San Francisco education startup Udemy Inc. has raised $32 million in new venture funding, Chief Executive Dennis Yang said.
Norwest Venture Partners led the Series C investment in Udemy (pronounced like “you to me”), joined by the company’s earlier backers Insight Venture Partners and MHS Capital. The company has raised $48 million in venture capital to date.
Udemy’s online marketplace lets professional educators or anyone with subject matter expertise create, distribute and sell video-based courses online. People who buy or take free courses on Udemy tend to be “lifelong learners” who want to pick up skills for personal or professional improvement, Mr. Yang said. Instructors determine the cost of the courses they offer, and Udemy takes a share of their revenue.
Like other “marketplace” businesses–from stalwarts like eBay and Amazon to newer powerhouses Airbnb, Etsy or UberX–Udemy must satisfy both the supplier side of its business and the buyer side in order to grow.
Mr. Yang says the 55-employee startup plans to use its funding mostly for hiring, including in the U.S. and to open a new, overseas office in a location yet to be determined. But the company will also dedicate some of the funding to developing new course creation tools for mobile and Web users, and features that help prospective and returning students “discover” the best and newest courses available on the platform.
The company is especially focused on international expansion. Mr. Yang claims Udemy has signed up three million students from more than 190 countries today. At least 60% of its site traffic and 45% of its paying customers are from outside the U.S. He did not disclose how many of Udemy’s paying students are native speakers of languages other than English. However, Mr. Yang said, Udemy wants to make itself known to potential instructors who can create courses in German, Portuguése and Japanese, to round out what the site is already offering in English and Spanish. Currently the site has more than 1,000 courses in Spanish of 16,000 available courses total.
Sergio Monsalve of Norwest Venture Partners will take a board seat at Udemy with his firm’s investment. Mr. Monsalve said he expects the company to “continue to expand in terms of seller-development, student acquisition and retention.” He was drawn to Udemy in part because of its mission–to help people improve their skills so that they can get or succeed in a career that they like–but also because it is relatively capital-efficient compared to other education tech ventures. “Instead of trying to become the new Harvard, Udemy recognizes there is value in that system of colleges and universities, and fills in the blanks that they have left,” the investor said. “It is more of a supplement to established institutions that still bring a lot of value in education.”
Other angel- and venture-backed companies that sell online video courses for lifelong learners include AcademicEarth.org, Curious.com, Lynda.com and CreativeLIVE. A range of colleges and universities are also offering free online versions of their courses through partnerships with ed-tech providers like the nonprofit EdX.org, or venture-backed Coursera Inc.
While Udemy does not intend to branch into courses for credit, Mr. Yang said, the company does plan to recruit instructors to create courses in new subject areas, like health care, and to keep existing categories like business, tech and design fresh.