Until 2020, the training market grew steadily each year. Like most industries, we took a hit in 2020 — but not every segment of the market was equally impacted. Training Industry research found that, after the pandemic began, 42% of organizations spent more on learning technologies and 35% on courses than prior to the pandemic.
As many employees began working from home, organizations needed to invest in the technologies that enable remote learning. Moreover, from safety training to virtual leadership, there were a variety of topics on which organizations needed new courses. These dynamics are reflected in the funding activity we saw last year, particularly among eLearning companies.
Last year, Skillshare raised $71 million in Series D funding (bringing its total funding to $108 million). Udacity signed a $75 million debt facility with Hercules Capital and increased its annual recurring revenue by 260%. In February, Udemy announced a $50 million investment and a valuation of $2 billion — followed by a November announcement of another $50 million in Series F funding at a $3.25 billion pre-money valuation. Meanwhile, in December, Bloomberg published rumors of a 2021 initial public offering (IPO) and $5 billion valuation from Coursera. (Coursera was unavailable to comment on the possibility of an IPO.)
What kind of trends and growth did these companies see in 2020? Do they expect the growth to continue this year? Here are just a few insights:
Growth in Online Learning
Skillshare, Udacity and Udemy each report growth in the number of users accessing their platform last year. “At the height of the pandemic, we saw new member sign-ups rise by three to four times, and we’re still well over double our normal volume. Our user engagement doubled and tripled in most markets, and we saw COVID accelerate individuals’ creative pursuits,” says Matt Cooper, chief executive officer of Skillshare.
As Kirk Werner, vice president of content at Udacity, points out, “COVID-19 has accelerated the demand for online learning, as the traditional alternatives — ‘bootcamps’ and in-person academic offerings — became no-go zones.” Udacity’s enterprise business doubled in 2018 and 2019 and, as of December, was expected to do so again in 2020. Last year, course engagement among current customers increased by 50%. Consumer access was also up, partly due to Udacity’s scholarship program, which helped upskill and reskill displaced workers.
Udemy also saw a “significant surge in online learning on [its] platform,” says vice president of customer success, Stephanie Stapleton. Like Udacity, Udemy made an effort to reach people struggling with the pandemic, creating a “curated collection of free Udemy courses in over 15 languages” on topics such as working from home, finding a job or maintaining work/life balance. And, like Udacity, Udemy saw growth among consumer and business customers.
Changing Content Preferences
It seems video and microlearning are here to stay. “People want to learn about something, but in a snackable way,” says Cooper. Skillshare has even begun offering “bite-sized virtual live classes,” a trend he’s seeing in online learning in other verticals, like fitness classes. Similarly, while “consumer behaviors were already beginning to shift pre-pandemic to embrace more video-based learning,” the pandemic saw engagement with online video “double and triple” at Skillshare.
The skills organizations and individuals sought out were largely unchanged — but accelerated — in 2020. Udemy saw “strong growth in technical categories,” according to Stapleton, but also in “lifestyle and health support,” such as meditation courses. While the ability to work in a high-tech environment is important, support for employee wellness and soft skills are also in high demand. Skillshare’s decision in 2019 to focus on creativity has brought the company success. “Skills like creativity, leadership, collaboration [and] communication are going to play a more critical role in people’s lives,” Cooper says.
The Importance of Continuous Learning
2020 threw into sharp relief the importance of continuous learning. Werner points out that “the World Economic Forum, the U.S. government and many employers realize that skills are far more important than credentials,” and employees are following suit.
“Continuous learning — for upskilling or reskilling to find new employment or to increase job security — is table stakes for the modern world,” says Stapleton. By providing easy access to continuous learning, eLearning companies will likely continue to see growth in 2021 and beyond.