Degreed Scores $42M to Grow Worker Training and Skills Platform
Degreed, a portal to online education and training resources for employers who want their workers to keep learning, announced today that it raised $42 million in a Series C fundraising round.
The new capital, which brings Degreed’s fundraising total to $75 million, will fund a salesforce expansion that could make the company profitable within a few years, says Degreed co-founder and former CEO David Blake, who is now executive chairman of the board.
San Francisco-based Degreed is part of a group of edtech companies and non-profit organizations that are trying to amplify the skills of the U.S. workforce at a time when rapid technological change is transforming the job market. Degreed aims to facilitate and recognize educational achievements that often occur outside academic degree programs.
Degreed offers employers a gateway to continuing education for their staffers, by providing a searchable catalog of thousands of online courses, videos, professional training programs, articles, and other resources—the majority of them free to all learners. Users can also follow links on the platform to sign up for educational offerings that come with a price tag. Degreed doesn’t create its own educational content, but enables users to choose learning experiences from sources such as Coursera, Khan Academy, Udemy, Duolingo, Codecademy, YouTube, and the New York Times.
Employers can draw on these resources, as well as their own corporate training modules, to assemble learning sequences tailored to specific company goals—such as guiding workers to qualify for promotions, or helping military veterans adjust to civilian jobs, Blake (pictured) says. Degreed records the progress of employees as they complete such educational units. Staffers can also pursue paths to advancement that they create for themselves, and track their accomplishments on a personal Degreed profile. By analyzing these profiles and workers’ achievements, Degreed gives its business clients insights into the overall skills inventory of their workforce.
Degreed, founded in 2012, was serving about a hundred companies by early 2017, Blake told Xconomy at the time. Over the past six months, Degreed has added nearly 50 new business customers, including Unilever (NYSE: UN), Cisco Systems (NASDAQ: CSCO), AthenaHealth (NASDAQ: ATHN), BMO Financial Group, and Hyatt Hotels (NYSE: H), according to a company statement. The new clients have signed multi-year contracts worth $30 million, covering a million licensed users. Businesses pay $10 to $50 per employee, per year, Blake says. The rate depends on the volume of seats licensed, he says.
Degreed’s Series C funding round was co-led by Owl Ventures and Jump Capital. Joining in the round were Founders Circle Capital and previous investors GSV Acceleration Fund and Signal Peak Ventures. The new funds will not only be used to pursue increased sales of Degreed’s core learning and data analytics platform, but also to advance a new initiative.
The company is moving more deeply into the realm of educational assessment with a new product called Skill Certification—-a path to an alternative credential that attests to a learner’s level of expertise in a specific workplace role. Blake took off his CEO hat to concentrate on developing this “credtech” offering, which reflects his company’s early ambitions when the name Degreed was chosen. (Former chief operating officer Chris McCarthy stepped in as CEO.)
So far, Degreed is offering Skill Certification certificates in 1,500 categories that range widely across professional and industrial skills, from Java programming to forklift operation. The choices also include creative categories such as screenwriting and printmaking, and health-related expertise such as biomedical engineering and occupational therapy.
While Degreed recognizes traditional coursework, grades, and university degrees as it assesses candidates for its certificates, it also encourages applicants to supply other types of evidence of their knowledge and experience. That includes informal online learning, as well as a track record of applying book learning to real-world projects and job assignments.
Degreed fact-checks the information, considers reviews from the applicant’s endorsers, and submits the file for evaluation by a panel of the candidate’s peers, and then by outside experts. The end product is a certificate that ranks the applicant’s expertise on an eight-level scale, from beginner through more advanced stages culminating with the title “Master.” Successful candidates can display their Degreed certificates on their LinkedIn profiles, websites, and digital résumés.
Blake says formal coursework covers at most about 20 percent of the skills that are relevant to employers, because real proficiency on the job comes with further learning, through practical experience and by other means.
“Degreed can help companies understand data on all points on the spectrum,” Blake says.
The question, as always, about alternative credentials is: Will employers make hiring decisions based on these certificates?
Blake says that remains to be seen, as Degreed’s Skill Certification product is a recent offering. But at least one employer is trying it out as a workforce development tool.
Unilever has bought several hundred seats in Skill Certification for its employees, according to Degreed’s response to Xconomy’s questions via e-mail. Customers pay an additional, negotiated fee for the product, separate from the licensing charge for Degreed’s employee learning portal and data services. Having staffers go through the process of obtaining Degreed’s professional certificates allows businesses to assess their in-house skills, and identify any gaps that could be remedied through training or other forms of learning, Degreed says.
Outside of Degreed’s contracts with business clients, individuals can tap into the Degreed portal and find digital learning opportunities at no charge. Individuals can also apply for a Degreed Skill Certification certificate by paying a $129 fee.
Photo of David Blake courtesy of Degreed