now offers over 5,000 courses. The bulk of the funding will be used to expand its growing list of content offerings, and extending its catalog across new platforms, having only recently released its iPad app.
Udemy president and COO Dennis Yang, who was also recently brought on to head the company, spoke with BetaKit about the recent funding and Udemy’s approach to providing quality content online. “We really stick to our marketplace model which allows us to generate the most amount of content relative to anybody else,” said Yang in an interview. “We’ve seen a large uptick in both the supply side of the content and the user side as well. We’re tapping into this unmet demand of folks out there looking to develop their skills.”
With courses on topics including business, technology, and lifestyle, the company lets experts, publishers, and universities create and sell their courses online, and helps a user base of over 500,000 students to learn on demand. Courses consist of a number of interactive and traditional mediums ranging from videos, slides, and PDFs to documents, articles, and photos. It does have some quality control measures in place to ensure the content is worthwhile for the end consumer akin to the Apple App Store, where each course is reviewed and instructors are given feedback on how they could rework or enhance what they’ve put together.
Although instructors can choose their own prices, they have to be approved by Udemy, at which point if it’s a paid course, the platform keeps 30 percent of the earnings, and nothing if the course is offered for free. Yang mentioned that roughly 75 percent of the courses on the platform at this time are offered for free.
The online course market is getting plenty of institutional and investor attention, both for startups providing courses from educational institutions and everyday experts. Udacity, another online learning platform founded by a Stanford professor, just raised $15 million in October, and other major competitors include another Stanford professor-founded platform Coursera, in addition to edX, a joint collaborative effort by folks at Harvard and MIT. There are also more consumer-focused online learning platforms like Treehouse, and BenchPrep which recently moved to a subscription model.
According to Yang, Udemy’s key differentiator is that it provides a blend of both academic and skill-based courses. It is also in talks with several higher education institutions interested in leveraging its content for their curriculum, in addition to delivering their own content because of their reach to the mass consumer market. When asked about the possibility of accreditation, Yang added that it was inevitable but it would never be Udemy giving out certificates but rather the content owners themselves. With the funding secured, the platform will look to build additional mobile apps, and will have to continue to set itself apart with both volume and the quality of content as online learners continue to have an increased number of available options.