Udacity names former LendingTree executive to CEO post

Published August 26, 2019

Online education startup Udacity has hired former LendingTree executive Gabriel Dalporto as its new CEO, an appointment that follows months of layoffs and a restructuring directed by the company’s co-founder and executive chairman Sebastian Thrun.

Dalporto comes to Udacity after seven years at LendingTree, where he served in numerous positions, including chief marketing officer and chief financial officer. Dalporto stepped down as CFO in 2017 to join the company’s board and become executive advisor to the CEO. Dalporto left the executive advisor job in 2018, but remains on the board.

Thrun stepped in as executive chairman and took over operations at Udacity after Vishal Makhijani left the top post in October 2018. The CEO position has remained vacant since Makhijani left. Thrun will remain as executive chairman now that the CEO spot has been filled.

“He’s extremely strategic and pragmatic,” Thrun said in a recent interview, describing Dalporto.

Dalporto is known for his turnaround skills. But the new CEO says his focus at Udacity won’t be slashing costs and other activities often associated with that skill set.

“I was hired as a growth executive; I was not hired to be a turnaround executive,” Dalporto told TechCrunch.

Dalporto isn’t ready to provide details of his plans as CEO. Monday is his first day at the startup. But he will likely focus on growth areas such as the startup’s enterprise and government programs, as well as retaining and recapturing students into the Udacity ecosystem. Udacity’s enterprise clients include AT&T, Airbus, Audi, BMW, Capital One, Cisco and the Royal Bank of Scotland. It also has government relationships with Australia, the MENA region and New Zealand.

Dalporto is coming into a startup that is leaner and more productive, in terms of launching new nanodegrees, than it was a year ago. It’s also cash-flow positive, according to Thrun, who has spent 2019 revamping the company.

When Thrun took over as executive chairman and assumed operations and a search for a CEO, he found a company that had grown too quickly and was burdened by its own bureaucracy. Udacity, which specializes in “nanodegrees” on a range of technical subjects that include AI, deep learning, digital marketing, VR and computer vision, was struggling because of runaway costs and other inefficiencies. Its nanodegree programs, which had grown in 2017, became sluggish in 2018.

Staff reductions soon followed as Thrun sought to get a handle on costs. About 130 people were laid off and other open positions were left vacant. Thrun then cut further in April. About 20% of the staff was laid off and operations were restructured in an effort to bring costs in line with revenue without curbing growth. The company streamlined its marketing efforts and downsized and consolidated office space. As of April, the startup employs 300 full-time equivalent employees and about 60 contractors.

Other changes included the launch of a global technical mentoring program, switching its direct-to-student business from fixed to monthly subscription pricing to incentivize individuals to move through courses faster. Lalit Singh, who joined Udacity in February as chief operating officer, has been critical to the turnaround, according to Thrun.

Its productivity has also improved. In first six months of 2019, Udacity launched 12 new nanodegree programs compared to just 8 in all of 2018.

“In the three months since we’ve initiated these changes, the consumer business has grown by more than 60%,” Thrun wrote in a blog post Monday announcing the changes.

Udacity’s enterprise and government programs have also grown, with bookings increasing by more than 100% year over year.

Clarification: Thrun was never officially the CEO. He was at the helm of all activities at Udacity, but under the role of executive chairman, a position he is keeping.

FutureLearn takes $65M from Seek Group for 50% stake in UK online degree platform

Published April 29, 2019

Edtech and recruitment continue to converge. London-based online degree platform, FutureLearn, is taking £50 million (~$64.6M) from Australian-based online job matching group, Seek, in exchange for a 50 per cent stake in the business — just days after the same group led a massive Series E in U.S. online learning giant Coursera.

U.K. distance learning veteran, the Open University — which had wholly owned the FutureLearn platform up til now — retains a 50 per cent stake in the business following the Seek Group investment.

In a press release announcing the news, FutureLearn said the investment values it at £100M ($129M) — some six years after the initiative was first announced, with the OU bringing together a consortium of U.K. universities to attack the MOOCs/online learning space which was then being rapidly expanded by U.S. edtech startups.

“Our partnership with Seek and the investment in FutureLearn will take our unique mission to make education open for all into new parts of the world. Education improves lives, communities and economies and is a truly global product, with no tariffs on ideas,” said OU vice chancellor Mary Kellett in a statement on the investment.

The joint venture will have “contractual arrangements” to protect its academic independence, teaching methods and curriculum, the OU added — in an attempt to assuage concerns about an (overly) commercially minded takeover of its fledgling digital education platform.

The first FutureLearn courses launched in fall 2013. Since then a cumulative total of nine million+ people have signed up to learn via its platform — which now offers around 2,000 courses in all.

This includes short courses; postgraduate diplomas and certificates; all the way up to fully online degrees. (FutureLearn partners with six U.K. universities on the full degree courses at this stage.)

FutureLearn also has partnerships with management consultancy firm Accenture; the British Council; the Chartered Institute of Personnel and Development; learn-to-code foundation Raspberry Pi; and Health Education England (part of the UK’s National Health Service); and is involved in U.K. government-backed initiatives to address skills gaps — including The Institute of Coding and the National Centre for Computing Education.

Last fall the Financial Times reported that the OU was looking for a £40M capital injection for FutureLearn to fund more courses and better compete with the scale of U.S. edtech giants — like Coursera and Lynda.com.

It’s not clear how many more courses FutureLearn plans to add with its new partner on board; a spokesperson told us it is not able to provide a figure at this stage.

For a little comparative context, some 40M people have taken online classes via Coursera to date — with that platform currently offering some 3,200 courses, and partnering with the likes of Columbia University, Johns Hopkins and the University of Michigan. While Coursera’s $103M in Series E reportedly valued its business at well over a $1BN, with Seek coming on board as a strategic investor.

The shared investor is an interesting but perhaps not surprising development given the different markets involved, and the challenge of monetizing free-to-access courses without having massive scale — suggesting the Seek group, which is already well established across Australia, New Zealand, China, South East Asia, Brazil and Mexico — sees more opportunities from strengthening regional online learning platform plays, in Europe and the U.S., to grow the overall online learning pipe and expand adjacent cross-marketing options in employment/job matching.

Last week, when its strategic investment in Coursera was announced, the Seek group talked effusively about how edtech platforms enabling up-skilling and re-skilling are “aligned” with its employment-focused business mission. (Or “our purpose of helping people live fulfilling working lives”, as it put it.)

The FutureLearn partnership provides Seek with access to another pool of potential job seekers — including actively engaged learners in the UK/Europe — to further grow the geographical reach of its recruitment platform.

Commenting on the investment in a statement, Seek co-founder and CEO Andrew Bassat said: “Technology is increasing the accessibility of quality education and can help millions of people up-skill and re-skill to adapt to rapidly changing labour markets. We see FutureLearn as a key enabler for education at scale.”

“FutureLearn’s reputation is strong and it has attracted leading education providers onto its platform. We are excited to come on as a partner with The Open University,” he added.

FutureLearn’s CEO Simon Nelson said the joint venture will allow the learning platform to extend its global reach and impact.

“This investment allows us to focus on developing more great courses and qualifications that both learners and employers will value,” he said in a statement. “This includes building a portfolio of micro-credentials and broadening our range of flexible, fully online degrees and being able to enhance support for our growing number of international partners to empower them to build credible digital strategies, and in doing so, transform access to education.”