MasterClass Raises $100M to Let You Learn From Celebrities. Results Not Guaranteed.
They say you should never meet your idols, because they’ll probably disappoint you. But what about learning from them?
That’s the premise behind MasterClass, a San Francisco-based startup that offers live and pre-recorded lessons from celebrity experts about their craft.
The company makes no guarantee that your shoddy backhand will improve after taking a course led by tennis sensation Serena Williams, or that you’ll make palatable risotto after watching Wolfgang Puck. Or that you’ll suddenly write rhymes like Usher. After all, the courses are just as much entertainment as education.
But at least one audience demographic is enthralled. This week, MasterClass raised $100 million in a Series E investment round led by Fidelity Management & Research Company. Other investors include Owl Ventures, 01 Advisors and previous backers NEA, IVP, Atomico and NextEquity.
This latest capital infusion “puts us on the IPO path,” says co-founder and CEO David Rogier. Bloomberg reported that the funding round gives the company a $800 million valuation; he claims the actual value is “way above that” but declined to disclose the actual figure.
Founded in 2015, MasterClass has stuck to its founding premise: to make Hollywood-quality courses featuring experts who are the best in their profession. Today, the company offers 85 courses spanning acting, business, cooking, filmmaking, sports and other skills. One of the most popular? The art of negotiation, taught by a former FBI hostage negotiator.
To date, MasterClass has raised $240 million in venture capital. “Every funding round, we have to prove something,” says Rogier. “This is about proving we can scale.”
Yet for all the talk about proof, Rogier offered few specifics about business milestones. He did not disclose revenues, only saying that sales in 2019 more than doubled the previous year’s. In the past couple months, revenue increased ten-fold over the same period last year, which he attributed to the pandemic keeping people at home. All of the company’s revenue comes from a $180 annual subscription that provides access to every course.
And for a company claiming to combine the best of entertainment and education, it also makes no promise that people will actually improve. Results are not guaranteed (although there is a 30-day money back guarantee if people are not satisfied).
Rogier said his team has considered adding assessments and conducting effectiveness studies, but it’s unlikely those will materialize. It’d be difficult to design objective tests for many of the skills taught on the platform, such as gardening and fashion design. The closest proxy is a survey that asks viewers how much they learned after finishing a course.
Still, that doesn’t mean that people aren’t learning, says Rogier. In terms of educational value, MasterClasses may be closer to TED Talks, which sometimes also feature big-name speakers who impart information in an engaging and entertaining manner.
The $100 million investment will support product development efforts to make MasterClass content available on new mediums. The company recently notched deals with AppleTV, Roku and other television devices. Rogier wants to push into augmented and virtual reality. “Imagine if you can take [basketball star] Steph Curry’s class in AR, and see where to position your feet,” he envisions. “Or a class in VR with [comedian] Jerry Seinfield, and learn how to read the audience in the room.”
The company also plans to grow its roster of celebrity teachers. Getting them to lend their time is no small undertaking. With prepwork, course design, scheduling and filming, “you’re talking about six months to a year” to produce a course, says Rogier. He declined to share how much each costs. Hollywood Reporter reported in 2017 that instructors get around $100,000 upfront and get a 30 percent cut of the revenue.
The company hopes to accelerate its course production, on the order of releasing a new class every week, Rogier adds. That pace will demand, among other things, more headcount, and he estimates the company will hire at least 50 new staff, pushing the team to 300 employees.
One of the courses on MasterClass features Malcolm Gladwell, who popularized the “10,000-hour rule,” the idea that that’s how much practice it takes to master a complex skill. (It’s based on the research of Anders Ericsson, a professor of psychology at Florida State University.) Gladwell’s five-hour course, spread across 23 lessons, aims to impart some of his secret sauce on writing compelling stories.
So can someone shortcut the 10,000-hour rule by watching a few MasterClasses?
“It’ll probably speed up how much you have to learn by a little bit,” says Rogier. That’s as close as he gets to making any promises.
“If you want to be a great author, or a great basketball player, you still have to write a lot, you still have to get on the court and play a lot,” he says. “You still have to do those little things.”