San Francisco-based online education startup Udemy has concluded its second round of funding, bringing in an additional $12 million from entities such as Lightbank, MHS Capital and Learn Capital. The funding round was led by Insight Venture Partners and brings Udemy’s total cash raised to $16 million.
Since the initial funding made the company possible, Udemy – which dubs itself an online education marketplace – has already released over 5,000 courses and created an iPad app to make them more accessible and easier to deploy in an increasingly tech-heavy classrooms.
In total, Udemy claims that over 500,000 around the world make use of its platform, and boasts intense interest both in its free and paid offerings. By marketing paid courses, Udemy separates itself from its major competitors in the online education sector, including Coursera and Udacity, that offer free classes exclusively.
With this news, Udemy has also announced a new hire, Dennis Yang, as president and chief operating officer. Yang explains that Udemy’s marketplace model has led the company to double its courses and grow revenue by 400% in one year. As this space continues to crowd, Udemy’s new funds should help its chances for success.
It is also unique in quickly finding a way to monetize its services with over a quarter of instructors teaching courses through the Udemy platform making in excess of $10,000. The company itself pockets about 30% of the money, and according to Eren Bali, one of the founders, this has led to steady month-to-month growth rates of about 20% since the company’s launch in 2010, assuring investors that the path to profitability is a pretty clear one.
Teachers can offer their classes for free or add a paywall, with the average price for classes falling between $20 and $200. The number of students in each vary, but the most popular classes routinely see more than 500 students. Udemy’s courses are delivered on demand so that adult learners can take them at their own pace, and instructors are able to collaborate with students to build a curriculum for their students from videos, slide presentations, PDFs, documents, articles, links, photos and live conferences.
Although it doesn’t get quite the same amount of press as Coursera, Udemy was actually one of the first companies to bring video-based learning to the masses. Its profile is likely to rise in the near future since it has now begun to pursue partnerships with traditional colleges and universities, and is likely to branch out into what TechCrunch terms “B2B offerings,” such as internal company training.