Udacity has raised $35 million to expand its online education service

As debt-ridden, unemployed college graduates look to retool their skills, investors are betting that online vocational education has a big future. One of the household names in the online education space, Udacity, just picked up $35 million in funding from Drive Capital to expand into America’s recession-racked heartland. Unlike other popular Massively Open Online Course (MOOC) providers, Udacity is partly funded and designed by leading tech companies. For instance, I’m taking a data science course at Udacity, and my “teacher” is a Facebook statistician. Most of the problem sets come out of issues that Facebook’s team deal with every day.

Udacity’s high-profile chief executive, Sebastian Thrun, is at it again. Having just raised $35 million in new venture capital, he is bristling with plans to keep expanding in online instruction, focusing mostly on ways to sharpen up technical training for big companies and their workers in fast-changing fields. In its 2 1/2 years of existence, Udacity has experimented with a variety of strategies. Initially, the Mountain View, Calif., company had big plans to disrupt traditional, university-style instruction. One of its earliest offerings was a wildly popular online course on artificial intelligence, modeled on a version of the class that Thrun taught as a professor in Stanford’s computer science department. Thrun in 2012 talked about building out a full complement of massive open online courses (or MOOCs) that could provide students anywhere in the world with low-cost academic degrees. But building up a full suite of academic courses and achieving high student completion rates proved tricky. Besides, two other startups with closer ties to academia, Coursera and EdX, emerged as the dominant new players in that sector. So Udacity more recently has gone the vocational route. It is drawing more of its instructors from industry — while creating a course catalog that’s heavy on specific technical skills such as writing Android applications or programming in Hadoop. The idea: to help people who are already working in the field win promotions or qualify for better jobs.