AlleyWatch caught up with Noodle CEO John Katzman to learn more about the evolution of online higher learning, the company’s strategic plans, latest round of funding, which brings the total funding raised to $125M, and much, much more.
Who were your investors and how much did you raise?
We raised $50 million in Series C funding. BlackRock led the round, joined by several existing investors including Owl Ventures.
Tell us about the product or service that Noodle offers.
Noodle uses online learning to lower the cost of higher education by convening a network of universities, corporations, providers, and students. For the past five years, we’ve been laser-focused on building degree programs with top universities.
Now that we have over 70 incredibly high-quality online degrees and certificate programs that attract thousands of learners, we are launching a lifelong learning platform this coming January. Users will receive free guidance and support as they choose from our library of university courses or find the right undergraduate or graduate school program.
What inspired the start of Noodle?
We launched Noodle to help universities lower the cost of excellent higher education and that continues to be our mission. Although many of us have worked in online education before, we’ve learned a lot over these past six years, and still think we can do that.
How is Noodle different?
Noodle is more transparent, flexible, innovative, and cost-efficient than any company working with colleges and universities. We’ve worked hard to align our interests with those of our partner schools; this has been both tougher and more important than you would think.
What market does Noodle target and how big is it?
We target universities of every shape and size, public and private. The process of identifying and building a portfolio of programs in a university is hyper idiosyncratic. Our research team is great at finding opportunities and untapped pockets of demand.
For our new lifelong learning platform, we’re going direct to students, and today’s online learner has no real demographic bounds. It’s a huge market.
What’s your business model?
We receive fees for the services we provide universities: market research, marketing, recruitment, learning design, technology, student and faculty support, and clinical placement services. The specific blend of those services depends on our partners’ needs and internal strengths.
What are your post-COVID office plans?
We see no reason to force our New York area employees to come into the office, but believe there’s an energy and joy in being together frequently, so we are exploring moving our offices and offering incentives to employees to come in regularly.
What was the funding process like?
Necessary, if uncomfortable. Great investors force you to explore vulnerabilities and opportunities and help you see your company from a new perspective.
What are the biggest challenges that you faced while raising capital?
During COVID, we couldn’t meet with prospective investors face to face, which makes it hard to read their concerns so you can address them.
What factors about your business led your investors to write the check?
Fast growth (we continue to double every year), a strong management team, and a large TAM.
What are the milestones you plan to achieve in the next six months?
Have over one hundred degree programs from top universities under management, and launch our lifelong learning platform.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Don’t handle your raise haphazardly. Research the VC community to find 30-40 firms that might be a good fit (interested in your sector, not invested in a competitor, and early in their fund), and set up a process with enough time. Be really thoughtful about creating an FAQ, adding to it every time you hear a new question; it’s an internal tool to make sure the team has thought through the question and is aligned.
Where do you see the company going now over the near term?
We will try to stay focused on building out and scaling online and hybrid programs for our university partners while successfully launching our course platform. And we’ll try to do all that without burning out our excellent team.
What’s your favorite outdoor dining restaurant in NYC
All of them. The COVID huts are the best addition to NYC since Citibike, and I can’t wait to see them made permanent.