Udacity nabs another $15M to bring more interactivity to online education

Udacity, the online learning platform founded by former Stanford professor and Google X founder Sebastian Thrun, announced on Thursday that it has raised an additional $15 million in Series B funding. The round, led by Andreessen Horowitz and including existing funders Charles River Ventures and Steve Blank, brings the company’s total venture funding to $22.1 million.

Since launching in January, Udacity has enrolled more than 750,000 students and offers 14 classes. But Thrun said the company’s first phase was primarily about learning how best to teach online and now its plan is TO focus on specific customer segments and build out the company so that it’s able to educate at scale and make money.

“We firmly believe that when you teach online, the medium is so different that just replicating lectures is not that inspirational,” he said. “Our data confirms this. “

Instead of just providing basic online video courses, he said, Udacity’s goal is to offer engaging, game-driven instruction that “challenges students to learn solutions not by watching a professor but by figuring it out for themselves.” (Some of the platform’s classes still rely on basic lectures and white board scribbles, but an example here demonstrates a course with more highly produced video, interactivity and animation.)

With the new funding, the company said it plans to enhance its interactive course architecture, including adding new environments for programming classes and scaling course and student analytics.

In the last year, several free online learning platforms, including Coursera, edX (the partnership between Harvard and MIT), Khan Academy and Codecademy, have raised funding or gained momentum.  Coursera, in particular, has been compared to Udacity because both startups were founded by Stanford professors. And since its official launch in April, Coursera has surpassed 1.7 million enrolled students and offers 200 courses.

But while Coursera offers classes in a range of disciplines – from science and technology to history and literature – Udacity wants to focus exclusively on the STEM (science, technology, engineering and math) subjects and business.

“There’s a huge shortage of skilled labor in the engineering space and it’s getting worse,” said Thrun.

Udacity’s pitch is that it can partner with industry leaders, such as Google, NVIDIA, Microsoft, Autodesk and others, to offer online classes that are not necessarily available at educational institutions that tend to move more slowly. The startup plans to make money by certifying students at offline proctored testing centers and helping employers find candidates with the skills that match their needs. So far, Thrun said it has actively helped 20 Udacity students find employment and that the number of students who have taken advantage of the offline testing centers is in the dozens. But as more schools accept Udacity courses for credit and as more employers recognize the value of online education the company obviously expects those numbers to rise.

Thrun also said that while the largest percentage of Udacity students are in the U.S. and North America, they have a strong following in Europe (especially the U.K. and Germany), as well as Brazil and India.