Udemy Raises $100M at $3.32B Valuation

The realm of online learning has experienced significant attention this year, as individuals increasingly utilize e-learning platforms to address educational needs stemming from school and workplace closures, social distancing measures, and increased time spent at home due to the COVID-19 pandemic. This trend is fueling substantial growth for education technology companies, which are actively seeking funding to capitalize on this expanding market.

Recently, Udemy – a platform offering a vast library of over 130,000 video courses in 65 languages, covering subjects from Python programming and photography to mindfulness and business analytics – is reportedly securing up to $100 million in a Series F funding round. This investment could potentially value the company at as much as $3.32 billion.

(Update: The company has confirmed raising $50 million in this round, with Learn Capital, Tencent – the owner of WeChat and a prominent gaming company, and a frequent investor in American technology firms – among the participating investors. It remains uncertain whether Udemy intends to secure additional funding or if the round is now complete, and why the initially filed amount differed from the final sum.)

Details of the funding round were initially identified by Justin Byers and the team at Prime Unicorn Index. The status of the round – whether it has been finalized and if the full amount has been raised – is currently unconfirmed.

When contacted for comment, Udemy acknowledged the report but refrained from providing further details. A company spokesperson stated via email, “We maintain a policy of not commenting on speculation.” They added, “We have no comment at this time, but will provide an update if the situation changes.”

This potential fundraise represents a significant step for Udemy, which concluded its Series E funding round earlier in the year – a $50 million investment that resulted in a post-money valuation exceeding $2 billion.

However, that funding occurred in February, prior to the widespread impact of the novel coronavirus. Since then, businesses focused on education have witnessed a surge in demand starting in the spring, attracting increased investor interest in promising companies within the sector.

Recent investment activity includes Udacity’s $75 million debt round and announcement of profitability. In October, Kahoot secured $215 million from SoftBank. Furthermore, in September, Outschool raised $45 million (and is now profitable), Homer obtained $50 million from a group of strategic investors, Unacademy secured $150 million, and Byju’s, a leading education company, received $500 million from Silver Lake.

These represent only a portion of the recent financial activity; numerous smaller fundraises, new edtech startup launches, and other indicators of growth are also apparent. (Prime Unicorn also reported that Duolingo is currently raising funds, potentially up to $35 million, which would value the company at $2.21 billion if all shares are issued. Further investigation into this matter is ongoing.)

During Udemy’s previous funding round earlier this year, the company’s business division president reported 50 million students utilizing the platform’s à la carte course purchasing model. Additionally, enterprise clients – including companies like Adidas, General Mills, Toyota, Wipro, Pinterest, and Lyft, totaling over 5,000 organizations – subscribe to the platform’s services.

The number of business users has since grown to over 7,000, and total course enrollments have reached 400 million. This expansion may be a key factor driving Udemy’s current fundraising efforts.

However, the details of this latest round, including the specific investors involved and the intended use of funds, have not been disclosed.

As noted during the February funding round, the investment came from a single strategic investor, Benesse Holdings, a Japanese educational publisher and Udemy partner in Japan. Benesse develops educational content for various age groups and brands, including Berlitz, and collaborates with Udemy to create content for these initiatives.

Other investors in Udemy include Stripes, Naspers (now Prosus), Learn Capital, Insight Partners, and Norwest Venture Partners.

Prime Unicorn Index highlights that the terms of this Series F round include a “pari passu liquidation preference with all other preferred, and conventional convertible,” meaning investors will not receive additional proceeds alongside common stockholders. They also noted that Udemy’s current share price is $24.13, representing an increase from the $15.57 price per share in the Series E round.

We will continue to update this article as more information becomes available.