Chinese technology company Tencent Holdings Ltd. is a major investor in a funding round that Udemy Inc. Startups in online education worth more than $ 3 billion, according to people familiar with the matter.
Udemy also told investors that the company may seek an initial public offering (IPO) next year, as the people who have requested anonymity said because the matter is private.
Udemy said Wednesday it raised $ 50 million in a $ 3.25 billion round before new investments. The San Francisco-based company launched Learn Capital as one of the companies participating in the tour. It did not disclose whether Tencent was an investment and it was unclear how much Tencent contributed.
Udemy was looking to raise $ 100 million in new funding, according to a Delaware regulatory filing. In addition to its core empire in games and social media, Tencent is increasingly investing in China and abroad, preparing startups in everything from supplying fresh vegetables to building electric cars.
It has a portfolio of American investments from private companies in Epic Games Inc. and Reddit Inc. to public companies like Warner Music Group Corp. and Activision Blizzard Inc. Although its WeChat super app is a target of the United States that has stopped the ban for court order, Tencent has not received much of a shock even as the world's two largest economies collide, unlike Huawei Technologies or ByteDance Ltd. In China, Tencent faces a government crackdown to seize control of its tech monopoly by the force.
Online learning is one of the most controversial fields in China, with traditional companies like TAL Education Group competing against tech companies like ByteDance and NetEase Inc. and VIPKid, which focus on after-school tutoring.
A representative for Tencent declined to comment.
Among Tencent's biggest investors is Naspers Ltd., Prosus NV's South African parent company, which also supports 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 round, it is one of the most valuable educational technology companies.
Udemy CEO Greg Kokary said in an interview that the company does not have a deadline in mind for the IPO.
"Of course, we are preparing the company for this eventuality if the board so decides," Kokkari said.
He said Udemy has received inquiries from so-called blank check companies, which allow companies to advertise through mergers rather than IPOs.
"It was all an internal interest, and absolutely nothing that we were looking for. The board will consider what kind of options we have going forward," Kokkari said.
Although he declined to provide details, he said the company had revenues of hundreds of millions of dollars.
Udemy and its rival Coursera Inc are among the beneficiaries, as the coronavirus pandemic is driving more people to try virtual courses. Udemy offers professional, technical and personal development courses, as well as a range of classes as diverse as cybersecurity and guitar.
Learn Capital Managing Partner Rob Hutter said Covid-19 has boosted Udemy's business tremendously.
"People spend more time in front of their computers," Hutter said. "They are using that 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 financing will help expand into new markets. It has offices in Denver, Brazil, India, Ireland, Turkey and California.
Kokkari said the epidemic had generated "five years of growth in five months" for Udemy's consumer business, and the company that serves large companies had grown this year.
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