Udacity, with eye to eventual IPO, says revenue more than doubled in 2017

SAN FRANCISCO (Reuters) - Online education company Udacity, which offers courses in high-tech subjects such as machine learning, said on Tuesday it more than doubled its annual revenue last year and added about 34,000 new students to its online degree programs.

The company, founded by Sebastian Thrun, one of Silicon Valley’s pioneers in self-driving cars, said it increased revenue to $70 million in 2017 from $29 million the prior year. The privately held company has never before publicly released its revenue numbers.

Chief Executive Officer Vishal Makhijani said in an interview that Udacity’s aspirations to one day become a public company prompted the startup to release a small slice of its financial information, in hopes of giving investors confidence in its business model.

California-based Udacity started in 2014 offering online courses, which last six months on average, in technology fields including self-driving cars, flying cars and robotics.

Makhijani, who replaced Thrun as CEO two years ago, said the revenue growth was fueled by student enrollment, which last year grew to more than 50,000 from 16,000. Udacity generates most of its revenue from tuition, which ranges from about $1,000 to $2,400 for a course.

Udacity said it places graduates in tech industry jobs through partnership with more than 120 companies including Alphabet Inc GOOGL.O, Lyft Inc, Uber Technologies Inc, Inc AMZN.O, Mercedes Benz and Nvidia Corp NVDA.O.

Makhijani said the talent pool is not big enough to satisfy the demands from tech companies.

“The supply-demand imbalance is so out of whack,” he said.

Because the company is still young, it is unclear how Udacity graduates perform compared to other employees in their field.

Many Udacity students work in the technology industry but want to learn new skills, like how to build software for self-driving cars, Makhijani said. Others recognize that their jobs will soon be replaced by automation and want to change careers.

“It’s no longer that you get educated once and it lasts a lifetime,” Makhijani said. “Technology trends are compressing the period of time that skills are marketable.”

Udacity is not profitable, but still has more than $100 million from investors in the bank, Makhijani said. Udacity has offices in India, China, Germany and the United Arab Emirates.

The company has raised $163 million to date and was valued at $1 billion at its last funding round. It is backed by Andreessen Horowitz, Drive Capital and Alphabet’s venture capital arm, GV, among other investors.

Reporting by Heather Somerville; Editing by Leslie Adler