AI startup RealityEngines.AI changed its name to Abacus.AI in July. At the same time, it announced a $13 million Series A round. Today, only a few months later, it is not changing its name again, but it is announcing a $22 million Series B round, led by Coatue, with Decibel Ventures and Index Partners participating as well. With this, the company, which was co-founded by former AWS and Google exec Bindu Reddy, has now raised a total of $40.3 million.
In addition to the new funding, Abacus.AI is also launching a new product today, which it calls Abacus.AI Deconstructed. Originally, the idea behind RealityEngines/Abacus.AI was to provide its users with a platform that would simplify building AI models by using AI to automatically train and optimize them. That hasn’t changed, but as it turns out, a lot of (potential) customers had already invested into their own workflows for building and training deep learning models but were looking for help in putting them into production and managing them throughout their lifecycle.
“One of the big pain points [businesses] had was, ‘look, I have data scientists and I have my models that I’ve built in-house. My data scientists have built them on laptops, but I don’t know how to push them to production. I don’t know how to maintain and keep models in production.’ I think pretty much every startup now is thinking of that problem,” Reddy said.
Image Credits: Abacus.AI
Since Abacus.AI had already built those tools anyway, the company decided to now also break its service down into three parts that users can adapt without relying on the full platform. That means you can now bring your model to the service and have the company host and monitor the model for you, for example. The service will manage the model in production and, for example, monitor for model drift.
Another area Abacus.AI has long focused on is model explainability and de-biasing, so it’s making that available as a module as well, as well as its real-time machine learning feature store that helps organizations create, store and share their machine learning features and deploy them into production.
As for the funding, Reddy tells me the company didn’t really have to raise a new round at this point. After the company announced its first round earlier this year, there was quite a lot of interest from others to also invest. “So we decided that we may as well raise the next round because we were seeing adoption, we felt we were ready product-wise. But we didn’t have a large enough sales team. And raising a little early made sense to build up the sales team,” she said.
Reddy also stressed that unlike some of the company’s competitors, Abacus.AI is trying to build a full-stack self-service solution that can essentially compete with the offerings of the big cloud vendors. That — and the engineering talent to build it — doesn’t come cheap.
Image Credits: Abacus.AI
It’s no surprise then that Abacus.AI plans to use the new funding to increase its R&D team, but it will also increase its go-to-market team from two to ten in the coming months. While the company is betting on a self-service model — and is seeing good traction with small- and medium-sized companies — you still need a sales team to work with large enterprises.
Come January, the company also plans to launch support for more languages and more machine vision use cases.
“We are proud to be leading the Series B investment in Abacus.AI, because we think that Abacus.AI’s unique cloud service now makes state-of-the-art AI easily accessible for organizations of all sizes, including start-ups,” Yanda Erlich, a p artner at Coatue Ventures told me. “Abacus.AI’s end-to-end autonomous AI service powered by their Neural Architecture Search invention helps organizations with no ML expertise easily deploy deep learning systems in production.”
Boston-based marketing automation firm Klaviyo wants to change the way marketers interact with data, giving them direct access to their data and their customers. It believes that makes it easier to customize the messages and produce better results. Investors apparently agree, awarding the company a $200 million Series C on a hefty $4.15 billion valuation today.
The round was led by Accel with help from Summit Partners. It comes on the heels of last year’s $150 million Series B, and brings the total raised to $385.5 million, according the company. Accel’s Ping Li will also be joining the company board under the terms of today’s announcement.
Marketing automation and communication takes on a special significance as we find ourselves in the midst of this pandemic and companies need to find ways to communicate in meaningful ways with customers who can’t come into brick and mortar establishments. Company CEO and co-founder Andrew Bialecki says that his company’s unique use of data helps in this regard.
“I think our success is because we are a hybrid customer data and marketing platform. We think about what it takes to create these owned experiences. They’re very contextual and you need all of that customer data, not some of it, all of it, and you need that to be tightly coupled with how you’re building customer experiences,” Bialecki explained.
Andrew Bialecki, CEO and co-founder at Klaviyo Image Credits: Klaviyo
He believes that by providing a platform of this scope that combines the data, the ability to customize messages and the use of machine learning to keep improving that, it will help them compete with the largest platforms. In fact his goal is to help companies understand that they don’t have to give up their customer data to Amazon, Google and Facebook.
“The flip side of that is growing through Amazon where you give up all your customer data, or Facebook or Google where you kind of are delegated to wherever their algorithms decide where you get to show up,” he said. With Klaviyo, the company retains its own data, and Ping Li, who is leading the investment at Accel says that it where the e-commerce market is going.
“So the question is, is there a tool that allows you to do that as easily as going on Facebook and Google, and I think that’s the vision and the promise that Klaviyo is delivering on,” Li said. He believes that this will allow their customers to actually build that kind of fidelity with their customers by going directly to them, instead of through a third-party intermediary.
The company has seen some significant success with 50,000 customers in 125 countries along with that lofty valuation. The customer number has doubled year over year, even during the economic malaise brought on by the pandemic.
Today, the company has 500 employees with plans to double that in the next year. As he grows his company, Bialecki believes diversity is not just the right thing to do, it’s also smart business. “I think the competitive advantages that tech companies are going to have going forward, especially for the tech companies that are not the leaders today, but [could be] leaders in the coming decades, it’s because they have the most diverse teams and inclusive culture and those are both big focuses for us,” he said.
As they move forward flush with this cash, the company wants to continue to build out the platform, giving customers access to a set of tools that allow them to know their own customers on an increasingly granular level, while delivering more meaningful interactions. “It’s all about accelerating product development and getting into new markets,” Bialecki said. They certainly have plenty of runway to do that now.
As companies work with data, one of the big obstacles they face is making sure they are not exposing personally identifiable information (PII) or other sensitive data. It usually requires a painstaking manual effort to strip out that data. Gretel, an early stage startup, wants to change that by making it faster and easier to anonymize data sets. Today the company announced a $12 million Series A led by Greylock. The company has now raised $15.5 million.
Gretel co-founder and CEO Alex Watson says that his company was founded to make it simpler to anonymize data and unlock data sets that were previously out of reach because of privacy concerns.
“As a developer, you want to test an idea or build a new feature, and it can take weeks to get access to the data you need. Then essentially it boils down to getting approvals to get started, then snapshotting a database, and manually removing what looks like personal data and hoping that you got everything,”
Watson, who previously worked as a GM at AWS, believed that there needed to be a faster and more reliable way to anonymize the data, and that’s why he started Gretel. The first product is an open source, synthetic machine learning library for developers that strips out personally identifiable information.
“Developers use our open source library, which trains machine learning models on their sensitive data, then as that training is happening we are enforcing something called differential privacy, which basically ensures that the model doesn’t memorize details about secrets for individual people inside of the data,” he said. The result is a new artificial data set that is anonymized and safe to share across a business.
The company was founded last year, and they have actually used this year to develop the open source product and build an open source community around it. “So our approach and our go-to-market here is we’ve open sourced our underlying libraries, and we will also build a SaaS service that makes it really easy to generate synthetic data and anonymized data at scale,” he said.
As the founders build the company, they are looking at how to build a diverse and inclusive organization, something that they discuss at their regular founders’ meetings, especially as they look to take these investment dollars and begin to hire additional senior people.
“We make a conscious effort to have diverse candidates apply, and to really make sure we reach out to them and have a conversation, and that’s paid off, or is in the process of paying off I would say, with the candidates in our pipeline right now. So we’re excited. It’s tremendously important that we avoid group think that happens so often,” he said.
The company doesn’t have paying customers, but the plan is to build off the relationships it has with design partners and begin taking in revenue next year. Sridhar Ramaswamy, the partner at Greylock, who is leading the investment, says that his firm is placing a bet on a pre-revenue company because he sees great potential for a service like this.
“We think Gretel will democratize safe and controlled access to data for the whole world the way Github democratized source code access and control,” Ramaswamy said.
Earlier this year, Mirantis, the company that now owns Docker’s enterprise business, acquired Lens, a desktop application that provides developers with something akin to an IDE for managing their Kubernetes clusters. At the time, Mirantis CEO Adrian Ionel told me that the company wants to offer enterprises the tools to quickly build modern applications. Today, it’s taking another step in that direction with the launch of an extensions API for Lens that will take the tool far beyond its original capabilities
In addition to this update to Lens, Mirantis also today announced a new open-source project: k0s. The company describes it as “a modern, 100% upstream vanilla Kubernetes distro that is designed and packaged without compromise.”
It’s a single optimized binary without any OS dependencies (besides the kernel). Based on upstream Kubernetes, k0s supports Intel and Arm architectures and can run on any Linux host or Windows Server 2019 worker nodes. Given these requirements, the team argues that k0s should work for virtually any use case, ranging from local development clusters to private datacenters, telco clusters and hybrid cloud solutions.
“We wanted to create a modern, robust and versatile base layer for various use cases where Kubernetes is in play. Something that leverages vanilla upstream Kubernetes and is versatile enough to cover use cases ranging from typical cloud based deployments to various edge/IoT type of cases.,” said Jussi Nummelin, Senior Principal Engineer at Mirantis and founder of k0s. “Leveraging our previous experiences, we really did not want to start maintaining the setup and packaging for various OS distros. Hence the packaging model of a single binary to allow us to focus more on the core problem rather than different flavors of packaging such as debs, rpms and what-nots.”
Mirantis, of course, has a bit of experience in the distro game. In its earliest iteration, back in 2013, the company offered one of the first major OpenStack distributions, after all.
As for Lens, the new API, which will go live next week to coincide with KubeCon, will enable developers to extend the service with support for other Kubernetes-integrated components and services.
“Extensions API will unlock collaboration with technology vendors and transform Lens into a fully featured cloud native development IDE that we can extend and enhance without limits,” said Miska Kaipiainen, the co-founder of the Lens open-source project and senior director of engineering at Mirantis. “If you are a vendor, Lens will provide the best channel to reach tens of thousands of active Kubernetes developers and gain distribution to your technology in a way that did not exist before. At the same time, the users of Lens enjoy quality features, technologies and integrations easier than ever.”
The company has already lined up a number of popular CNCF projects and vendors in the cloud-native ecosystem to build integrations. These include Kubernetes security vendors Aqua and Carbonetes, API gateway maker Ambassador Labs and AIOps company Carbon Relay. Venafi, nCipher, Tigera, Kong and StackRox are also currently working on their extensions.
“Introducing an extensions API to Lens is a game-changer for Kubernetes operators and developers, because it will foster an ecosystem of cloud-native tools that can be used in context with the full power of Kubernetes controls, at the user’s fingertips,” said Viswajith Venugopal, StackRox software engineer and developer of KubeLinter. “We look forward to integrating KubeLinter with Lens for a more seamless user experience.”
Video communication startup Livestorm announced today that it has raised $30 million in Series B funding.
Co-founder and CEO Gilles Bertaux told me that the company started out with a focus on webinars before launching a video meeting product as well (which we used for our interview).
“The way we think about it is, webinars and meetings are not use cases,” Bertaux said.
He argued that it’s more meaningful to talk about whether you’re having a team meeting or a training demo or whatever else, and then how many people you want to attend, with Livestorm supporting all of those use cases and meeting sizes through different templates: “We’re trying to remove the semantic distinction of meeting and webinar out of the equation.”
Among other things, Livestorm is distinguished from other video conferencing tools because it’s purely browser based, without requiring presenters or attendees install any software. The company says it has grown revenue 8x since it raised its 4.6 million euro Series A last fall, with a customer base that now includes 3,500 customers such as Shopify, Honda and Sephora.
Image Credits: Livestorm
Of course, you’d expect a video communication product to do well in 2020. At the same time, Zoom has dominated the remote work conversation this year — in fact, Bertaux acknowledged that Zoom may have built “the best video meeting technology.”
But he also suggested that the landscape is changing: “The thing is, we’re entering a period where video is becoming a commodity.”
So the Livestorm team is less focused on the core video technology and more on the experience around the video, with in-meeting features like screensharing and virtual background, as well as a broader suite of marketing tools that allow customers to continue delivering targeted messages to event attendees.
Bertaux compared Livestorm to HubSpot, which he said “didn’t reinvent landing pages,” but put the different pieces of the marketing stack together around those landing pages.
The Livestorm executive team
“In 2021, we want to have the biggest ecosystem of integrations on a video product,” he said.
The round was led by Aglaé Ventures and Bpifrance Digital Venture, with participation from Raise Ventures and IDInvest.
In a statement, Aglaé Ventures Partner Cyril Guenoun similarly described Livestorm “the HubSpot for video communications,” adding, “Video and online events have become essential in 2020, and are here to stay. The Livestorm platform thrives in this environment, providing a seamless solution for meetings and events with all the connectors that marketing, sales, customer service and HR pros need to make video a tightly integrated part of their communications strategies.”
Bertaux said the new funding will allow Paris-headquartered Livestorm to continue expanding into North America — apparently, the U.S. already represents one-third of its customer base and is the company’s fastest-growing region.
Inrupt, the startup from World Wide Web founder Tim Berners-Lee, announced an enterprise version of the Solid privacy platform today, which allows large organizations and governments to build applications that put users in control of their data.
Berners-Lee has always believed that the web should be free and open, but large organizations have grown up over the last 20 years that make their money using our data. He wanted to put people back in charge of their data, and the Solid open source project, developed at MIT, was the first step in that process.
Three years ago he launched Inrupt, a startup built on top of the open source project, and hired John Bruce to run the company. The two shared the same vision of shifting data ownership without changing the way websites get developed. With Solid, developers use the same standards and methods of building sites, and these applications will work in any browser. What Solid aims to do is alter the balance of data power and redirect it to the user.
“Fast forward to today, and we’re releasing the first significant technology as the fruits of our labor, which is an enterprise version of Solid to be deployed at scale by large organizations,” Bruce explained.
The core idea behind this approach is that users control their data in online storage entities called Personal Online Data Stores or Pods for short. The enterprise version consists of Solid Server to manage the Pods, and developers can build applications using an SDK to take advantage of the Pods and access the data they need to do a particular job like pay taxes or interact with a healthcare provider. Bruce points out that the enterprise version is fully compatible with the open source Solid project specifications.
The company has been working with some major organizations prior to today’s release including the BBC and National Health Service in the UK and the Government of Flanders in Belgium as they have been working to bring this to market.
To give you a sense of how this works, the National Health Service has been building an application for patients interacting with them, who using Solid can control their health data. “Patients will be able to permit doctors, family or at-home caregivers to read certain data from their Solid Pods, and add caretaking notes or observations that doctors can then read in order to improve patient care,” the company explained.
The difference between this and more conventional web or phone apps is that it is up to the user who can access this information and the application owner has to ask the user for permission and the user has to explicitly grant it and under what conditions.
The startup launched in 2017 and has raised about $20 million so far. Bruce and Berners-Lee understand that for this to take root, it has to be easy to use, be standards-based and and have the capacity to handle massive scale. Anyone can download and use the open source version of Solid, but by having an enterprise version, it gives large organizations like the ones they have been working with the support, security and scale that these companies require.
When large parts of the world were shutting down in March, we really didn’t know how we would move massive numbers of employees used to working in the office to work from home.
In early March, I wrote a piece on how to prepare for such an eventuality, speaking to several experts who had a background in the software and other tooling that would be involved. But the shift involved so much more than the mechanics of working at home. We were making this transition during a pandemic that was forcing us to deal with a much broader set of issues in our lives.
Yet here we are seven months later, and surely we must have learned some lessons along the way about working from home effectively, but what do these lessons look like and how can we make the most of this working approach for however long this pandemic lasts?
I spoke to Karen Mangia, vice president of customer and market insights at Salesforce and author of the book, Working from Home, Making the New Normal Work for You, to get her perspective on what working from home looks like as we enter our eighth month and what we’ve learned along the way.
As employees moved home in March, managers had to wonder how productive employees would be without being in the office. While many companies had flexible approaches to work, this usually involved some small percentage of employees working from home, not the entire workforce, and that presented challenges to management used to judging employee performance based for the most part on being in the building during the work day.
One of the things that we looked at in March was putting the correct tools in place to enable communication even when we weren’t together. Mangia says that those tools can help close what she calls the trust gap.
“Leaders want to know that their employees are working on what’s expected and delivering outcomes. Employees want to make sure their managers know how hard they’re working and that they’re getting things done. And the technology and tools I think help us solve for that trust gap in the middle,” she explained.
She believes the biggest thing that individuals can do at the moment is to simply reassess and look for small ways to improve your work life because we are probably not going to be returning to the office anytime soon. “I think what we’re discovering is the things that we can put in place to improve the quality of our own experiences as employees, as learners and as leaders can be very simple adjustments. This does not have to be a five year, five phase, $5 million roadmap kind of a situation. Simple adjustments matter,” she said, adding that could be measures as basic as purchasing a comfortable chair because the one you’ve been using at the dining room table is hurting your back.
As the pandemic rages on, companies are looking for an edge when it comes to sales. Having the right data about the customers most likely to convert can be a huge boost right now. Slintel, an early-stage startup building a sales intelligence tool, announced a $4.2 million seed round today.
The investment was led by Accel with help from Sequoia Capital India and existing investor Stellaris Venture Partners. The company reports it has now raised $5.7 million, including a pre-seed round last year.
Deepak Anchala, company founder and CEO, says that while sales and marketing teams are trying to target a broad market, most of the time their emails and other forms of communication with customers fall flat. As a sales person in previous startups, Eightfold and Tracxn, this was a problem Anchala experienced first hand. He believed with data, he could improve this, and he started Slintel to build a tool to provide the sales data that he was missing in these previous positions.
“We focus on helping our customers solve that [lack of data] by identifying people with high buying intent. So we are able to tell sales and marketing teams, for example, who is most likely to buy your product or your service, and who is most likely to buy your product today, as opposed to two months or six months from now,” Anchala explained.
They do this by looking at signals that might not be obvious, but which let sales teams know key information about these companies and their likelihood of buying soon. He says that every company leaves a technology footprint. This could be data from SEC filings, annual reports, job openings and so forth.
“In today’s world there is an enormous amount of footprint left online when a company uses a certain product. So what our algorithms do is we map that at scale for about 15 million companies to all the products that they’re using from the different sources we are able to identify — and we track it all from week to week,” he said.
The company has 45 employees today and expects to double that number by the end of 2021. As he builds the company, especially as an immigrant founder, Anchala wants to build a diverse and inclusive organization.
“I think one of the key successes for companies today is having diversity. We have a global workforce, so we have a workforce in the U.S. and India and we want to capitalize on that. In the next phase of hires we are looking at hiring more diverse candidates, more female employees and people of different nationalities,” he said.
The company, which was founded in 2018, and emerged from stealth last year, has amassed 100 enterprise customers and has seen most of the customers actually come on board this year as COVID has forced companies to find ways to be more efficient with their sales processes.
Intel continues to snap up startups to build out its machine learning and AI operations. In the latest move, TechCrunch has learned that the chip giant has acquired Cnvrg.io, an Israeli company that has built and operates a platform for data scientists to build and run machine learning models, which can be used to train and track multiple models and run comparisons on them, build recommendations and more.
Intel confirmed the acquisition to us with a short note. “We can confirm that we have acquired Cnvrg,” a spokesperson said. “Cnvrg will be an independent Intel company and will continue to serve its existing and future customers.” Those customers include Lightricks, ST Unitas and Playtika.
Intel is not disclosing any financial terms of the deal, nor who from the startup will join Intel. Cnvrg, co-founded by Yochay Ettun (CEO) and Leah Forkosh Kolben, had raised $8 million from investors that include Hanaco Venture Capital and Jerusalem Venture Partners, and PitchBook estimates that it was valued at around $17 million in its last round.
It was only a week ago that Intel made another acquisition to boost its AI business, also in the area of machine learning modeling: it picked up SigOpt, which had developed an optimization platform to run machine learning modeling and simulations.
While SigOpt is based out of the Bay Area, Cnvrg is in Israel, and joins an extensive footprint that Intel has built in the country, specifically in the area of artificial intelligence research and development, banked around its Mobileye autonomous vehicle business (which it acquired for more than $15 billion in 2017) and its acquisition of AI chipmaker Habana (which it acquired for $2 billion at the end of 2019).
Cnvrg.io’s platform works across on-premise, cloud and hybrid environments and it comes in paid and free tiers (we covered the launch of the free service, branded Core, last year). It competes with the likes of Databricks, Sagemaker and Dataiku, as well as smaller operations like H2O.ai that are built on open-source frameworks. Cnvrg’s premise is that it provides a user-friendly platform for data scientists so they can concentrate on devising algorithms and measuring how they work, not building or maintaining the platform they run on.
While Intel is not saying much about the deal, it seems that some of the same logic behind last week’s SigOpt acquisition applies here as well: Intel has been refocusing its business around next-generation chips to better compete against the likes of Nvidia and smaller players like GraphCore. So it makes sense to also provide/invest in AI tools for customers, specifically services to help with the compute loads that they will be running on those chips.
It’s notable that in our article about the Core free tier last year, Frederic noted that those using the platform in the cloud can do so with Nvidia-optimized containers that run on a Kubernetes cluster. It’s not clear if that will continue to be the case, or if containers will be optimized instead for Intel architecture, or both. Cnvrg’s other partners include Red Hat and NetApp.
Intel’s focus on the next generation of computing aims to offset declines in its legacy operations. In the last quarter, Intel reported a 3% decline in its revenues, led by a drop in its data center business. It said that it’s projecting the AI silicon market to be bigger than $25 billion by 2024, with AI silicon in the data center to be greater than $10 billion in that period.
In 2019, Intel reported some $3.8 billion in AI-driven revenue, but it hopes that tools like SigOpt’s will help drive more activity in that business, dovetailing with the push for more AI applications in a wider range of businesses.
Online education tools continue to see a surge of interest boosted by major changes in work and learning practices in the midst of a global health pandemic. And today, one of the early pioneers of the medium is announcing some funding as it tips into profitability on the back of a pivot to enterprise services, targeting businesses and governments who are looking to upskill workers to give them tech expertise more relevant to modern demands.
Udacity, which provides online courses and popularized the concept of “Nanodegrees” in tech-related subjects like artificial intelligence, programming, autonomous driving and cloud computing, has secured $75 million in the form of a debt facility. The funding will be used to continue investing in its platform to target more business customers.
Udacity said that part of the business is growing fast, with Q3 bookings up by 120% year-over-year and average run rates up 260% in H1 2020.
Udacity said that customers in the segment include “five of the world’s top seven aerospace companies, three of the Big Four professional services firms, the world’s leading pharmaceutical company, Egypt’s Information Technology Industry Development Agency, and three of the four branches of the United States Department of Defense”, which work with Udacity to build tailor-made courses for their specific needs, as well as use off-the-shelf content from its catalogue.
Udacity also works with companies to build programs as part of their CSR remits, and with tech companies like Microsoft to build programs to get more developers using their tools.
“We’re seeing tremendous demand on the enterprise and government side,” said Gabe Dalporto, Udacity’s CEO who joined the company in 2019. “But to date it’s mostly been inbound, with enterprises, Fortune 500 companies and government organizations coming in and wanting to work with us. Now it’s time to build out a sales team to go after them.”
The news today is a welcome turn of events for a company that has been in the spotlight over the years for less rosy reasons, partly because it found it challenging to land on a profitable business model.
Founded nearly a decade ago by three robotics specialists including Sebastian Thrun, the Stanford professor who at the time was instrumental in building and running Google’s self-driving car and larger moonshot programs, Udacity initially saw an opportunity to partner with colleges and universities to build online tech courses (Thrun’s academic standing, and the vogue for MOOCs, were possibly two fillips for that strategy).
After that proved to be too challenging and costly, Udacity pivoted to positioning itself as a vocational learning provider targeting adults, specifically those who didn’t have the hours or money to embark on full-time courses but wanted to learn tech skills that could help them land better jobs.
That resulted in some substantial user growth, but still no profit. Eventually, the company faced multiple rounds of layoffs as it restructured and gravitated closer to its current form.
Currently, the company still provides direct-to-consumer (direct-to-learner?) courses, but it won’t be long, Dalporto said, before enterprise and government customers account for about 80% of the company’s business.
Previously, Udacity had raised nearly $170 million from a pretty illustrious group of investors that include Andreessen Horowitz, Ballie Gifford, CRV, Emerson Collective and more. This latest tranche is coming in the form of a debt facility from a single company, Hercules Capital.
Dalporto said the decision to take the debt route came after initially getting a number of term sheets for an equity round.
“We had multiple term sheets on the equity side, but then we received an unsolicited debt term sheet,” he said. That led to the company modelling out the cost of capital and dilution, he said, and “it turned out it was the better option.” For now, he added, equity was “off the table” but it may consider revisiting the idea en route to a public listing. “For the foreseeable future, we are cash flow positive so there is no compelling reason right now, but we might do something closer to an IPO.”
Being a debt facility, this funding does not mean a revisiting of Udacity’s valuation. The company was last capitalized five years ago at $1 billion, but Dalporto would not comment on how that had changed in the (uncompleted) equity term sheets it had received.
Education is in session
The interest Udacity is seeing — both from investors and as a company — is part of the bigger spotlight that online education companies have had in the last year. In K-12 and university education, the focus has been on building better technology and content to help students stay engaged and continue learning even when they cannot be in their normal physical classrooms as schools, districts, governments and public health officials implement social distancing to slow the spread of COVID-19.
But that’s not the only classroom where online education is getting called on. In the world of business, organizations that have also gone remote because of the pandemic are facing a matrix of challenges. How can they keep employees productive and feeling like part of a team when they no longer work next to each other? How do they make sure their workforces have the skills they need to work in the new environment? How do they make sure their own businesses are equipped with the right technology, and the expertise of people to run it, for this latest and future iterations of “work”? And how can governments make sure their economies don’t fall off a cliff as a result of the pandemic?
Online education has been seen as something of a panacea for all of these questions, and that has spelled a lot of opportunity for tech companies building online learning tools and other infrastructure — with others including the likes of Coursera, LinkedIn, Pluralsight, Treehouse and Springboard in the area of tech-related courses and learning platforms for workers.
As with other market segments like e-commerce, this isn’t about a trend emerging out of the blue, but about it accelerating much faster than people projected it would.
“Given Udacity’s growth, focus on sustainable business practices, and expanding reach across multiple industries, we are excited to provide this investment. We look forward to working with the company to help them sustain their impressive global growth, and continued innovation in upskilling and reskilling,” said Steve Kuo, Senior MD and Technology Group Head at Hercules Capital, in a statement.
In the areas of enterprise and government, Dalporto described a number of scenarios where Udacity is already active, which are natural progressions of the kind of vocational learning it was already offering.
They include, for example, the energy company Shell retraining structural and geological engineers “who had good math skills but no machine learning expertise” to be able to work in data science, needed as the company builds more automation into its operation and moves into new kinds of energy technology.
And he said that Egypt and other nations — looking to the success that India has had — have been providing technology expertise training to residents to help them find jobs in the “outsourcing economy.” He said that the program in Egypt has seen an 80% graduation rate and 70% “positive outcomes” (resulting in jobs).
“If you take just AI and machine learning, demand for these skills is growing at a rate of 70% year-over-year, but there is a shortage of talent to fill those roles,” Dalporto said.
Udacity is for now not looking at any acquisitions, he added, for another 6-12 months. “We have so much demand and work to do internally that there is no compelling reason to do that. At some point we will look at that but it needs to be linked to our strategy.”