Pluralsight, an online training resource targeting professional developers, is today announcing its first outside funding, courtesy of a $27.5 million investment from Insight Venture Partners. The additional capital will help Pluralsight fund the expansion of its course library and will be used for hiring.
Salt Lake City-based Pluralsight was founded back in 2004 by Aaron Skonnard (CEO), Fritz Onion (Editor in Chief), Keith Brown (CTO), and Bill Williams (who’s no longer there). The company got its start as a classroom training outfit that once involved sending out an instructor to a business or having employees attend a training event. Three years in, it shifted the business model from in-person training to online learning.
Today, Pluralsight offers over 400 web-based courses, beginning at $29 per month for individuals, who account for half of the company’s revenue stream. That monthly fee provides access to Pluralsight’s entire online library, and for a bit more – $49 per month – mobile access with offline viewing is provided. Business and enterprise plans are also available, with discounts for companies buying more than 25 licenses. Pluralsight has an extensive partnership with Microsoft, its biggest corporate customer, involving several different groups across Microsoft, including MSDN, DreamSpark, BizSpark, WebsiteSpark, asp.net, and Engineering Excellence.
The system is also frequently used by engineers at Salesforce, Twitter, Facebook, Bank of America, Dell, EMC, Walt Disney, and KPMG.
According to Skonnard, the new funding will be used to expand the catalog of course materials, with a specific focus on building up its Salesforce offerings, where it expects to offer 50 courses by year-end 2013, up from the few it has now. “Salesforce is a great example of a developer community that’s under-developed in our library today,” says Skonnard. He notes that Pluralsight is currently strong in Microsoft technologies, Java, Android and iOS, but Salesforce’s developer community will probably reach a million developers sometime in the next few months. “We started to take notice of them earlier [in 2012] as an emerging, high-revenue part of the market that we could invest in heavily,” he explains.
Pluralsight will also invest in developing courses for social platform technologies like Twitter and Facebook, as well as in Java, Android, Ruby, PHP, and Python, as well as cloud platforms like Amazon’s AWS, Google App Engine, Windows Azure and others.
On the surface, it looks like Pluralsight has a lot of competition in the heating-up online education market. This sector saw a number of notable investments in 2012, including Coursera’s $16 million raise in April, 2tor’s $26 million Series D, Minerva’s $25 million, Desire2Learn’s massive $80 million round in September, Udacity’s $15 million Series B in October, and Udemy’s $12 million Series B in December (also an Insight-led deal), to name a few. In addition, the “learn to code” niche itself offers a variety of resources, like Codecademy, Code School, Programr, Treehouse, and more, all aimed at those who are looking to develop programming skills.
But Pluralsight is a bit different than many of its code-training competitors. Instead of providing DIY courses for newbies, its focus is on the serious developer. The site even warns those unprepared for that level of training to “click the back button.” Skonnard tells us that he thinks the company’s real competitors are not the startups trying to bring university courses online, but rather those with similar catalogs who are targeting developers looking to expand their skills. He sees Treehouse and the Adobe-focused Lynda.com as being the top competitors on that front. He also wasn’t concerned with Insight’s new investment in Udemy, saying its model is very different from Pluralsight. “Anyone can go in there and write a course on anything, without having any credentials,” Skonnard explains. “Our business is 100 percent focused on content curation – that’s our value-add.”
Meanwhile, Codeacademy is only worrisome from the “PR perspective,” he adds, explaining that the site got a lot of attention, but it was still unclear if the model would work. “They’re doing a lot of good for the online education world, but they’re not producing paychecks for people,” Skonnard says. Pluralsight’s 100 authors, however, average $9,000-$10,000 in royalties per quarter, he notes. The average royalty payment is 20 percent, which the author receives in addition to the one-time, course-delivery fee. “This is where we win over [our competitors]. This is the reason we’re able to get the best people,” claims Skonnard.
“Our authors make a lot of money. Our top author is going to make over $500,000 to $600,000 this year,” he adds. “Our top 10 authors are averaging $40-50K per quarter – so anywhere from $150,000 to $200,000 per year. “
The site has now attracted over 200,000 users from 100 countries worldwide, and sees significant traction in the U.S., UK, Scandinavian countries, India, Canada, and Australia.
The company just hired a director of sales for India, and will open its first office there in a week. Pluralsight has to now only had contract sales reps in the country, as well as reps in London and elsewhere in Europe. Its sales team is currently five field reps and five inside sales reps, but the latter will triple in early 2013. In total, Pluralsight expects to double its 22-person team over the next six months.