San Mateo-based skills development provider Modal has announced it has raised $25 million in Series A funding led by Left Lane Capital and Ensemble VC.

The company focuses its employee upskilling services for data and analytics professionals. It was founded in February 2022 by Darren Shimkus and Dennis Yang, the former president and CEO of edtech company Udemy.

The pair scaled Udemy through many years of growth, leading to an IPO. The co-founders started Modal to help employers upskill employees using personalized technical and AI skills training. Modal now uses 1:1 expert coaching and job-simulated projects to improve the education and skills of employees who work with data and analytics.

Modal has introduced a pricing model based on success rather than charging for unlimited subscriptions with low utilization. With its pricing model, companies only pay for the skills employees develop, it said.

This means companies buy credits which are only used when learners graduate from the course. According to the company, learners that use its training programs are 15x more engaged than the industry average and on-the-job-projects regularly achieve course completions above 80%.

“Having been in the industry for two decades, I’ve seen how organizations spend their money offering subscriptions to all their employees, but only 2-3% of those employees would complete a course.” Said Darren Shimkus, Modal CEO.

“At Modal, we only charge companies when employees actually graduate, demonstrating their new skills. We’re not interested in making money on breakage, we want to drive results.”

The company said the success of this funding round is linked to the “unprecedented demand” for AI skills across enterprises.

According to Modal it has grown its customer base to more than 100 large enterprises, including Dentaquest and Casey’s. Modal said the fastest growing areas are generative AI training and leveraging AI to improve productivity.

The funding will be used to improve its products, expand its go-to-market capabilities and recruit more “top-tier talent.”

Signalfire and Larn Capital also participated in the funding round.

 

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