More Moolah for MOOCs: Coursera Raises Another $20M
After being founded just last year, online education startup Coursera turned heads this summer when it raised a $43 million Series B round.Turns out the final amount of the round was actually $63 million.
The company created by two Stanford professors told AllThingsD it had added $20 million more, with the delay from the previous close attributed to the fact that much of the money was coming from three university partners, who have long due diligence processes.
Coursera isn’t naming the three university backers, but said the round also included additional money from existing investors GSV Capital and Learn Capital.
While she also declined to disclose Coursera’s total valuation, co-CEO Daphne Koller bragged of the funding, “We didn’t sell a huge part of the company for it.”
Coursera, with 5.5 million students taking classes from 100 universities and institutions, is one of the largest companies in a crop of ed-tech startups. Learn Capital partner Rob Hutter observed that at least 60 technology startups in the education space were venture funded in 2012, coming from a drought just a couple years earlier.
But Hutter thinks there’s lots of open territory; globally the market for education is $4.6 trillion, and the total market capitalization of companies in the space is just $50 billion.
Coursera is also on top of the buzziest trend in edtech: MOOCs — or massive open online courses — which aim to democratize education by making lectures from quality professors widely available.
In some ways, Coursera is the last big MOOC standing. Udacity, which was also founded by a Stanford professor — Sebastian Thrun — has refocused on classes that help prepare people for jobs in the technology industry. And edX, the nonprofit version of Coursera that originated at Harvard and MIT, now seems somewhat more focused on open-source MOOC tools. (EdX started with $60 million from its founding universities, while Udacity has raised $20 million from venture capitalists.)
“Solving the education problem is a significant challenge and one that requires concerted effort,” Koller said of the competition. “I think we have made a big dent in the problem, and we’re on a trajectory that we consider to be promising. If Udacity [and edX] want to go in another direction, I think it’s useful that people are exploring different areas.”
Coursera now has a staff of about 70 people, and it is making some money by selling verified certificates that students can use to show they’ve completed a MOOC.
The new funding will be used to “really focus on improvements to the product to make it a much better experience for students and instructors,” Koller said.