On October 5, 2021 – online-learning platform Udemy, filed for US Initial Public Offering (IPO). The company was valued at $3.3B during a financing round in November 2020. It is expected to go public at a much higher valuation.
- Detailed instructions how to participate in Udemy (pre-IPO, offering price) see below👇
What is an IPO and how it works
IPO is a process of offering shares of a private corporation to the public in a new stock issuance. Why go public? The primary benefit of going public is easier access to capital.
To go public, a company must have a track record of growth and other favorable results and hire an investment bank to come in and underwrite the IPO (Morgan Stanley and J.P. Morgan in Udemy case). The underwriters also performed due diligence and verified financial information and business model.
Once the paperwork done, the company sells the stock to institutional investors. When the initial block of shares has been sold, the company with underwriters' help sets an initial price and date for the stock to begin trading on a stock exchange.
Company Profile and Financial Indicators before Udemy IPO
Often investors compare Udemy to Coursera. However, it was Udemy platform that became the ancestor of this line of business. Undoubtedly, there are many similarities between these companies. The main difference between them is that Udemy is more democratic. On Coursera, most of the courses were created by well-known universities. The developers of Udemy believe that everyone is capable of teaching other people something. As a result, any user can create their own course and post it on the platform.
More than 183,000 courses from 65,000 different teachers are available in 180 countries in 75 languages. More than 44 million people already use the educational platform Udemy. At the beginning of the year, the company launched a D2C (Direct-to-Consumer) subscription for individuals.
There is also a business solution, Udemy for Business (UB), which is used by 42% of Fortune 100 companies. Meanwhile, about 80% of UB's content has been updated in the last two years. The platform is on Fortune magazine's prestigious Change the world list, which lists companies that are solving humanity's unmet needs.
The company was last valued at $3.32bn, making it a unicorn. After the IPO, the valuation could exceed $4 billion. Udemy's revenue in the last 12 months was $479 million with an annual growth rate of more than 40%. Since its foundation, the platform has received $311.4m in funding from 32 investors. Among them are Learn Capital, Insight Partners and Norwest.
The Udemy project has managed to achieve significant growth by increasing interest in online education amid the global pandemic. It had more than 201 million course enrolments in 2020 alone.
Research and Markets predicts the global online education market, which had a volume of 187.9 billion in 2019, will reach $319.2 billion in 2025 at an annual growth rate of 9.23%.
Market Cap $3847.96mil
Revenues $479.17 mil (last 12 months)
Net Income $-54.55 mil (last 12 months)
How to Buy Udemy Stocks Before the IPO (Offering Price)
In the past, IPOs as highly profitable investments were available only to the privileged customers of the leading brokerage firms and it was challenging for retail investors to gain access. You couldn't buy shares paying the price set by the company and you had to wait until the shares actually start trading on the public stock market at whatever stock price supply and demand allows.
Technologies and marketplaces changed the rules of the game, now regular investors can get pre-IPO shares. To participate in Udemy IPO you need to use an IPO investing app like Freedom Finance (NASDAQ: FRHC), TD Ameritrade or Fidelity. They give its customers access to IPOs and secondary offerings through their existing brokerage account. Also you can buy Udemy shares when the company goes public via a commission-free trading app like eToro.
🚨 Detailed Instructions How to Participate in the Udemy IPO before public trading:
Below we share the instruction how to participate in the approaching Udemy IPO using Freedom Finance (Freedom24 platform). This marketplace is chosen as an example because it's been already listed there.
** Freedom Finance services are NOT available to US citizens and residents.
- Apply for a Freedom Finance account — you need to prepare your identity document and a document confirming the address of residence (utility bill). The verification process is very fast, it will take 2 minutes to create your account.
- Deposit your account — to participate in an IPO, your account must have available funds in the amount you send IPO application for.
- 💡 Tip: It's recommended to deposit your account in advance. Often the exact IPO date is undefined until the last day. You may have a short notice for participation and account deposits also takes time for processing. Also, sometimes Freedom sends last-minute IPO offer when you have 2 hours to participate.
- Submit a request to participate in the IPO — when applications are open select Udemy and click Participate in the IPO > input the amount you want to invest > Send your application. Note: Before the book closing, a request can be withdrawn. At the time of the book closing, 1 day before the start of the exchange trading, the specified amount will be blocked on the account.
- Wait for allocation — The actual number of stocks purchased during an IPO depends on supply and demand. The higher underwriter reserves the right to partial execution of collective applications. So if the demand is high you may get less than you applied for. Of course, you will only pay for the shares purchased. The rest of the funds will be returned to your account.
- Start of trading — With the beginning of the public trading on the stock exchange, the purchased shares will appear on the account and a lock-up period will start — a 93-day period of prohibition on sale. You can’t sell stocks, but you can track their current value and growth indicators in your personal member area and a trading terminal.
- Closing your trade — At the end of the 93 days lock-up period, you will be able to manage your stocks at your discretion — leave in the portfolio or sell and withdraw money or transfer the stocks to another depository/ broker in your name. This can be done in your account by clicking the ‘Sell’ button next to the name of the security. In this case, a commission of 0.5% of the amount of the sale transaction is charged.
Is investing in IPOs profitable?
Not always. The average return at the end of the lock-up period is 72%, past IPOs data.
When is the Udemy IPO date?
Udemy's IPO date is October 27, 2021.
What is Udemy IPO price range?
Udemy IPO price range is $27 and $29 per share.
The company will have 139,602,466 shares outstanding, inclusive of its underwriters’ option, when it is public.
How to Invest in Udemy after the IPO date (opening price)?
After the IPO you can buy Udemy stocks via Freedom24. Or if you're from the US use a commission-free trading app like eToro on the first trading day.
In what currency Udemy IPO and post-IPO shares will be traded?
The Udemy IPO and stock trading currency will be USD.
If you have funds in another currency the cheapest way to convert your currency is to use the mid-market rate (that’s the one you’ll find on Google) which can be done via a fintech service like Wise. Banks may add hidden markups to their exchange rates - charging you more without your knowledge. And if they have a fee, they charge you twice. Wise never hides fees in the exchange rate.
What is the Udemy (stock symbol)
The stock ticker for Udemy is UDMY
Udemy Registration Statement on Form S-1
Sources used: Reuters, TechCrunch
This page may contain affiliate links.