On Wednesday, CampusLogic, a provider of financial aid software to colleges and universities, raised $120 million. With that investment came bragging rights to the biggest funding round for a U.S. education technology company in 2020.
But its time on the throne proved to be short-lived.
To close out the week, another higher-education company secured a nine-figure fundraise. Coursera, which provides online courses to higher-ed institutions, businesses and government agencies, has raised $130 million in a Series F round led by NEA. Previous investors Kleiner Perkins, SEEK Group, Learn Capital, SuRo Capital Corp, and G Squared also participated.
This latest deal gives the Mountain View, Calif.-based company an estimated $2.5 billion valuation. To date, Coursera has raised $464 million, according to CEO Jeff Maggioncalda.
In an interview with EdSurge, Maggioncalda said the fundraising process started in May, a couple months after it made its library of online courses available for free, through September 30, to any higher-ed institution closed by the pandemic. Dubbed “Coursera for Campus,” this offering includes about 4,000 courses created by 150 colleges and universities. (A license normally costs $250 to $400 per student per year.)
Coursera for Campus launched last October. In February, there were about 30 customers. Since the free offer was announced on March 12, more than 10,000 institutions have signed up, according to Maggioncalda. Overall enrollments have spiked 500 percent over the previous spring, with 1.3 million students taking courses through Cousera for Campus as a replacement for in-person classes.
That kind of momentum appealed to investors, “who are very interested any time a major change happens that creates threats and opportunities.” This Series F round gives the company a cash balance of more than $300 million, which it will use to hire upwards of 100 new staff to support its product, engineering and sales efforts. Coursera currently has around 600 employees.
The company also aims to expand its Workforce Recovery Initiative, an effort similar to its Coursera for Campus offering, but tailored for government agencies. It offers access to Coursera’s online library to workforce development agencies that want to reskill recently unemployed workers. The company grants agencies 50,000 free licenses to disburse at their own choosing, and has reached users across 25 states and 40 countries.
Founded in 2012 by two Stanford University professors, Coursera was one of a trio of startups that spearheaded the hype around massive open online courses, or MOOCs, for short. One of the others, Udacity, has pivoted toward working with employers to design courses around skills they want to hire for.
The other, the nonprofit edX, offers competing services as Coursera, including courses and credentials from leading universities. It also offered its catalog of courses for free to help institutions impacted by the pandemic, which more than 45,000 students across nearly 400 schools have taken advantage of.
No matter how colleges and universities plan to reopen in the fall, “the reality is that online learning will be one of the best ways to mitigate the risk and uncertainty of campus logistics,” says Maggioncalda.
On Coursera, institutions can also create their own courses and materials. Most mix and match; they will use courses developed by another institution, but design their own assessments tailored to an instructor’s course.
“We are seeing an openness to collaboration in online learning that we haven’t seen before,” says Maggioncalda. He says higher-ed institutions are less likely to consider their courses as proprietary materials, and more like textbooks in the sense that “it’s a good way to share knowledge and enhance one’s reputation” across the higher-ed community.
And, like textbooks, there are financial incentives at play as well. Coursera offers colleges and universities a channel to sell courses to individual users and companies. Through Coursera on Campus, they can also license their materials to other institutions that are not a part of the program.
“Many of our partners are seeing a 40 to 50 percent increase in revenue from having their courses on our platform from Q1 to Q2” of 2020, Maggioncalda claims.
The company is also preparing for an initial public offering, although at the moment there is as much uncertainty about the future of the public markets as there are about schools’ fall reopening plans.