Online education

Tencent invests in online training start-up Udemy

(Bloomberg) –

Chinese technology company Tencent Holdings Ltd. is a top investor in a round of funding that valued online education startup Udemy Inc. at over $ 3 billion, according to people familiar with the matter.

Investors have also been told by Udemy that the company may pursue an IPO next year, said the people, who asked not to be identified because the matter is private.

Udemy said on Wednesday it raised $ 50 million in a round valuing the company at $ 3.25 billion ahead of the new investments. The San Francisco-based company named Learn Capital as one of the companies participating in the round. It did not disclose whether Tencent was an investor and it is not known how much Tencent contributed.

Udemy was looking to raise $ 100 million in new funding, according to a regulatory filing in Delaware.

Beyond its core gaming and social media empire, Tencent is investing in China and increasingly outside, grooming newbies in everything from supplying fresh vegetables to building electric vehicles.

It has a range of US investments ranging from private investments in Epic Games Inc. and Reddit Inc. to public companies such as Warner Music Group Corp. and Activision Blizzard Inc. Although its WeChat super-app is the target of a U.S. ban interrupted by a court injunction, Tencent has yet to take a heavy blow as the world’s two largest economies clash, unlike Huawei Technologies Co. or TikTok’s parent company, ByteDance Ltd. In China, Tencent faces a government crackdown to reign over the monopoly power of big tech.

E-learning is one of the most contested arenas in China, with incumbents like TAL Education Group taking on tech companies like ByteDance and NetEase Inc. Tencent has its own in-house e-learning platform. , while making bets in startups like Yuanfudao. and VIPKid, both focused on after-school tutoring.

A representative for Tencent declined to comment.

Tencent’s main investors are Naspers Ltd., the South African parent company of Prosus NV, which is also a funder of Udemy. Udemy was valued at $ 2 billion in a funding round earlier this year. It is also backed by Insight Partners and Stripes Group. With the new cycle, it is one of the most valuable educational technology companies.

Udemy CEO Gregg Coccari said in an interview that the company doesn’t have a timeline in mind for an IPO.

“We are of course preparing the company for that eventuality if the board so wishes,” said Coccari. “We took no action.

Incoming interest

He said Udemy has received inquiries from so-called blank check companies, which allow a company to go public through a merger rather than an IPO.

“It was all the incoming interest, nothing we were looking for at all,” Coccari said. “The board will be looking at any kind of options we have in the future.”

While declining to offer details, he said the company had hundreds of millions of dollars in revenue.

Udemy and its competitor Coursera Inc. are among the companies that are profiting as the coronavirus pandemic prompts more people to experience virtual lessons. Udemy offers professional, technical, and personal development courses, as well as an array of courses as diverse as cybersecurity and guitar.

Rob Hutter, managing partner of Learn Capital, said Covid-19 has significantly boosted Udemy’s business.

Computer time

“People are spending more time in front of their computers,” Hutter said. “They are using this time to learn new skills and it has created a variety of new behaviors.”

Udemy has enrolled 35 million students in more than 130,000 online courses, according to its website. The latest funding will help it expand into new markets. It has offices in Denver, Brazil, India, Ireland and Turkey as well as California.

Coccari said the pandemic has generated “five years of growth in five months” for Udemy’s mainstream business. His corporate activity, which serves large corporations, has also increased this year, he said.

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