Udemy raises $50 million at $2 billion valuation: Co-founder Biyani narrates how the startup almost died several times

Udemy, an online learning platform that provides courses for professional adults as well as students, has raised $50 million from Japanese investor Bensesse Holdings, an educational publisher that is the company’s partner in the country. The latest fundraise will value Udemy at $2 billion.

The fundraise is significant as the startup had last raised money in 2016 — a $60 million funding round that valued the company at around $710 million. So far, the company has raised around $200 million with its other investors being Stripes, Naspers, Learn Capital, Insight Partners among others.

The money raised will be used for the company’s expansion in areas of both students and enterprises. Udemy’s 150,000 online courses have so far been used by 50 million students and 5,000 companies. The company is also looking to expand international operations in markets like Japan, India and Brazil. But did you know Udemy almost died at least five times? Yes, the company was rejected by everyone in Silicon Valley.

“Startups are never a straight line,” wrote its co-founder Gagan Biyani on Twitter while announcing the news of his company’s latest fundraise. “I’m biased but @udemy is a true underdog story,” he said.

Biyani met Eren Bali and Oktay Caglar, the other two founders of the company, in 2009 at incubator Founder Institute while he was looking for technical leads. “Eren + Oktay were clearly the smartest engineers in the whole group, but few knew who they were. They were brainy, less social with thick accents,” he says.

Elaborating on Udemy’s journey, Biyani said that it was an extremely tough start for the company as none of the founders had family money. “They were on visas so could not quit. Worked day jobs from 10a-7p; then on udemy until 4am. I was a consultant and flew cross-country every week. 70 hours in DC (District of Columbia), slept on plane, then 40-hour weekends in SF (San Francisco),” wrote Biyani.

However, despite the hardwork, the debt kept increasing as they were continuously rejected by investors. The three met more than 100 investors but were rejected by all. It is this time when the three almost gave up on the startup. “We agreed if we didn’t raise in 1 month, we’d quit.”

Finally, Keith Rabois, entrepreneur and investor, agreed to invest in the company. “Finally, @rabois (who knew this but didn’t care) said yes. Then @naval put us on @angellist.” “The famous names were great, but other investors - @rfradin and @msugarman - dug in. Taught us how to run a company. Russ insisted we create a board - so we put him on it! Starting a board at the seed stage was a company-defining decision.”

The struggle, however,  wasn’t over for the company as when it went to raise funds in round ‘A’, everyone passed again, despite a 20 percent month-on-month growth.

“We raised on rough terms. I look back on that as my biggest miss. Early rounds on tough terms lead to future rounds on tough terms,” said Biyani on Twitter.

Amid the struggles, Biyani was fired by Eren — Biyani said he would reveal the reason later on Twitter. Eren left the firm two years later. By Series C, none of the founders was at the company. “In fact, today we are on our 4th CEO and yet the business is as strong as ever,” Biyani added.

Biyani credits Udemy’s success today to its foundation as “Eren’s original vision was spot on and we built a growth marketing culture that knew how to grow”. “There is no one path to a gr8 business. You can lose your founders and still have a great business. You can be rejected by Sand Hill and raise elsewhere (or not at all). You can grow up in a one-room schoolhouse in a poor part of Southeast Turkey as Eren and Oktay did.”

Biyani adds that today many of Udemy’s peers which are valued higher are facing challenges as overvaluation means overspending, which increases the likelihood of failure. “Hype gets into people’s heads. Best of both worlds: build hype but stay humble,” Biyani says.

However, he urges entrepreneurs to not give up.

“Don't be a sore loser. Eren + I are v good friends. We respect those who rejected us + those who fired us,” he concludes.