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Business Operations Business Models

How Does Khan Academy Make Money (Business and Revenue Model)

The Khan Academy business model

Khan Academy logo
Here’s what you should know:
  • What is Khan Academy, and how does Khan Academy work?
  • How does Khan Academy make money?
  • Contributions and Grants
  • Tuition Fees from the Khan Lab Schools (Program service revenue)
  • Khan Academy subsidiaries, acquisitions, and exits
  • Khan Academy profit and revenue
  • What is the Khan Academy business and revenue model?
  • Khan Academy funding, net worth, and valuation

How does Khan Academy make money and how is it free to use? Well, here is a full, in depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Khan Academy business and revenue model, how much Khan Academy makes per year, and how Khan Academy works.

What is Khan Academy, and how does Khan Academy work?

Khan Academy is a 501(c)(3) nonprofit organization that provides free online education that is available in 42+ languages.

Founded in 2008 by Salman Khan, Khan Academy now has more than 48 million registered users across 190 countries.

So, how does Khan Academy work? To use Khan Academy, first start by either visiting their website or downloading their mobile app on the Apple App Store or Google Play store.

Once there, you can choose from subjects and courses you’re interested in learning, click on lessons, take practice tests, and more – all for free.

Some of Khan Academy’s competitors include Coursera, Udemy, and other online education that offers free courses.

Khan Academy App in Apple App Store | Khan Academy Business Model | How Does Khan Academy Make Money? | How Does Khan Academy Work?
Source: Apple App Store | Khan Academy

How does Khan Academy make money?

According to Khan Academy and reports, Khan Academy has more than 48 million registered users on its educational platform.

So how does Khan Academy make money off of all these registered users if it’s free to use?

Below is a breakdown of how much money Khan Academy makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Khan Academy makes money in 2022

Khan Academy has a revenue model that makes money in two (2) ways; from contributions and grants and tuition fees from the Khan Lab School.

#1. Contributions and Grants

Because the Khan Academy is legally a 501c3 nonprofit organization, they make most of their money through the contributions and grants (donations) they receive from users, supporters, and more.

Some of the many organizations and individuals who donated $1+ million to the Khan Academy include the likes of Google, Bill and Melinda Gates, Jack Dorsey, and the Elon Musk Foundation.

According to their tax returns, the Khan Academy recieved $65.7 million in contributions and grants in 2020. (the latest released)

Khan Academy donate | Khan Academy Business Model | How Does Khan Academy Make Money? | How Does Khan Academy Work?
Source: Khan Academy

Note: The Khan Academy is legally registered as a 501c3 nonprofit.

#2. Tuition Fees from the Khan Lab Schools (Program service revenue)

The Khan Academy also has a physical school, called Khan Lab School, from which they make money from the tuition it costs to attend.

They have two (2) locations, both of which are located in California. One in Palo Alto, and the other in Mountain View. Each school has a maximum of 230 students with tuition that ranges from $29k to $33k depending on the grade plus a non-refundable annual fee of $750. You can see the tuition costs below.

How much does the Khan Lab School tuition cost? (Khan Academy pricing)

  • Lower School: $29,950
  • Middle School: $32,600
  • High School: $33,600

Note: In 2020, the tuition revenue from Khan Lab Schools brought in roughly $12.6 million USD. It is labeled as “Program service revenue” on their tax returns.

Khan Academy subsidiaries, acquisitions, and exits

To date, the Khan Academy has made a total of 1 acquisition.

Mergers and acquisitions business model
Source: Crunchbase | Khan Academy

Khan Academy profit and revenue

Khan Academy’s last reported earnings came in 2020 when they brought in $79.3 million in revenue. Since then, the Khan Academy has not released any official reports in regards to company earnings.

Note: Because the Khan Academy is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Khan Academy business and revenue model?

Khan Academy makes money through a few revenue models that they combine within their company, they are:

  • Pay what you want (PWYW) business model
  • Donation based business model
  • Transaction based business model
  • B2B2C (partnerships) business model
  • Mergers and acquisitions (M&A) business model

Khan Academy funding, net worth, and valuation

According to Khan Academy’s Crunchbase profile, the Khan Academy has raised $16.2 million over 5 rounds.