If ever there was a darling of the subscription eLearning niche, it’s Lynda.com.
The site generated approximately $100 million in revenue in 2012, and has 2 million paying subscribers, many from companies like Sony, Pixar and Disney (and presumably, with group subscriptions).
And yet, unlike the many flash-in-the-pan Internet start-ups (Pinterest, I’m looking at you), the company has waited 17 years to ask for its first round of funding.
Which goes to show you, when it comes to the online subscription business, “get rich slowly” is probably the best motto to have.
Lynda.com will receive $103 million in growth equity from Accel Partners and Spectrum Equity, with contributions from Meritech Capital Partners. Accel and Spectrum will both get a seat on Lynda.com’s board of directors.
By starting out small (and before most people realized the profitability and popularity on online video training), Lynda.com has amassed more than 83,000 instructional videos, mainly on software and web development. And in fact, the site could likely keep going without the added influx of cash.
However, the funding will help the company’s expansion into international markets (a serious growth arena for eLearning sites, as our forthcoming Benchmark Report will highlight), and more business content, such as videos on negotiating and time management. And it will help create a handful of international studios for production.
But what I like most about Lynda.com’s business model is how it rewards its instructors. Once instructors are vetted, they are paid a base salary and then a share of the revenue generated by their content based on the video’s popularity. Currently, 20% of the site’s 250 instructors are able to earn their entire annual income from Lynda.com.
Get rich slowly and take as many people with you. Not a bad company philosophy.