Coursera: Why It’s One Of The World’s Top Startups

Advertisement

Coursera, which operates a top educational platform, is now ranked No. 4 on CNBC’s Disruptor 50 list, which tracks “private companies whose breakthroughs are influencing business and market competition at an accelerated pace.” You can’t invest in Coursera right now, but this may change within the next few years.

Source: Shutterstock

It does look like Coursera could be a good candidate for an initial public offering.

Coursera is the inspiration or professors Daphne Koller and Andrew Ng, who founded the company in 2012. They got the idea for the venture because of the success with posting videos of their own courses. They thought: Why not do this on a much bigger scale?

The founder went on to build a massive open online course system (MOOC) that was freely available. Given the founders’ deep academic backgrounds, they were able to get videos of courses from top universities like Princeton.

From the start, Coursera was quite popular and attracted large numbers of users. But there was a problem: there was no business model. So, Coursera eventually started to charge students to get certificates.

The company then hired a new CEO with a strong business background, Jeff Maggioncalda. Before this, he was the founding CEO of Financial Engines, which he took public (the company went private in 2018 in a $3 billion deal).

How Coursera Works

Coursera not only has thousands of courses from top universities – Stanford, University of Pennsylvania, Imperial College of London and Duke University – but also from large companies, such as IBM (NYSE:IBM) and Alphabet (NASDAQ:GOOGL,NASDAQ:GOOG). The provides much diversity to the curriculum.

Keep in mind that many of the courses are still free, which also include homework exercises and discussion boards. But there are many premium options. For example, Coursera provides more than 20 online master’s and bachelor’s degree programs, whose fees range from $15,000 to $25,000 (financial aid is available).

There is also a thriving corporate training segment. Coursera has more than 2,400 clients that include biggies like Procter & Gamble (NYSE:PG), Tata Communications and Novartis (NYSE:NVS).

Why Invest in Coursera?

The latest round of funding for Coursera came in April 2019, when the company raised $103 million at a valuation of over $1 billion. The lead investor was SEEK Group and included Future Fund and NEA. In all, the company has raised $356.1 million.

In terms of the market opportunity, it is certainly large. According to research from GSV Advisors, higher education institutions represented about $1.5 trillion in revenues in 2015. The study also showed that the growth rate was about 5% per year.

No doubt, the novel coronavirus is also having an impact on the market. Because of the shutdowns of schools, millions of students have transitioned to online learning.

As for Coursera, it has actually set up a program, called the Workforce Recovery Initiative, that provides free courses to those who have been laid off. This is not only an admirable move but will also have a long-term positive impact on growth, as many more people will see the value of online education. The program has over 3,800 courses that are focused on helping people with their career paths.

Again, as for when you can invest in Coursera, this may be awhile. Even though the IPO market is coming back, companies are not necessarily rushing to do offerings. Let’s face it, there remains much uncertainty right now. But in the meantime, for those investors looking for an interesting play on online education – on a global basis – then it is definitely worth keeping an eye on Coursera.

Tom Taulli (@ttaulli) is an advisor and author of various books and online courses about technology, including Artificial Intelligence Basics, The Robotic Process Automation Handbook and Learn Python Super Fast. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.

Tom Taulli is the author of various books. They include Artificial Intelligence Basics and the Robotic Process Automation Handbook. His upcoming book is called Generative AI: How ChatGPT and other AI Tools Will Revolutionize Business.


Article printed from InvestorPlace Media, https://investorplace.com/2020/07/coursera-why-its-one-of-the-worlds-top-startups/.

©2024 InvestorPlace Media, LLC