Platzi Raises $6 Million to Bring More Online Education to Latin America
Before they founded a company together, Freddy Vega and Christian Van Der Henst were rivals.
They had two different companies that provided services to Flash programmers until a combination of the programming language’s decline in popularity with the global recession killed business in the early 2010s. The two men joined together for a new company focused on an underserved market in tech training: Latin America.
Founded in 2013, their company, Platzi, offers Spanish- and Portugese-language live-streamed classes for courses that include programming, marketing, design and business. Today, the company has raised $6 million in a Series A round led by venture capital firm Foundation Capital.
The platform has served one million students to date, and the company claims course completion rates hover between 50 and 70 percent. The company also boasts a sizable headcount of 117 full-time employees.
The company offers subscription plans for $29 a month or $299 a year, with company discounts based on volume. It has over 300 courses and produces 30 new courses or course updates a month, accepting payment from 20 different currencies.
Platzi has raised $8.3 million to date. The new funding round will go toward more classes on the platform, including more in Portuguese so that Platzi can grow in Brazil. Spain is another market Platzi has targeted for growth, Vega says.
Foundation Partner Rodolfo Gonzalez says Platzi caught his firm’s attention when it became one of the first Latin America-focused graduates of the Y Combinator accelerator (Vega is from Colombia and his co-founder, Van Der Henst, is from Guatemala).
Gonzalez’s firm last invested in student services provider Chegg, but hadn’t found another education company that piqued his interest until his firm started talks with Platzi.
For Gonzalez, who is from Mexico, the company has a chance at becoming the name brand for Spanish-speaking workers looking to train themselves for more technical and higher paying work.
“Anything that can prepare them for the digital economy, that is the best investment they can make,” Gonzalez says.
An Accenture report estimates that between 75 and 81 percent of workers in Colombia, Mexico, Brazil, Argentina and Chile hold low- or medium-skilled jobs and thus are vulnerable to automation and displacement by technology. For the U.S. and European Union, by comparison, that applies to about 60 percent of each area’s workforce.
Vega believes his company can help these workers develop skills that will get them hired as Latin America adds more high-skilled labor and appeal to U.S. companies in search of employees in the region.
“Right now Latin America is super hot and the need for talent is amazing,” says Vega, 33. “We’re training the next generation.”
A McKinsey report states that 40 to 50 percent of Latin American employers say most entry-level job vacancies are due to candidates’ lack of skills.
Vega credits part of the company’s success with building a community among its students. Students answer each other’s questions on the platform and attend in-person events hosted by Platzi in places like Mexico City and Madrid. The company also refreshes courses and gets rid of ones that are older than eight months to ensure that the content is relevant and up to date for students.
Vega wants to add to the number of large-scale clients and partners—a list that includes IBM, Colombia and Facebook—that use Platzi’s platform to train Spanish-speakers. For now, he estimates that corporate training comprises 20 percent of the business, with the rest driven by aspiring programmers and other students. He’d like corporate clients to make up half of revenues in the near future.
Vega has big plans for his company, aspiring to become the largest online teacher for Latin America. But he tries to be realistic about his impact.
“A lot of companies talk about changing the world,” he says. “We’re not going to be able to change the world, but we may be able to change the economy of a region.”