We are all aware of the imperative value education holds in our lives. Its relevance remains constant throughout the years. Yet receiving this very education can prove to be a struggle for many owing to their lack of time or money.
Now imagine how convenient it would be to have access to platforms that can facilitate quality education at affordable rates and even in accordance with the convenience of people who wish to learn. This is exactly what EduTech brings us.
We're long past the days of education is limited to libraries, brick-and-mortar stores, and traditional books. The modern education era throws more spotlight on learning through apps like Udemy, Coursera, or upGrad. These applications have popularized digital education, making them the new trend among students as opposed to the traditional style of learning.
These platforms facilitate a plethora of opportunities, largely because they remove geographical and physical barriers, making education an easier to accomplish phenomenon for learners all over the world. One such platform which has emerged as a renowned success over recent times is Udemy, which is an online-based learning platform that aids students and businesses in gaining the skills they require for their development.
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Through this blog, we will provide you a gist about the platform of Udemy, how it works, its founders, its business model, its funding, its success story, its origin, its growth as well as its revenue model.
“We’re confident that continuous learning — for learning new skills or upskilling to find new employment — is table stakes for the modern world.”
- Irwin Anand, Managing Director for Udemy, India
Udemy is an EduTech company that facilitates a competent platform for self-paced as well as non-degree regulated learning, focusing on both hard and soft skills, to its users.
The platform has about 13 categories namely, finance and accounting, development, business, IT and software, office productivity, personal development, design, marketing, lifestyle, photography, health and fitness, music, and teaching and academics, which are further arranged into subcategories. The company holds a huge collection of content as well as suitable resources for its instructors.
Alongside this, the company facilitates a platform for instructors to expose themselves and sell their developed courses for learners who require them. It also has a variety of courses that are being instructed by subject matter experts in non-English languages, such as Spanish, French, Japanese, Portuguese, as well as German. The company’s activities and courses can be explored by making an account on the platform.
Udemy holds over 40 million students and over 50,000 instructors teaching courses in over 65 languages in over 180 countries.
In case of companies, Udemy for Business facilitates an employee training and development platform for companies with subscription access to 7,000+ courses, learning analytics, and the capacity of hosting and distributing their own content. The platform recently partnered with Betterworks, a leading strategy execution enterprise software company, in the month of February 2021.
Udemy for Government has been set up with the purpose of teaching workers skills and preparing them for future jobs.
How Does Udemy Work?
Udemy is an online learning platform and marketplace focused on students and working professionals. The courses are headed by instructors, who are generally subject matter experts in their respective fields.
The platform provides more than 150,000 courses which include categories like Design, Photography, IT & Software as well as Business and Entrepreneurship.
The platform’s courses take place in the form of lectures, that can include videos, slides, text, or any other resources which the instructor finds suitable. In addition, the instructor can also include activities like assignments, practice tests, quizzes, or coding exercises in order to examine the knowledge gained by the student.
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In contrast to courses by traditional universities, Udemy sets up on-demand courses, which implies that it allows students to enroll and wrap up the courses as and when they wish to.
The students can get an experience of what the courses offer by going through their trailers or even by accessing and finishing the first lecture of that course.
Udemy was founded in 2010 by Eren Bali, Gagan Biyani and Oktay Caglar. Currently, since February 2019, the company is being headed by Gregg Coccari.
The Origin of Udemy
Eren Bali had seeked to fulfil all his education in a schoolhouse through a computer with internet access. By adopting merely these two resources he learned Maths and even ended up winning the National Math Olympiads in Turkey.
As highlighted by Entrepreneur, in the mid-2000s, he had worked as a freelance web developer based in Turkey. While working for various clients, he was also investing additional time and funds into another passion project. In 2007, he developed a software for a live virtual classroom.
Seeing a great degree of potential in his new creation, he saved up the funds to move his base of operations to Silicon Valley, setting up Udemy for his product along with his friends, Gagan Biyani and Oktay Caglar. Eren Bali and his partners had attempted and failed 30 times in gaining the interest of investors. Yet, the initial success of the platform allowed them to raise $1 million in a couple of months. Later, they were aided by Groupon investors Eric Lefkofsky and Brad Keywell in raising additional capital for the thriving company.
It was an extremely tough start. None of us had family money.
They were on visas so could not quit. Worked day jobs from 10am-7pm; then on udemy until 4am.
I was a consultant and flew cross-country every week. 70 hours in DC, slept on plane, then 40-hour weekends in SF.
— Gagan Biyani (@gaganbiyani) February 20, 2020
In May of 2010, the trio launched Udemy publicly using their own resources. The website provided both Free as well as Paid courses that were taught by experts.
Udemy Business Model
- Udemy’s business model is based on charging instructors a fee for every sale of a course that takes place on its platform.
- The fee ranges from 3 to 75 percent depending on how the user gets acquired.
- In addition, the platform charges a yearly subscription that hands businesses as well as their employees access to the firm’s content.
Udemy Revenue Model
The Revenue Model of Udemy
Udemy facilitates two types of courses on its platform – free as well as paid. By adopting a range of precise and crisp free courses on its portal, the platform generates value and enhances marketing through word of mouth. Meanwhile, the paid courses generate revenue.
The platform’s principal revenue stream is the fee that it charges from students as well as instructors for hosting courses. The revenue arrangement is the following :
If the platform promotes the course which has been opted by the student, it gains 50% of the total fees while the remaining 50% is provided to the instructor. Yet if the course has been marketed by the instructor himself then the complete fees will be offered to them without anything going to the platform.
If the platform promotes the course and it is accessed by the student via the affiliate link then 25% of the fee is given to the platform, while the remaining 50% fee is given to the affiliate and 25% to the instructor.
Yet another revenue source for the platform is their B2B solution namely “Udemy for Business”. It offers two plans for each company namely Team Plan and Enterprise Plan.
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Udemy Recent Growth in India
“India has consistently been one of the top markets for Udemy, and our India operations have always been a priority. We have seen a huge rate of growth in online learning in India during the covid situation,"
- Irwin Anand, Managing Director, Udemy.
Udemy has recently observed a rise in its subscriptions this year with a large section of people have stayed at their homes owing to the COVID-19 pandemic and resorted to online learning.
Udemy has observed rising demand from its consumer-faced marketplace Udemy for Business, which has presently gained $100 million annual recurring revenue.
As per a report by Mint, course enrollments for the platform have risen by 200% in the nation as owing to the lockdown people have reclined in their homes and utilized the facilities offered by the platform, adopting it to remain engaged, to enhance their productivity and for gaining knowledge of a new skill. Three courses, namely communication skills (606%), financial analysis (311%), and business fundamentals (281%), from among the 130,000 courses, offered on the platform have faced maximum growth in the past six months. This data is up till October 2020.
“It is clear that in order to be effective, education must be dynamic and meet individuals where they are. Which is their time, their place, and their pace of change. In this big moment of need, gone are the times when you used to herd people into a classroom to get them trained.
Now is the time when, when learning and skill training needs to go to people, where they are in their time of need. Hence, at Udemy we focused on delivering aspects like affordability, accessibility and relevance of skills to maximize the potential of individuals. “
- Irvin Anand, MD, Udemy, India
Udemy Recent Funding
Udemy stands at a present valuation of $2 billion after its most recent funding round.
The platform’s leading investors include Insight Partners, Japan-based educational publisher Benesse Holdings, Stripes, Norwest Venture Partners, and various others.
As per a report by The Hindu on October 30, 2020, the platform has engaged in advanced talks of raising around $100 million in a fresh private funding round which will value them at more than $3 billion.
In November 2020, Udemy raised $50 million (about Rs 371.2 crore) from global Edu-tech and growth funds including Learn Capital.
Prior to this, Udemy had raised around $50 million in its Series E funding round which was headed by Japanese publisher Benesse Holdings. The round took place in the month of February of this year.
“Udemy’s rapid growth in India shows us the level of demand from students, instructors, and companies for affordable skills training. We are dedicated to our mission of improving lives through learning and expanding in India enables us to deliver on that promise,”
- CEO, Udemy, Gregg Coccari.
At its present stage, Udemy’s platform possesses an optimum opportunity of taking its business to greater heights, being equipped with a team that is driven to derive the best from its available resources.