
Udacity Raises $105M Series D, Bringing Valuation to $1B - doppp
http://techcrunch.com/2015/11/11/udacity-raises-105-million-series-d-bringing-valuation-to-1-billion/#.wg5qvi:VBm7
======
Alex3917
I taught myself to code on Udacity, and in a couple weeks I'm going to be
launching a social network that I built with one other person. Shit works.

There's no reason why everyone shouldn't be on there.

edit: Obligatory link to sign up for the private beta:
[http://fwdeveryone.com/](http://fwdeveryone.com/)

Also, here is what I wrote about the experience at the time:
[http://alexkrupp.typepad.com/sensemaking/2013/11/2012-my-
yea...](http://alexkrupp.typepad.com/sensemaking/2013/11/2012-my-year-of-
code.html)

~~~
ChicagoBoy11
Man your blog post brought back so many memories. I went through just about
the same learning path, and in 2012 as well. Like you I'd done CS in HS and
taken one class in college, but couldn't build anything real if my life
depended on it.

To me what really made me transition is their WebDev course In all
seriousness, though, is their CS253 the greatest course ever or is it the
greatest course ever?! Huffman was just brilliant in providing a nice
framework with which to think about development. After I took that course, it
was if Googling my way through problems and learning from the available
resources on the internet became that much easier, because now I could see how
all of these little parts fit into a broader context.

That's one thing that definitely disappointed me about how Udacity has grown.
That course taught by Huffman was so good in that he explained so much of the
theory and reasoning, and not just tools. Peter Norvig's advanced Python
course is another one of their offerings which feel very similar. Lately,
though, I think their courses have resembled much more what you find on
CodeAcademy or places like that: A lot more focused on tools, content, etc.,
and less so on the broader picture.

~~~
didgeoridoo
CS253 all the way. I still have Steve Huffman's "pretty neat, huh?" echoing in
my brain. Whenever anyone asks me "how can I learn to build web applications",
it's the first place I point them. He even goes over basic crypto and
security, yet doesn't oversell what he's teaching. Just perfect.

I agree that the Udacity classes available today just don't measure up, sadly.

------
bigtunacan
I've used quite a few other (pay) MOOC services; subscription based, pay by
class, free, etc...

Pluralsight, Udemy, Lynda, Coursera, Code School, Stack Skills

I've also used some small independent ones as well (Bitfountain is just one
example).

The thing I would be really curious to see (but unfortunately don't think we
will see any time soon) is how the profit numbers stack up on these different
pay models.

For the subscription based services I will pay a monthly fee for no more than
one service at a time and I will make heavy use of it during that time period.
This is what I did with Pluralsight, Code School, and Lynda. Got a
subscription and used it for awhile then canceled when I was done with the
material I was interested in or I didn't have enough time to spend for it to
be worth the money.

I also cap the value at about $50/month max. Not that Udacity has bad content,
but there is great content on the competitors too. I can sign up for
Pluralsight + Lynda + Code School every month and still have money left over
to buy some courses outright on Udemy or Stack Skills.

In total I've spent a lot more money on buying courses outright from sources
like Udemy. Originally I was looking there for some specific technical
classes, but they have so much variety I have spent more money on things like
art, photography, and design classes.

Wow... I went off on a bit of a tangent there. Anyway; really would be
interested in seeing how much money is being made by these different services
as well as seeing percentages/dollars of how much of that passes through to
individual content creators etc...

~~~
el_benhameen
As someone who wants to use perhaps one or two--but certainly not all-- of
these services, I'm curious which of these services you've found most
valuable. I'm asking generally, though I'm mostly interested in compsci/dev
topics, if that's helpful.

~~~
MIKarlsen
Udemy has some crazy discount almost 90 % of the time... I'm constantly
getting 75-95 % discounts on my courses. So that might be a factor as well.

~~~
eterm
This actually led to a really good course author having an issue with them
over this. (Alan Richardson who hosted a very good technical testing course
and a good selenium/webdriver course).

I believe he still has those courses but he intially opted out of their
discount program. A course he sold for $200 would have been sold for far less
which undermined his own brand but also didn't give him a fair shot at earning
from it, especially since he was helpful in responding to any questions I had.

I was lucky and took the course when it was $200, it shortly after went up to
$300 due to changes in revenue sharing based around coupon codes. This also
meant he stopped offering for free a really helpful free course on technical
testing.

(The source of this information is through course announcements made at the
time, I can publish them in full here.)

This post from udemy to instructors is interesting reading:
[https://blog.udemy.com/announcement/](https://blog.udemy.com/announcement/)

One benefit of the udemy over the pluralsight model is that years later I
still have access to the course and can revisit it, without paying an on-going
subscription.

Pluralsight overall seems to have better content, at least from a software
developer perspective.

~~~
bigtunacan
I think Pluralsight has consistently higher quality classes than Udemy, but
that Udemy also has some great classes. You have to spend a bit more time
looking at reviews before you buy on Udemy. Also you end up having to accept
the fact that sometimes you will end up buying a course that isn't worthwhile.

As an example of a non technical class; The Secrets to Drawing on Udemy is
Amazing. I am a (bad) hobby artist in my spare time and this class has done
more to help me with my drawing skills than any other book or class I've tried
in the past; my kids have been going through it too and they absolutely love
it.

[https://www.udemy.com/the-secrets-to-drawing/#/](https://www.udemy.com/the-
secrets-to-drawing/#/)

This is two of the benefits of Udemy over Pluralsight

1) On Pluralsight I would never see this class (well not currently anyway)
because it doesn't fall within their accepted domain of classes.

2) I paid the $30 one time for this class and I can go back and review
whenever I want and let my kids go back and use it a year later and not have
to pay another subscription fee.

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subrat_rout
I am one of the first cohort of Udacity to complete Front End Web Developer
Nanodegree. However, when I applied for a developer job(something called
Udacity Experience Program) on their career site, few weeks after I got an
email describing I am not a good fit for the role.

I have been looking for an entry level developer job for last couple of
months. During job interviews when I mention regarding the Certification
Program from Udacity or discuss on the projects that I did it does not ring a
bell to most of interviewers.

Agreed I learned a ton on front-end development from the program but so far
the nanodegree has not really helped me in my job search.

It will be interesting to see if Udacity can gather and publish data on number
of nanodegree holders getting developer jobs after completion.

~~~
Alex3917
Are you looking for jobs at startups? If so, it's going to be difficult to get
hired regardless of your training if you've never worked in the field before.
This is just due to some quirks about the economics of the industry. It's much
easier to get hired at a dev shop, work there for a year or two, and then
apply to work at a startup or large company after that.

~~~
subrat_rout
Right. Few startups and dev shops that I have interviewed in SF Bay area are
looking for those developers (2-5 years experience) and the market here is
crazy for experienced ones.

Few days ago I posted on HN (Who wants to be hired) even to work for free as
an intern for couple of weeks but so far has not received any response.

~~~
Alex3917
Interesting, maybe it's different in NYC due to all the money in media,
fashion, healthcare, and other industries where tech is more peripheral.
Recently I've also seen some folks have success after regularly attending the
weekly hack nights for their technology of choice, and then get hired after a
couple months of that.

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dthal
A lot of people are going to dump on this billion dollar valuation, but we
don't have the terms. Presumably there is liquidation preference. According to
Crunchbase [1], the total capital raised is about $160 million after this
money, so the investors don't need this company to be worth $1 billion to come
out fine. Sam Altman made the point a few days ago that a lot of these late-
stage private financings are kind of debt-like [2, about paragraph 8-9 and
footnote #2], with the result that the valuations aren't really meaningful.

[1]
[https://www.crunchbase.com/organization/udacity#/entity](https://www.crunchbase.com/organization/udacity#/entity)

[2] [http://blog.samaltman.com/the-tech-bust-
of-2015](http://blog.samaltman.com/the-tech-bust-of-2015)

------
TheMagicHorsey
I used to think these online educational companies wouldn't be very profitable
in the long run. Then I discovered Udemy. In the last two months I've bought
three courses on Udemy (at about $10-$20 each). The courses aren't your
conventional CS classes. I bought a course on Photoshop mastery. Another on
Android programming, and another on Adobe Illustrator skills. I've enjoyed the
material so far.

I have undergrad and grad degrees from respected US schools, so I don't really
need certification, but I still find myself taking these online courses.

In the case of Photoshop and Illustrator, its not even for the sake of
employment (although it might be useful in the long run). There's something
satisfying about acquiring skills in an area you are really deficient in.

~~~
_delirium
I like a good deal of what's on Udemy, but it feels like for reasons totally
different from the marketing. For me it's more like the online version of
those video lecture series you used to buy on VHS or DVD through a "distance
learning" mailorder catalog, and not so much like an online classroom. There's
some course-like content in it beyond the lectures (quizzes and such), but imo
the main value is really just the lectures, and the quality of the lectures is
what differentiates good courses on there from bad ones.

Which is fine, video lectures are a model that's worked for a few decades, but
now online and more convenient to shop for. And a good video-lecture course is
certainly worth at _least_ $10. I guess I can see why they don't brand it that
way (the "disrupting education" hype train has money/press, while "mail-order
video lectures, but on the internet" is a harder sell). But for me, their
courses made a lot more sense to me once I started thinking of it as a place
to buy a video lecture course, like the way you might order DVDs of the
Feynman physics lectures.

~~~
tmullaney
Agreed, in my experience (primarily with Coursera and edX, which are
admittedly different from Udemy/Udacity in their focus), the recent wave of
online courses or "MOOCs" mostly boils down to video lectures being made
readily available online. For my purposes, this is just great! The content is
often very high quality, and I have yet to pay for a course since so much is
available for free.

------
ghaff
Mind. Boggles. "Nanodegrees"? "now recognized by some of Silicon Valley’s
biggest companies, including Google and Salesforce"? What does that even mean?

And this is a company that has essentially "pivoted" to being a sort of
vocational training in the CS space. There may be a business model there but
it doesn't seem like anything particularly unique or deserving of out-sized
evaluations.

~~~
dthal
I wouldn't be so down on vocational training for software...It _is_ a field
that has an unusually high requirement for ongoing learning. And when you have
to learn some new tech, usually you have to do it now, and in-place, not next
September, in the nearest college town. Given the high ongoing learning
requirements that software has, I think there is a pretty clear need for
training that's delivered where you are and when you need it, and traditional
schools won't be able to do that.

~~~
ghaff
Oh. To be clear. I think on-going training is great especially given the pace
of change. And things like automated evaluation of code is something that
actually works pretty well in MOOCs in my experience. (Unlike peer grading.)
However, the argument for platforms like Udacity hasn't in general been that
they're a great advancement for vocational training but that they disrupt
higher ed generally. And that's probably a different valuation metric.

~~~
cwyers
That depends on how sensitive higher ed is to competition from vocational
training for things like programmers, right? Something like Udacity isn't
going to replace a traditional CS degree, but something more like an IT degree
could just be high-end vocational training offered by a traditional four-year
institution, and as college costs rise, it could start to eat into the lower
end.

------
netcan
One worrying aspect of this sort of thing is that it obligates them to go
after really big revenue potential as an end game.

We don't know much about where online education is going yet, how it works. It
may be the case that a MOOC could change the way education works fundamentally
and still have revenue that does not justify a valuation like this.

The field is still young and feels like the potential is much bigger than the
current state. We don't know what achieving that potential looks like. I hope
they aren't taking important options off the table.

------
rdlecler1
No they raised $105M in preferred shares with 1x or more liquidity
preferences. The common stock is worth no more than the value of a way out of
the money penny option that is only excercised in the case of a liquidity
event. Meaning the real valuation of the company is maybe two or three hundred
million. Of course founders don't tell employees that because they can get
talent for pennies on the dollar this way.

~~~
judk
How do you get to 300M? Is is possible that someone like University of Phoenix
might offer $1B for the company? If so, might it be accepted? If so, how much
are shares worth?

At my old job, whenever investors bought in they offers to buy out employee
shares at the stated valuation.

~~~
rdlecler1
Yes possible. It's possible my $2 lottery ticket will also be worth $100m but
until it is, it is still worth only $2 or maybe even less. Until then the
value of each share class is not the same and so it would be a mathematical
mistake to calculate valuation as the sum of all shares multiplied by the
highest price paid for the most senior share class.

------
sotojuan
The JavaScript Design Patterns course[1] kickstarted by web dev knowledge. Not
sure how the rest of the catalog is, but that course was useful for a newbie.

[1] [https://www.udacity.com/course/javascript-design-patterns--
u...](https://www.udacity.com/course/javascript-design-patterns--ud989)

------
mattbillenstein
I interviewed at this place -- comically bad.

They're all clearly drinking the koolaid around a fire of VC money -- their
CEO's ties to Google and resume will let them raise whatever funds they
desire, but the people I talked to seemed elitist and really concerned about
everything but the end product. We'll be talking about a "unicorn" failing in
2017 when they burn through this $105M...

~~~
makeramen
How long ago did you interview? There have been some pretty big changes
internally and things should have improved quite a bit over the past year or
so.

~~~
mattbillenstein
End of Sept 2015

------
calebm
Udacity has the absolute best online CS classes I've seen. My brother used
Udacity to learn software development, and is now employed.

~~~
subrat_rout
Hi Caleb, Care to elaborate a bit more about your brother's scenario? I am
interested as I am a recent graduate from Udacity and looking for a junior
developer position in SF Bay area.

------
goldenkey
There is a ton of astroturfing going on in this thread. The article looks like
an ad... Where are the contrasting opinions?

~~~
spectrum1234
TechCrunch is known for being "in" with VCs...you know, the ones who fund the
companies they write articles for.

------
dhruvp
Relevant interview with Sebastian Thrun(CEO) on the raise:
[http://www.bloomberg.com/news/videos/2015-11-12/sebastian-
th...](http://www.bloomberg.com/news/videos/2015-11-12/sebastian-thrun-s-
udacity-becomes-a-unicorn)

------
Everhusk
Awesome, Udacity is awesome! Any time my friends ask me how I learned coding I
always refer them to Udacity. The quality is just as good as University
courses, and you don't have to wait months to finish because you can go on a
2x speed binge watch and crush it in days/weeks.

------
fierycatnet
I think Udacity is great but I don't know about efficacy of it. I think it's
going to face the same challenges as any other online education site. I think
one of the founders had some doubts a few months back about direction of the
site, it didn't prove to be what it set out to be. In any case I wish Udacity
all the best because I like them.

------
rezashirazian
Udacity is great for picking up specific skills but if a nanodegree is all you
got on your resume, I doubt you would be taken seriously by employers.

~~~
yeukhon
I wouldn't put it on the resume either. I would instead just build something
at work or after work using the skill I have. If someone asked me how I manage
to write a simple chatbot I would say I learned it from Coursera and the
Internet.

