Posted on Thursday, Jan 22nd 2015
Continuing with our coverage on Billion Dollar Unicorns, here is an EdTech company Pluralsight, which has successfully bootstrapped their business and followed a roll-up strategy with additional funding to move closer to becoming a proud member of the club.
Cedar Valley, Utah-based Pluralsight was founded in 2004 when Aaron Skonnard along with other partners realized that their passion lay in wanting to “change the world” through online professional training. They formed Pluralsight out of their years of experience in the professional software developer training market. Initially, they did not know how they would offer better training, but they wanted to develop a cost-efficient business model. They began their operations by sending trainers onsite to client locations, but soon realized that it was no different from what others were doing. While evaluating options to revolutionize training, the founding team came up with the idea of creating an online training module for software developers. They realized that they could essentially publish training packages and sell them worldwide, thus making the business model scaleable.
Pluralsight also ensured that the authors of their training material were rewarded fairly by paying them a royalty fee based on the popularity of the titles. The model was accepted by the trainers and soon Pluralsight’s content library took off.
Their library began with 10 courses based on Microsoft.Net and Microsoft technologies. Today, they have more than 600 authors and over 3,500 courses in their library. The courses are available in English with subtitles in 50 different languages and their 750,000 users are spread across 150 countries. More than 7,500 businesses are already using Pluralsight as their training module provider.
Pluralsight earns revenues through a subscription-based model. Prices begin at $29 a month that grant users unlimited access to their entire library. Premium plans of $49 a month allow users to download exercise files, view the course material offline, and participate in pre and post-course assessments. Pluralsight also has enterprise-focused subscriptions that start at $299 per user per year.
Their revenues have grown from $6 million in 2011 to $16 million by the year 2012. Revenues increased to $38 million in 2013 and analysts expect that the company ended last year with revenues of $85 million. They are expected to record revenues of over $100 million this year.
Pluralsight bootstrapped their operations with $5,000 from each of their founders. It was only in 2013 that they brought in their Series A funding. Till date, Pluralsight has raised $165 million in funding from investors including Sorenson Capital, Iconiq Capital, and Insight Venture Partners. Their last round of funding was held in August 2014 when they raised $135 million at a valuation of close to $1 billion. In December 2012, they were valued at a comparatively modest $100 million.
Analysts predict that the online education industry will be worth $107 billion by the end of the year. Pluralsight is focused on expanding their content and footprint in this market.
Last year, they acquired Digital-Tutors for an estimated $45 million to cater to media software training. Digital-Tutors is focused on creating training courses for media and design and had over 1,500 courses at the time of the acquisition. They also bought skills assessment startup Smarterer for an estimated $75 million. Smarterer has created a simple approach to test a user’s professional knowledge skills in as few as 10 questions and socially share in a mere 120 seconds. Smarterer doesn’t have much revenue, but the rationale for the acquisition is to help enhance engagement and conversion through efficient assessment technology.
Pluralsight has an impressive story of growth. You can hear more from their CEO and founder Aaron Skonnard in this roundtable recording where we discuss both his bootstrapping strategy, as well as financing and roll-up strategy:
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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