Online Learning Company Udemy Plans October IPO

BY: Kate Clark

September 24 2021

Udemy, a San Francisco–based startup that sells online courses to individuals and businesses, is preparing to file paperwork for an initial public offering whose listing could come as soon as next month, according to two people with direct knowledge of the matter. The company, which raised $50 million at a $3.3 billion valuation in November, is targeting an initial valuation of between $6 billion and $8 billion, one person said. 

After the coronavirus pandemic pushed more people to experiment with online learning, education technology companies have tried to capitalize on the new growth to raise money from outside investors. Online learning companies Coursera and Duolingo went public earlier this year. Meanwhile, private edtech startups have raised a record $14 billion this year, topping last year’s decade-high of $12.8 billion, according to financial data firm PitchBook. 

Udemy is currently discussing the IPO with investment banks. Last year, it hired Goldman Sachs to serve as an adviser on its recent Series F financing, in a fundraising first reported by The Information. The company’s listing plans are not yet finalized and the timeline could change depending on market volatility, one person said. A spokesperson for Udemy declined to comment.

The 11-year-old company offers 155,000 online video courses on topics such as drawing, piano and data science to its 40 million users, taking a cut of course fees paid to instructors and charging corporate clients including Apple and Nasdaq monthly subscriptions for training. The company also makes money through its monthly pro subscription plan, which offers IT certifications and charges $19.99 per month.

Its business surged last year as a result of the pandemic, when weekly course enrollment spiked 425% from February to March 2020. Udemy’s total revenue was expected to surpass $400 million last year, Forbes reported, outpacing that of competitors like Coursera. Udemy’s 2021 financial projections could not be learned.

Coursera and Duolingo completed highly anticipated IPOs earlier this year, but the stocks have diverged in recent months. Coursera, which expects to generate $402 million in revenue this year, went public in March at an implied valuation of $4.3 billion. Shares recently traded at $35 each, up slightly from the IPO price of $33. 

Duolingo, which offers a mobile and web app for language learning, raised more than $500 million at a $3.7 billion valuation in its July IPO. Shares in the company, which is projecting annual revenue of over $236 million, have doubled in the two months since, and are currently trading at more than $200 per share. 

Udemy was launched in 2010 by Eren Bali, Oktay Caglar and Gagan Biyani, shortly before its competitors, Udacity and Coursera, also benefited from the rising interest in video-based learning tools. In 2019, former pet food company Stella and Chewy’s executive Gregg Coccari joined as CEO.

Udemy has raised a total of $150 million in VC funding from investors including Tencent, Late Stage Management, Insight Partners, Learn Capital, Stripes and Norwest Venture Partners.

SOURCE: The Information



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