Udacity Raises $15 Million in Latest Funding Round

Those who have been following recent developments in higher education are familiar with claims of how revolutionary a force technology has proven to be in the sector. From massive online open courses to blended learning and online education, everything that has previously been taken for granted about what it means to “go to college” is being rapidly redefined and changed.

One of the earliest agents of that change has been a startup called Udacity, founded by former Google VP Sebastian Thrun. The company offers college-level computer science classes online – and for free — that regularly draw hundreds of thousands of students each. Referring to the company’s pedigree, CNET calls the courses “Stanford-quality.”

For Thrun, Udacity’s aim isn’t just to rewrite the rules of higher ed, but to revolutionize education around the world. He sees his company as a tool that will bridge the gap between “the first world and the third world.” It’s an ambitious goal, and the company has found some assistance in its latest round of fundraising – let by Andeessen Horotwitz – that recently concluded after bringing in $15 million. This brings the total money invested in the company since its launch to $21 million.

You might remember Thrun’s story: A year ago, Thrun put his introduction to Artificial Intelligence class online for free, to anyone who wanted to take it alongside his undergraduates. The upshot: More than 160,000 students from 190 countries enrolled. That led to a flurry of attention, and pushed the race to offer so-called “massive open online courses” (MOOC); other contenders include the not-for-profit edX and the for-profit Coursera. Unlike Udacity, however, those are aligned with various universities, which, understandably, are feeling the pressure to figure all this out.

Thrun knew a revolutionary idea when he saw it, so he left Stanford and, together with two other academics and scientists, started Udacity.

There are several things that make the company stand out from its competition, the most important of which is the way they deliver their courses to the student. Instead of viewing a previously taped lecture, students watch short videos interspersed with interactive tasks. The courses also don’t have a start or end date, with students being able to begin a class and then pick it up again months or even years later to continue exactly where they left off.

Thrun is also committed to keeping courses free, although business models are emerging. There are fees for certified tests. Udacity just announced that six tech companies – Google, Microsoft and Autodesk, among them — are sponsoring courses in areas where they need more skilled workers, from HTML5 for game development to 3D graphics programming. And Udacity has become a way for companies to find tech talent; about 350 companies have signed up for access to 3,000 resumes, and they pay Udacity when they make a hire.