Not too long ago, Bill Gates said that in the future, all education will be online (he also implied that funding for the liberal arts and humanities should be cut, but I’m going to pretend I didn’t hear that). One such platform is demonstrating just how democratic education can be. Udemy, the online education platform that lets anyone teach or take a course for free (and 2010 Vator Splash winner), announced Wednesday that it has raised $3 million in a Series A round led by Lightbank (the Chicago-based fund that first backed Groupon), with help from MHS Capital and 500 Startups. The company raised $1 million in seed funding in August 2010.
Launched in May 2010, Udemy currently offers over 6,000 courses on subjects ranging from how-to guides to academic lectures, and is doubling its traffic and revenues each quarter. And while anyone is free to teach a course, the site is drawing some heavy-hitters on the teaching side, from New York Times bestselling authors to Stanford University professors.
A quick glance at the site shows just how variegated the courses are. The site currently has Mark Zuckerberg teaching a course on product development and Marissa Mayer teaching a course on entrepreneurship, while other courses include Psychology 110 at Yale University, Spanish for Beginners, 14-Day Total Yoga Body, Jewelry Making, and even a course on tournament poker theory.
Over 90% of the courses on Udemy are free, and co-founder and President Gagan Biyani told me that the company’s revenue comes solely from the 10% of courses that are paid. He also said that the returning user rate and completion rate are well above the industry average, but he declined to give specific numbers.
“Needless to say, it was a data point of importance to Lightbank as they were evaluating about our business,” he said. “We are lucky enough to have loyal users who love learning new things on Udemy.com.”
Udemy expects to sell over $1 million in courses this year.
“We have been looking for a company like Udemy for a while to provide an online video platform for anyone to be a teacher or student through online video,” Lightbank principal Bill Pescatello told me. “The addressable market is massive and every instructor can be an empowered marketer for Udemy and themselves. Finally and perhaps most importantly, we really believe in the founders. The founders have a long history of entrepreneurial and personal success (one having started college at 15 and another starting his first successful business at 16). They live and breathe this business and they could not be more passionate about what they are doing.”
Pescatello added that the future of education is online, and younger users are demanding new tools beyond static text from which to learn. “These younger users search out video before other mediums and learn from online video more than ever before,” he said.
The result: platforms like Udemy, which democratize learning and teaching, have the unique opportunity to bridge between formal and self-directed education.