According to a recent HolonIQ study, the global online and offline education market was worth $2.6 trillion across K-12, higher education, corporate training, and online learning in 2019. Most of this instruction was conducted offline before the pandemic. However, the pandemic has accelerated the transition of corporate training, and in some cases, higher education, to the online medium. San Francisco-based Udemy, which went public on Nasdaq last week under the ticker UDMY, estimates that its market opportunity in online learning is $223 billion of which the global corporate opportunity is $71 billion and the global consumer opportunity accounts for the balance $152 billion in 2021.

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Udemy’s Offerings

Udemy was founded by Eren Bali, Gagan Biyani, and Oktay Caglar in 2010. Eren had tried to set up a live stream version of Udemy in 2007. However, when it was not very successful, he dropped the idea for then and joined SpeedDate as an engineer out of Silicon Valley. For the next two years, Eren and his co-founders bootstrapped to set up Udemy. When Gagan attended my roundtable in 2011, Udemy had a very modest list of 150 completed courses on the site, with only about 10 of those monetizing.

Today, Udemy boasts of more than 44 million learners, 65,000 instructors, and 594 million course enrollments. It has a portfolio of customers like Adidas, General Mills, Toyota, Wipro, Pinterest, and Lyft who are developing and administering subscription-based professional development courses on its platform.

Over the past few years, Udemy has created a flywheel of content creation, engagement, and continuous content optimization. Its expert instructors continuously generate new courses and update existing ones, while its marketplace encourages engagement on the in-demand topics. The increasing volume and frequency of these interactions allow Udemy to generate meaningful insights that provide real-time feedback and analytics for these instructors. This data, in turn, helps instructors improve quality and content for their learners, thus accelerating the entire cycle of course development and consumption.

Udemy has over 17,700 free courses that act as an important entry point for learners. Through this free content, it has been able to build a large and cost-effective top of the funnel for both consumer and business leads. Once learners interact with its platform, Udemy’s ML algorithms recommend courses for learners that can be purchased. The algorithms help drive revenues for Udemy and content creators while offering higher value to learners. More than 3.7 million free learners have converted to buyers.

Additionally, Udemy also offers unlimited access to a curated catalog of courses through its Consumer, Enterprise, and Team subscription plans. Learners can access these plans for a monthly fee or an annual Enterprise license.

Udemy has also been expanding within the enterprise segment. Recently, it launched Udemy Business Pro, an expansion of its corporate learning segment. Udemy Business Pro will allow Udemy Business customers to improve their technical skill development with in-depth learning experiences for their employees through new features like Udemy Paths, skills assessments, workspaces, and hands-on labs across critical skills in Information Technology, Software Development, and Data & Analytics. The service will initially be focused on IT, Software Development, and Data & Analytics skills, and will help deliver more personalized, in-depth guides to these customers.

Udemy’s instructors have access to its entire 44 million learner-base. Last year, its paid instructors earned $161.4 million from Udemy for their courses, with average paid instructor earnings of $2,950. More than 9,000 global instructors earned over $1,000 in earnings. For the six months ended June this year, its paid instructors earned $86.8 million from Udemy for their courses, with over 6,000 global instructors receiving more than $1,000 in earnings.

Udemy’s Financials

Udemy recently went public and revealed some of its financials. Its revenues grew 55.6% to $429.9 million for fiscal 2020 and during the same period, net loss grew from $69.7 million to $77.6 million. For the six months ended in June this year, it reported revenues of $250.6 million, growing 24.5%. Net losses fell from $52.5 million to $29.4 million in 2021.

Udemy’s Acquisition

Recently, Udemy announced the acquisition of Pennsylvania-based CorpU. Founded in 1997 by Alan Todd, CorpU integrates social media, Web 2.0, cloud computing, and mobile technologies to seamlessly connect employees to solve problems, generate ideas, teach and learn, and capture knowledge. The acquisition will allow Udemy to deepen its learning offerings with CorpU’s immersive learning experiences that foster innovation, leadership, and business agility. Prior to the acquisition, CorpU raised $4.5 million in one round of funding led by Penn Venture Partners, Red Eagle Ventures, and SuRo Capital. Terms of the acquisition were not disclosed.

But Udemy faces stiff competition from other players in the market that offer similar services. There is direct competition from corporate training solutions such as LinkedIn, Pluralsight, and Skillsoft. There are direct-to-consumer training vendors like recently listed Coursera, and there are specialized content training providers such as Skillshare. Add to that the plethora of free online resources that can be used to acquire knowledge.

Udemy went public in late October. Prior to going public, it raised $311.4 million in 19 rounds of funding from investors, including Benesse, Manhattan Venture Partners, Prosus & Naspers, Insight Partners, Stripes, Norwest Venture Partners, MHS Capital, and Learn Capital. It raised $421 million from its listing by selling stock at $29 apiece at a valuation of $4 billion. Currently, it is trading at $29.46 with a market capitalization of $3.93 billion.