Udemy, which launched more than a decade ago, has sold courses to 50 million students through its digital learning platform. But new president Greg Brown sees “exponential growth” opportunities in doubling down on its enterprise arm, which currently has over 7,000 customers.
In a phone interview, Brown said Udemy for Business, the company’s corporate learning arm, “blew through $100 million ARR,” a metric it announced in October.
“One hundred million dollars was very conservative,” Brown said. While he wouldn’t share the latest metrics, he hinted that revenue had grown around 90%, which would put Udemy for Business’ new trajectory around $200 million in ARR. That’s a solid bump, considering it took five years for the arm to hit $100 million ARR, and a much smaller time frame to essentially double it.
Udemy declined to confirm the new ARR total, instead opting to share a slew of other growth metrics to indicate growth, including the fact that it has seen more than 480 million course enrollments and owns over 155,000 courses. The startup said that it has 40 million students, but in 2019 the business said it had 50 million users, based on a previous interview. When asked about the user drop, Udemy said that “we’ve made some changes to our metrics as we grow as a company to better reflect user engagement.”
“The opportunity that the company sees has really forced us to reallocate resources and strategy,” Brown said. While Udemy will “continue to invest” in its direct-to-consumer business, it sees bigger potential in its enterprise product.
Udemy’s focus and success so far with corporate learning piggybacks on what investors see as an awakening among companies that it is necessary to train and reskill employees. The shift within Udemy has been brewing for years, but recent tailwinds have shifted the way the business closes contracts.
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Brown says that their sales cycle usually starts with approaching a developmental organization or experimental team that is looking to upskill their team. Udemy enters organizations on the “tech side” of the house, and then takes that land and expands. But Brown sees the decision-making process to upskill the aggregate employee base as getting largely “centralized.”
It’s proof? Udemy is starting to sell top-down, and already landed a 100,000 employee contract with Cisco Systems. This receptiveness isn’t how things have been done historically, Brown said, and is “largely why” Udemy is throwing more resources (including its latest $50 million funding round) at its enterprise product.
Edtech companies in the United States have traditionally struggled to sell to institutions, thus why many of the most valuable businesses in the sector are consumer businesses. But Udemy, last valued at $3.25 billion, indicates how reskilling is a counterargument to this.
Ashley Bittner, the founding partner of Firework Ventures, believes that employers will need to take on “more responsibility for reskilling their current workforce,” she said as part of a broad investor survey on the edtech sector.
“That training will become job-embedded, rather than only trying to hire to address the challenge,” Bittner said. She sees opportunity in external resources filling in gaps that companies have internally, and that much of the training will have to exist online.
Going forward, Udemy is looking at both organic and inorganic growth, the latter of which suggests that it is looking for acquisition targets. Brown wouldn’t say what those potential targets would need to solve but did say that Udemy is looking for “product capabilities that are going to make it easier for folks to learn in a digital world and improve engagement.”
Brown outlined Lynda (LinkedIn’s learning arm), Coursera and Pluralsight as the closest competitors. In December, Pluralsight was acquired by Vista for $3.5 billion.
“Coursera is doing a lot out there preparing for their IPO,” he asid. “We see them, but we’re not seeing them in every deal, and we’re not even seeing them in every other deal.”
Brown did not confirm nor deny any rumors around Udemy potentially filing to go public.
“When I was talking to the board, they are very invested long term and they’re really not concerned about how fast we can make the company public,” he said. “We’re investing heavily in the strategic side of our business now; more so than being preoccupied with going public.”
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