With 150,000 courses ranging from how to win at poker to the beginnings of quantum mechanics, online education startup Udemy is growing during the pandemic.
Gregg Coccari feels torn. The coronavirus pandemic has left tens of millions of people out of work. But the company he runs, the online learning platform Udemy , is thriving. “Of course we are very excited about that,” he says. “But we are also seeing people fired and we see them fighting.”
Many of those people flock to Udemy’s selection of 150,000 online classes, most of which sell for between $ 10 and $ 20. In May alone, the company recorded 25 million new registrations , compared to 9 million the previous May. Its Udemy for Business division , which sells annual subscriptions for $ 360 per user to companies like Adidas and Toyota , is also booming. Among the most popular classes: best practices for Zoom video conferencing and how to manage a virtual team.
From March to May, Udemy sales doubled the total for the same period in 2019, says Coccari. The growing demand is likely to generate revenues of more than $ 400 million this year, according to two sources with knowledge of Udemy’s finances. According to Coccari, Udemy would be profitable if it did not plan to hire 200 people this year and invest in expansion abroad. He already has courses in 65 languages and clients in 190 countries.
Dressed in a wide gray T-shirt, Coccari, 67, is handling things from a room in his 1920s Spanish colonial home in Santa Monica, California. Since the beginning of 2019, when he became CEO, most Mondays he took a 6:30 am flight to San Francisco, where the company is based, or went to one of its branches in Denver, Dublin, Ankara , São Paulo or Gurgaon, India. Now his life mimics a Udemy course, and he’s not excited about it. “Yesterday I had ten hours of Zoom meetings,” he says. “I would like to break my laptop. I prefer human interaction ».
But Udemy is benefiting from global confinement. While K-12 schools and universities struggle to teach online, Udemy is simply opening the key to a pioneering business model. Its platform hosts unaccredited instructor-led courses that independently create videotaped lessons and answer questions by email from students on a Udemy message board. The company collects a portion , usually 50%, of the course fees. Users determine which courses get the most traffic by posting star ratings and reviews.
Founder Eren Bali , 35, who chairs the Udemy board , came up with the idea for the company after growing up in an impoverished town in southeast Turkey, where he pursued his mathematical obsession with researching problems on the Web. He believed that great online instructors did not need sophisticated titles. “We wanted to create a market-based education company where any expert in the world could teach their own course, ” he says. He attempted to launch a live version of the site in Turkey in 2007. He failed, but SpeedDate, a Silicon Valley-based live online dating site, hired him as an engineer.
He and two co-founders started the launch of Udemy in the United States (the name is an acronym for “you” and “academy”) in 2010 after more than 200 funders rejected them. Edtech investor Daniel Pianko of New York-based University Ventures regrets to miss the opportunity. “I thought the idea was too crazy,” he says. Online education at the time was dominated by accredited for-profit giants like the University of Phoenix. “It was a totally revolutionary concept , that someone not affiliated with a university could teach a course,” he says.
Udemy’s early courses included how to earn money playing online poker and how to choose women. But the founders soon realized that coding and business skills, like data science and team building, were more in demand. Those courses represent two-thirds of the Udemy selection. But the platform is still open for anyone who wants to teach. Portrait drawing and Reiki massage courses have been popular during the pandemic .
Competing onlind education sites, including LinkedIn Learning and Coursera , work with university professors (Coursera) or select potential instructors (LinkedIn Learning) and reject most applicants. Conversely, instructors Udemy should only be six elements in a list of verification of minimum requirements as to the post least 30 minutes of video content course. Everything is subject to a list of not-us such as pornography, firearms and expressions of hatred. Some of Udemy’s best instructors earn up to $ 1 million a year.
Coccari says several hundred instructors make at least six figures annually, and that number is likely to double this year. They include Teresa Greenway , 61, who earned $ 12,400 this May from her baking courses. She dropped out of high school and married at age 21, had 10 children, including one son with autism, before escaping her abusive marriage a decade ago. “I had no degree, no work history, and I was quite emotionally abused,” she says. In 2015, he ran into Udemy and organized a three-hour sourdough course .
He now has 13 courses, plus other sources of income, including eight self-published books, which he sells on Amazon . She records all of her Udemy videos in advance. Once published, they run on autopilot. Their only interaction with students is through a Udemy message board where students post questions. Spend 20 minutes a day writing responses. Last year, Udemy accounted for the bulk of the $ 78,000 he earned. This year, he expects his income to double .
Bali retired as CEO in 2014 and the company landed two more bosses before Coccari took office last year. (In 2014, Bali co-founded a San Francisco startup, Carbon Health , where he is CEO.) A Wharton graduate and CEO of serial startups, Coccari’s last job was to head up Milwaukee-based premium pet food provider Stella & Chewy’s. One of that company’s sponsors, Ken Fox of New York-based venture firm Stripes, is an investor in Udemy and a member of the board. He asked Coccari to take over as CEO and manage the expansion of Udemy.
In February, Coccari closed a $ 50 million investment from Benesse Holdings , the Tokyo-based senior education and care conglomerate that owns Berlitz language schools. The deal brought Udemy’s total capital invested to more than $ 200 million and increased its valuation from a total of $ 710 million to $ 2 billion. Although Japan’s pandemic blockades were less restrictive than those of other countries, Udemy’s Japanese revenue in the first five months of 2020 tripled sales for the same period in 2019 , according to Benesse CEO Tamotsu Adachi.
Coccari is cautious in predicting how the pandemic will shape the future of education. But online learning cheerleaders like Chicago edtech investor Deborah Quazzo of GSV Ventures believe the virtual education market will hit $ 1 trillion in 2026 , more than double what it had expected before the pandemic. She says Udemy is about to increase in size and regrets not having funded the company. “I was stupid,” she says.
Coccari says he is concentrating on the present. “We are really focused on making sure we can handle these massive spikes in traffic,” he says. “We don’t know what the world will look like at the end of all this.”