As the cost of in-class education continues to rise, and the cost for computing continues to fall, we’re seeing a flourishing of startups that target the market for online learning. As one mark of the trend, one of the leaders in this space, Coursera, is today announcing $64 million in a Series D round of funding.
Coursera’s CEO Rick Levin (who notably joined the company after a period as president of one of the more prestigious institutions of the old educational guard, Yale University) told me that the company plans to use the funding to accelerate its business in three areas: to develop new technology in areas like artificial intelligence to improve and personalize the learning experience; to expand its range of full online degrees (versus short courses and one-off classes); and to continue building out one of its newer areas, targeting nonprofits and businesses and their own corporate development and training needs.
Levin told me that Coursera is not disclosing its valuation in this round, but I have confirmed with sources close to the company that it is around $800 million — a significant uptick from Coursera’s previous round, which valued it around $500 million.
Another sign of some heat in the market is the size of this round. I’ve known about it for a couple of days while planning this story, but late last night I received a hurried note telling me it actually went up as Coursera added a new investor at the last minute.
The full list of investors is an impressive one. It includes GSV Asset Management, New Enterprise Associates (NEA), Kleiner Perkins Caufield Byers (KPCB) and Learn Capital, all existing investors. The Lampert Foundation — prominent in health and education philanthropy — also participated as a new investor. It takes the total raised by Coursera to just over $210 million.
The funding comes as Coursera, founded in 2012, has clocked 26 million registered users across its different courses and other offerings: these include 2,000 courses in 180 specializations; master’s degrees in business, computing, innovation and accounting; and courses for enterprises and nonprofits. It also has 150 university partners.
The majority of that 26 million today are part of the company’s short-course efforts, but Levin said the newer programs are growing fast and the company expects these to become more substantial over time. Today there are some 50 companies offering courses through Coursera, including BCG, BNY Mellon, L’Oreal, PayPal and Air France KLM, while government and nonprofit customers come from the U.S., Pakistan, Egypt, Malaysia and Singapore.
“We are excited to see Coursera emerge as the world’s learning platform, with a highly engaged global learner base and educational content from leading universities and top companies,” said Michael Moe, founder and CEO of GSV Asset Management. “In a global marketplace and knowledge-based economy, education makes the difference not only for how well an individual does, but for companies, and for that matter, countries.”
While some have advocated throwing traditional education out the window, for those who still think there is a future in getting established qualifications, there has been a lot of debate (including some pointed, critical observations) about the prospect of moving education online, and not all efforts have been successful.
It seems to me that the most interesting, and maybe most sustainable of these efforts will be those that are not trying to replace existing educational institutions, but those that are providing a new opportunity to people who may not otherwise have the time, logistical wherewithal or money to learn something otherwise.
These include some of the interesting startups targeting young people, like China’s Yuanfudao, which just raised at a $1.1 billion valuation, and VIPKid, which last year came out of nowhere to raise $100 million, as well as Age of Learning out of the U.S., which also raised at a $1 billion valuation.
Coursera, Levin tells me, sees itself in a similar vein, rather than as an all-out disruptor: “Our average MBA student is 37, married with children and a job,” he told me, “not someone who might have matriculated at the University of Illinois for this degree otherwise.” However, Coursera is only seeing through its first cohort in its masters programs, so it will be interesting to watch how its disruptive aspects evolve.