Udemy Business Model – How does Udemy make money?

 Imagine the future!!!

You can access an unlimited team of instructors, everyone has good experience and expertise in their field. The instructor explains clearly about the subject and improves your skills. Also, the professional personal instructor will repeat the lesson without raising a complaint. Also, the team will advise you with the best price quote.

The future is here!!! It’s none other than Udemy. Whether you’re planning to learn a new skill or willing to explore your knowledge, Udemy is the right place for you.

Let’s discuss Udemy in detail!!!

What is Udemy?

Udemy is a popular and leading global marketplace for learning new skills. The platform connects students across the world to the professionals. Simply put, Udemy aims to help individuals reach their goals and fulfil their dreams.

Udemy was founded in 2010 by “Eren Bali”. Udemy is the one-stop destination for learners and instructors. The platform uses content from online creators and earns income. The ultimate goal of Udemy is the upgrade the skills of professionals.

Currently, Udemy is having

  • 35 million learners
  • 57K instructors
  • 130k courses
  • 65+ languages
  • 7K enterprise customers
  • 110M minutes of video
  • 400M course enrollment

Udemy says “80% of Fortune 100 companies trust Udemy for enhancing their employee skills”.

Udemy stats & facts: Funding & primary milestones

  • Udemy was founded on February 1st 2010.
  • Headquarters is located in San Francisco.
  • Major founders are “Eren Bali, Gagan Biyani and Oktay Caglar”.
  • $223 million is the total funding amount.
  • 27 investors
  • 900 are working for Udemy
  • Udemy works on “Marketplace Business Model”.
  • $2 billion is the total valuation at IPO.

How does Udemy stand out?

With advanced technology and current competition, everyone is looking to have an extra skill. This skill will help them to stand out from the crowd. Also, mentioned the skill on their resume will make up their skillset even more interesting.

Udemy is the perfect learning platform for all age groups. It’s the one-stop destination for the people who are planning to learn a new skill or improve their current skills. The best part of Udemy is, the platform has more than 130,000 courses. Sounds fantastic right!!! Few courses are absolutely free, but there are a few courses that are at discounted prices. Students will receive good guidance from professional instructors. Subscribing to the course will also have lifetime access. The courses are currently available in more than 65 languages. The popular courses are business, information technology, real estate, finance, web designing, music, photography, fitness and personal development.

As already mentioned, there are millions of learners and thousands of online courses available at Udemy, it’s clear that Udemy is earning good profits every year. If you want to know how Udemy is making money, continue reading…

Udemy business model explained

It’s no surprise Udemy operates on the “Marketplace Business Model”. Keeping it simple, Udemy organizes the services or products of different instructors and upload them on its website.

The organization works as a mediator between instructor and student. It doesn’t own a product or service. Hence, the cost is determined by the individual instructor on Udemy. Also, Udemy charges an amount of commission from the instructor for using its platform and connecting with a huge audience.

Consider a popular e-commerce website such as Amazon and Flipkart, which acts as a mediator between the customer and seller. These platforms earn commission on every referred sale.

As per the recent analysis, Udemy – the learning platform has raised approximately $223 million in 2020. The money is generated from different ways i.e selling courses, promoting instructors and more.

How does Udemy work?

Udemy – Academy for You

The place is the leading learning platform and marketplace available online. Thousands of instructors can get connected with millions of students. Here, instructors can teach students on the subject they’re experts in.

Following are the four key lines of Udemy

Convenience

Students have the freedom to choose the online course and attend classes according to their convenience. When an online course is available on the website, students can enrol to the course irrespective of their educational background. Also, they can enrol at any time. Moreover, there is a particular time limit, it means students can learn courses at their own pace.

Variety

There are thousands of online courses available on Udemy. Since the platform has linked professional instructors across the globe who are expert in a variety of subjects. The courses offered by Udemy range from business to lifestyle. It’s the student’s choice to learn and improve their skills whatever they need.

Cost-effective

There are few online courses on Udemy available for free. On the other hand, there are many courses at discounted prices, the courses are starting from $9 onwards. Sounds amazing right!!! Also, Udemy provides coupons and offers that help students to get the course at budget-friendly prices. There are multiple payment methods available at Udemy, students can make payments on their preferred payment gateway.

Certification

“Certification of completion” is what every student looks for. Udemy offers a certificate of achievement once the course gets completed. Make sure, the student should get qualified to receive a certificate from Udemy. The certificate of completion can be saved in various formats such as .jpg or .pdf.

How does Udemy make money?

As already mentioned earlier, Udemy is the leading learning marketplace with a good number of courses, students and lecturers. It is clear that Udemy is earning great profits and giving tough competition in the market. The revenue graph for Udemy is increasing every year.

Instructor fees

Did you know, there is no particular fee needed to pay by the instructor to upload their courses on Udemy? Yes!!! Instructors showcase their course for free. The company earns revenue whenever a user or student purchases an online course.

Consequently, the online course revenue will be shared with the specific instructors. It might be depending on how the student acquired the course.

There are 3 revenue share tiers available on Udemy

Instructor promotion

This is something interesting!!! The student will purchase the course using a coupon code or offer or referral link that is probably issued by the instructor. Since the student is purchasing the course through promotion, the instructor will receive 97% of the total course value. Also, 3% fee as an extra additional fee needs to be paid by the instructor to Udemy.

Udemy organic

Hope you’re aware of the term organic. Here the student will visit Udemy website, browse the course and purchase the course that they’re interested in. In this process, no coupon code or referral link will be used by the student while purchasing the course. As it is an organic sale, Udemy and the instructor will share 50% of the course revenue. In this scenario, Udemy will charge a 30% fee for every sale that is generated through Udemy mobile application. 

Paid acquisition

Paid advertisement is another way to increase sales. Udemy helps the instructor to improve their sales through advertising on other platforms such as Google, Facebook and more. Whenever a student purchases the course using paid channels, Udemy will take 75% on every course revenue. The instructor can choose promotional channels to promote their course.

According to the analysis, Few Udemy instructors are pretty unhappy with the promotions and selling their courses. There might be various reasons such as extra charges, pricing, advertising on multiple channels and more. On the other hand, Udemy is admired by most of the instructors as they’re earning millions of dollars every year by selling their courses on Udemy. Investors agree Udemy is a win-win solution to make money.

Udemy For Business

So far we have discussed how Udemy is making money from investors, now let’s discuss how Udemy is making money from the business.

Udemy for business, as the name implies Udemy is tailored for few established organizations and their employees. Companies will subscribe to Udemy for Business plan. With this program, their employees can access to 5000+ in-demand fresh courses at Udemy.

Employees can upskill their skills through virtual training. Udemy for business will empower the working experience. Employees can learn skills from global professionals across all the niche i.e tech, business, finance and more. According to recent reports, the business has grown 86% ROI after partnering with Udemy.

Udemy learning platform is offering two types of subscription plan for business. The subscription price may vary depending on the team size. For example, if a business has more than 20 employees, they need to pay $360/year and use it.

If your business is having a team of 20+, then you can choose the Udemy Enterprise plan. Contact the Udemy sales team and they will provide you with Enterprise subscription plan details. Furthermore, the Udemy Enterprise subscription plan is offering additional excellent features. It includes custom user groups, no language limitation, slack integration, custom categories, etc.

Conclusion

What is the best place to improve your skills? Which is the right spot to get thousands of online courses? Are there any free online courses? Udemy is the answer to all your questions. Udemy is offering free and paid online courses for students around the world. It is a one-stop solution for learners and instructors. Here learners can get access to thousands of courses and instructors can get connected to over millions of students. Udemy sells on-demand content to students and makes money. And the instructor is responsible for the course fee. The tuition charges may vary from one course to another course according to instructor choice. Also, Udemy is offering training to employees for popular organizations.

Udemy company is making good revenue from instructors and business. Here, instructors are earning 97% of their course fee when the sale is generated by instructor marketing. Udemy retains almost 50% of tuition revenue when the student purchases by its own website. Instructors will charge 30% of the tuition fee when the student purchase the course through Udemy mobile app.

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