Coursera did well on its first day as a public company. The nine-year-old Mountain View, Calif.-based online education provider debuted with a stock price of $33. At the end of the day, its shares were trading at $45 and they continue to rise today. When it last raised money in July 2020, the company was valued at $2.6 billion according to Pitchbook. He is now worth nearly $7 billion.
“It’s a step forward on a long journey,” CEO Jeff Maggioncalda said of the IPO, in a Zoom interview yesterday afternoon. Dressed in a white button-up shirt and gray blazer, backed by a virtual backdrop of a paneled wall displaying the Coursera logo, he was enjoying a rare day at the office. For most of the pandemic, he has worked from his home in Santa Cruz, near the city’s seaside lighthouse. “We’re nine and we have a lot more than nine left,” he said. declared.
Stanford computer science professors Daphne Koller and Andrew Ng founded Coursera in 2012 as a platform to deliver massive open online courses, called MOOCs. Their vision: to give students around the world free access to college courses taught by professors from the best universities. At first, Coursera didn’t charge students anything, and they got no academic credit. Princeton, Penn and Michigan have signed.
A huge hype ensued, with opinion leaders like the New York Times‘ Thomas Friedman writing of Coursera and fellow MOOC providers Udacity and edEx, “Nothing has more potential to unlock a billion extra brains to solve the world’s problems.”
The narrative quickly shifted to “the death of the MOOC,” after data from two studies from the University of Pennsylvania showed that 80% of people who signed up for free MOOCs already had degrees and only the half of them had bothered to watch a single lecture. A miniscule 4% have completed their courses.
Coursera’s business has since taken a turn to focus on paid courses. In 2017, 51-year-old Maggioncalda took the top job and led the company down a new path. Founder and former CEO of financial planning website Financial Engines, he had never worked for an education company before joining Coursera. Under his leadership, Coursera’s consumer business, which sells online courses from 150 institutions to any student willing to pay, generates the largest share of its revenue. According to his SEC Filingsthis segment generated $193 million of its $294 million in revenue in 2020.
His most popular set of courses is called “Python specialization for alltaught by Charles Russell Severance, a professor at the University of Michigan. Learners pay a monthly subscription of $49 to take four pre-recorded lessons, which consist of video lectures and a series of assignments. Most students complete the sequence in four months, Maggioncalda said. Overall, the completion rate for Coursera’s paid offerings is 50% to 60%.
According to ed tech investor Daniel Pianko, co-founder of University enterprises, Coursera’s story shines a light on the success of the online short course. “Everything the revolutionaries said about MOOCs was wrong,” he says. “What saved Coursera was the short course that teaches people how to use data and do analytics, for $49 a month.”
Coursera also has a fast-growing business that grossed $71 million last year. It offers courses to help employees hone their skills at companies like Novartis and Adobe.
Its smallest business is full-degree programs, which accounted for $30 million in revenue in 2020. It offers two online bachelor’s degrees, from University of North Texas (for $14,000) and University of London (price ranging from $14,000 to $21,000). Coursera also offers graduate programs, mostly in technical subjects, at schools like University of Illinois at Urbana-Champagne and University of Colorado Boulder.
Coursera skeptics like John Katzman, founder and CEO of New York-based online curriculum manager Noodle Partners, say Coursera charges schools a lot to deliver their courses on its platform and provides few marketing services. . “It’s not going to end well for Coursera,” he said. “People like me will attack the degree-free space and make it much less expensive for students to take big school programs.” Katzman says he recently struck a deal with Howard University to design and host its online MBA.
But investors like Pianko see a bright future for Coursera as a public company. “This is probably the most stable and secure ed tech IPO, planned or recent,” he says.
Education technology investor Deborah Quazzo, managing partner of GSV Ventures, agrees. When the pandemic ends and many students return to face-to-face classes, she predicts Coursera’s business will remain strong. “The move to online classes was well underway before Covid,” she says.
Coursera has the advantage of working with the most reputable brands in higher education, including Stanford, where founders Koller and Ng are still professors. Ng Deep Learning Certificate Sequence remains one of Coursera’s most popular.
Coursera is not profitable. It lost $66.8 million in 2020 according to its SEC filings, down from $46.7 million in 2019. But revenue was up 59% in 2020 from 2019 and its workforce grew by 300. employees to reach a total workforce of over 850. And it continues to expand overseas. Its 77 million learners come from 190 countries.
In October 2018, Forbes included Coursera on magazine’s list of Next Billion-Dollar startups. By the following April, investors had pegged its valuation at over $1 billion.
Maggioncalda says the pandemic has helped employers see it’s possible for people to learn skills online and work remotely: “I’m very excited about equalizing learning opportunities and employment opportunities that will arise in the future. »