Udemy Collects $1 Million to Expand Casual Learning Platform

8/31/10Follow @wroush

Great teachers prepare their students to be lifelong learners, even after they leave the classroom. And judging from the $9 billion that Americans spend each year on “casual learning” products—that is, courses, conferences, seminars, DVDs, self-help books, and other forms of instruction outside of formal educational institutions—they may be succeeding.

One small company tapping that phenomenon just got a big boost. It’s a Palo Alto, CA, startup called Udemy—the name is a mashup of “you” and “academy”—and it announced today that it has collected $1 million in seed funding from a group of angel investors. The funds will help Udemy scale up its Web-based courseware platform, which can be used by anyone with expertise they want to share. These DIY instructors can develop online courses consisting of videos, PowerPoint presentations, and text files.

“There are millions of experts who might be great at Photoshop, or Web development, or public speaking, or dog training, or playing football,” says Udemy co-founder Gagan Biyani, a former Accenture consultant. “We wanted to make a way for people to share their knowledge by providing a WYSIWYG [what you see is what you get] way for them to build online courses.”

Launched in May with support from the Founder Institute, a training program for entrepreneurs, Udemy already offers more than 2,000 courses created by 1,000 instructors. At the moment, everything on the site is free, but within a couple of months, the startup will turn on a payment system that will allow instructors to collect course fees via PayPal, with Udemy taking a 20 percent cut, according to Biyani.

That business model has attracted the attention of a high-profile group of Silicon Valley angels, including PayPal alum Keith Rabois, Adify co-founders Russ Fradin and Larry Braitman, MHS Capital managing partner Mark Sugarman, Playdom co-founder Rick Thompson, Facebook alum Benjamin Ling (currently at Google), Aggregate Knowledge founder Paul Martino, Yelp CEO and PayPal alum Jeremy Stoppelman, 500 Startups founder Dave McClure, and AngelList co-founder Naval Ravikant.

Udemy course pageBiyani credits Founder Institute creator Adeo Ressi and AngelList for helping Udemy collect its seed fund, which ended up three times larger than the amount that the company originally set out to raise. “We went out on AngelList after getting two investors [Rabois and Fradin],” Biyani says. “Within a week or two we were overcommitted, and within three weeks we had closed the round.” (I profiled AngelList on August 20.)

Biyani’s co-founders are Eren Bali and Oktay Caglar, both Turkish citizens who were among the earliest employees at SpeedDate, the venture-backed startup in San Mateo that more than 10 million people have used to go on three-minute speed dates via webcam. Bali and Caglar joined the Silicon Valley version of the Founder Institute in May 2009 in order to restart a software project they’d originally worked on for the Turkish government: a live video-based learning system that entrepreneurs in Europe could use to teach startup techniques to entrepreneurs in Turkey.

Biyani entered the Founder Institute at the same time, as part of a startup creating Internet-video-based SAT preparation courses. But after Biyani’s co-founder in that venture dropped out, he paired up with Bali and Caglar, who needed a business type.

At Udemy, Bali and Caglar have rebuilt their original live instructional platform to be primarily asynchrononous. Instructors who prefer to teach classes live can use the startup’s custom Web-based conferencing system, which has all the usual bells and whistles (video, audio, presentation sharing, chat, and a whiteboard). But the core of the Udemy system is … Next Page »

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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