Coursera’s IPO Filing Shows Growing Revenue and Loss During a Pandemic

This afternoon, Coursera filed its S-1 paperwork, providing a first take a look at how the Mountain View, Calif.-based on-line schooling supplier is faring because it prepares to go public. And the numbers reveal each rising progress and losses throughout a yr of nice disruption to varsities and companies impacted by the pandemic.

Coursera reported $293.5 million in income in 2020, marking a 59 p.c improve from the earlier yr. That comes from over 77 million registered learners, together with greater than 2,000 companies (together with 25 p.c of Fortune 500 firms) and 100 authorities businesses that paid for its enterprise choices. More than half (51 p.c) of its income got here from outdoors the U.S.

Also driving that progress is Coursera for Campus, which the corporate launched in late 2019 to let faculties provide its library of on-line programs to their college students. Shortly after the outbreak, Coursera made this obtainable without spending a dime to higher-ed establishments till Sept. 30, 2020. More than 4,000 from throughout the globe signed up, “making it one of our fastest growing offerings,” in keeping with the submitting. By yr’s finish, over 130 faculties and universities had been paying for it.

In latest years, Coursera, higher identified for its programs and certificates, has been increasing into new territory: providing totally on-line bachelor’s and grasp’s levels that vary in price from $9,000 to $45,000. There at the moment are greater than 11,000 college students enrolled in 26 diploma applications. As this quantity grows, it should put the corporate on a path to compete with different “online program management” (OPM) suppliers, together with the likes of 2U, a publicly traded firm, and Noodle Partners.

One key benefit that Coursera might have is its sizable consumer base of 77 million learners, says Sean Gallagher, founder and govt director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy. “Even if they convert a small percentage into a paid certificate or degree, Coursera has changed the economics of customer acquisition because of their incredible reach,” he says.

Coursera reported that roughly half of its new diploma college students in 2020 had been beforehand registered Coursera learners, and that its common pupil acquisition price was underneath $2,000, which is decrease than the business customary, in keeping with Gallagher.

Despite recording a income bounce in 2020, Coursera posted a web lack of $66.8 million, up 43 p.c from the earlier yr.

“We have experienced a significant increase in our operating costs associated with our services, primarily driven by our freemium offerings and marketing efforts” in the course of the pandemic, the submitting acknowledged. It additionally warned that there isn’t a assure that its progress fee will proceed after the well being disaster is over.

Like all S-1 filings, Coursera’s lists many danger elements that would adversely affect its enterprise. One that’s uncommon focuses on the “unflattering light” solid by the media and authorities investigations on for-profit faculties and on-line faculty operators. Last yr, Washington legislators publicly inquired in regards to the enterprise practices of the OPM suppliers, for example.

“Even though we do not market our solutions to these institutions, this negative media attention may nevertheless add to the skepticism about online higher education generally, including our solutions,” the submitting acknowledged. It added: “If these few situations, or any additional misconduct, cause all online learning programs to be viewed by the public or policymakers unfavorably, we may find it difficult to enter into or renew agreements with our partners or attract additional learners for our partners’ programs.”

Coursera was integrated in 2012 however received its begin a yr earlier, when Andrew Ng, then a pc science professor at Stanford University, launched a free machine studying class on-line. That attracted many college students, and led him and a Stanford colleague, Daphne Koller, to start out the corporate. Both have since left Coursera, which is now led by CEO Jeff Maggioncalda.

They had been following within the footsteps of different Stanford professors, Peter Norvig and Sebastian Thrun, who had a comparable expertise with a viral on-line course that led them to start out a web-based studying firm referred to as Udacity. The two firms could be joined by edX, a nonprofit competitor from MIT and Harvard. The near-simultaneous emergence of those three led The New York Times to name 2012 “The Year of the MOOCs,” brief for enormous open on-line programs.

In phrases of sheer numbers, Coursera has raced forward of the pack. EdX presently serves 500,000 college students, in keeping with its web site, whereas Udacity has pivoted away from faculties to deal with providing applications developed in partnership with know-how firms.

To date, Coursera has raised $464 million in enterprise capital, the latest chunk of which got here by way of a $130 million Series F spherical final July. Its greatest institutional shareholders are New Enterprise Associates (which owns 18.3 p.c of firm inventory), G Squared (15.9 p.c) and Kleiner Perkins (9.2 p.c).

According to the submitting, Coursera is seeking to elevate as much as $100 million by means of its IPO. The firm plans to record on the New York Stock Exchange underneath the image “COUR.”

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