Udemy’s 2021: Half a Billion Revenue, B2B Revenue Soars, B2C Plateaus

Udemy Revenues

Udemy Revenue Segment Breakdown

2019 2020 2021

Total $276.3m $429.9m $515.7m

Consumer $225.5m $326.4m $328.7m

Business $50.9m $103.4m $187.0m

Net Loss ($69.7m) ($77.6m) ($80.03m)

In 2021, Udemy revenues grew by 21% to $515.7m. The majority of the growth came from Udemy Business (UB), which grew by 81%. UB now accounts for 36% of Udemy’s revenue, compared to 24% in 2020. 

This trend is similar to what we see for Coursera.

The Consumer segment, on the other hand, just grew by 1%.

For its 2022 outlook, Udemy projects that UB will grow to $300–310m while Consumer will at best basically remain the same with projections in the $310–$330m range.

Already in Q4 2021, UB accounted for 42% Udemy’s revenues and will possibly eclipse Consumer in 2022.

61% of Udemy’s revenue originates outside North America and Udemy estimates that the majority of its instructors are based outside the US.

No single country besides the US represents 10% or more of the company’s total revenue.

Decrease in Monthly Average Buyers

On average, every month, 1.345 million learners bought a course on Udemy in 2021, down from 1.439 million in 2020.

Similarly to 2U, Udemy enrollments dropped from 1.411 to 1.316 million in Q2 2021. This further gives weight to my theory that Google algorithm might be at the heart of this drop in numbers.

Another reason for the decline in Monthly Avg Buyers may be the increase in the price of Udemy’s courses. I suspect we will see this trend continue in 2022.

Instructor Revenue Share

One of the trends that I noticed after reading the annual reports of Coursera and Udemy is that platforms are keeping a larger proportion of the revenue.

In other words, an increase in revenue doesn’t necessarily translate to a similar increase in payments to content creators.

In Coursera’s case, I discovered that even though the company’s Consumer revenue increased by $53.3 million in 2021, the payments to Content Creators for the Consumer segment declined.

In Udemy’s case, a 21% increase in revenue resulted in a 9.6% increase in instructor earnings. If both rates were similar, Udemy instructors would have cumulatively made $18 million more.

In 2021, Udemy instructors earned  $176.9 million, up from $161.4 million a year before.

$10 Million Investment

In their annual report, Udemy mentioned that in October 2021, they made a “strategic investment” of  $10 million in another online education platform.

They didn’t mention it by name, but a couple of weeks ago my colleague @ruima, who reports about the Chinese online education ecosystem for Class Central, shared an article about Udemy’s investment in the Series C for Sanjieke, which is also known as “China’s Udemy”.

Lawsuit Update

Udemy’s annual report also touched on the latest developments in a class action lawsuit filed against the company in mid 2021. The lawsuit alleges that Udemy engaged in unfair competition through misleading discounts. The report’s update signals compromise, with both parties currently favoring arbitration over court, for the time being at least.

Here’s how the report puts it:

Udemy Headcount

As of December 31, 2021, Udemy had 1,238 full-time employees, up from 1,031 employees in June 2021, as reported in Udemy’s S-1, the company’s IPO filing.