How does Udemy make money?


Most revenue comes from individuals buying courses, but Udemy’s enterprise arm is growing fast

Online education marketplace Udemy was the first winner of our Vator Splash competition in 2010.

The company, whose name is a combination of “you” and “academy”, hence its original slogan, “academy of you”, allows instructors to create online courses with videos, PowerPoint presentations, files PDFs, audio, ZIP files and live lessons. Meanwhile, courses on the platform can be accessed either through its direct-to-consumer offerings or through the company’s business platform, Udemy Business (UB).

There are currently over 49 million learners on the platform, over 64,000 instructors, and over 185,000 courses in 75 languages. Since its inception, over 73 million users have registered with Udemy. It also has more than 8,600 UB clients from around the world, including 42 from the Fortune 100.

“Our mission is to create new possibilities for people and organizations around the world by connecting them to the knowledge and skills they need to succeed in a changing world. Our marketplace platform, with thousands of up-to-date courses in dozens of languages, provides the tools learners, instructors and organizations need to achieve their goals and reach their full potential,” the company wrote in its S-1 filing with the SEC.

Udemy makes the majority of its revenue from the consumer side, at the moment, but it’s the enterprise side of the business that’s growing rapidly.

On the consumer side, revenue comes from enrollment fees paid by the customer for individual courses. Instructors set the price for their course, so it can be as low as $19.99 or as high as $199.99, and once the student completes it, they get lifetime access to this course, even if the instructor later cancels the course.

The company also offers subscription plans, including Udemy Pro, specifically designed to help students achieve their IT certification goals. When they subscribe to Udemy Pro, which costs $19.99 per month, they get unlimited access to subscription content. There’s also the personal plan, which is a general subscription with access to thousands of courses in hundreds of course topics, including IT, web development, soft skills, business, marketing and design.

“Consumer learners come to Udemy for relevant, affordable, and high-quality content. Our global platform helps meet the learning goals of more than 41 million consumer learners, which include retraining or upgrading, ‘soft skills enhancement and personal enhancement,’ the company wrote. .

“Consumer learners can purchase lifetime access to individual courses on our online platform or they can subscribe to a consumer subscription offer. We analyze the data collected on our platform to better determine the most relevant needs of our learners, helping us match them with relevant courses and learning paths, leading to greater satisfaction.”

In 2021, revenue from Udemy’s consumer arm totaled $331.2 million, or 64% of the company’s total of $518.2 for the year. This represents an increase of 1% compared to 2020.

On the Udemy Business side, corporations, nonprofits, and government agencies purchase subscriptions for their members and employees so they can have access to Udemy’s course catalog, as well as additional features such as single sign-on, analytics and strategic learning. path management functionality. Subscription fees are primarily based on the number of license seats.

“Across our platform’s in-depth content catalog, we’ve curated over 11,000 of the most engaging and relevant courses, purposely selected to meet the needs and standards of these businesses, organizations and agencies. We are subject to a rigorous selection process from a wide range of criteria to determine which courses will be offered as part of our UB offerings, including learner feedback and assessment, subject matter relevance, content quality and instructor experience,” Udemy wrote.

In 2021, Udemy Business brought in $187.0 million, up 81% year-over-year, for 36% of total revenue.

Although the majority of revenue will still come from the consumer side, in the year ahead the company expects a nearly even split: it expects little to no growth in consumer revenue, with revenue projections between 310 and $330 million, while Udemy Business is expected to grow another 70% over the coming year to between $300-310 million in 2022.

Udemy went public in October 2021, raising $412 million. It now trades at $13.74 per share, down 52% from its IPO price of $29.

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