Udacity, one of the companies that kickstarted the current MOOC revolution has announced that it has closed a financing round of $35 million. This brings the total amount raised by Udacity to $58 million. The lead investor for this round is Drive Capital, whose founder Mark D. Kvamme will join Udacity’s board.

According to Udacity COO Vish Makhijani, this investment will be used to double down on Nanodegrees. In June 2014, Udacity announced Nanodegrees as ‘a new type of credential for a modern workforce’. AT&T paid Udacity $3 million to develop the existing nanodegrees

• Front-End Web Developer (in pilot)
• Back-End Web Developer
• iOS Developer
• Data Analyst

Sebastian Thrun, the founder and CEO of Udacity believes that they have hit upon the right business model. As he said in the WSJ:

When we started out it wasn’t clear that there would be a sustainable business model, but I believe we’ve nailed it. Since March, paying students have been increasing by 2% day over day.   

Each Nanodegree cost $200 a month and take around six to twelve months to complete. The challenge for Udacity now is to make the nanodegrees credible enough so that they are truly meaningful indicators that employers will trust.