How does Coursera make money?

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The online learning company makes most of its revenue from consumers but enterprise is growing fast

The pandemic was a boon for online learning: in the fall of 2020, around 75%, or 11.8 million, undergraduate students were enrolled in at least one distance education course, and 44%, or 7 million, of all undergraduate students exclusively took distance education courses. Not only that, but the number of undergraduate students enrolled in at least one distance education course was 97 percent higher in 2020 than it had been in the fall of 2019, while the number of undergraduate students exclusively enrolled in distance education courses was 186 percent higher.

One of the companies that benefited from this was Coursera. Founded in 2012, the company, which offers individuals access to online courses and degrees from top universities, saw its revenue grow 59% in 2020 to $293 million, up from $184.4 million.

“We believe that education is the source of human progress. In today’s economy in which the skills needed to succeed are rapidly evolving, education is becoming more important than ever. As automation and digital disruption are poised to replace unprecedented numbers of jobs worldwide, giving workers the opportunity to upskill and reskill will be crucial to raising global living standards and increasing social equity. Online education will play a critical role, enabling anyone, anywhere, to gain the valuable skills they need to earn a living in an increasingly digital economy,” the company wrote in its S-1 filing with the SEC. 

“We have built a global platform connecting learners, educators, and institutions, providing world-class educational content that is affordable, accessible, and relevant. We partner with over 200 leading educational institutions and industry partners to bring quality higher education to a broad range of individuals, academic institutions, organizations, and governments.”

The company breaks its revenue down into three arms, the largest of these being its consumer segment, which targets individual learners seeking to obtain hands-on learning, gain job skills, receive professional-level certifications, and increase their knowledge to advance their careers.

“Coursera’s Consumer offerings target individuals seeking to obtain hands-on learning, gain valuable job skills, receive professional-level certifications, and otherwise increase their knowledge and advance their careers. We built our broader business model from our original Consumer offering. Our large learner base attracts top educator partners, allows us to source Enterprise and Degrees leads, provides data and insights, increases operating scale, improves search engine optimization performance, and produces favorable economics,” the company wrote.

Consumers often begin to engage with the platform via its freemium offering by taking one of over 4,500 courses for free; paying customers can get access to graded assignments and assessments and can receive a certificate of completion after finishing a course. They can pay either one time for a single Course or Project or on a subscription basis for multi-course offerings. For example, a Guided Project costs $10 on a one-time basis, while Specializations, which are a series of related courses offered by the same educator partner where learners are provided access to these courses on a month-to-month subscription basis, costs between $39 and $99 per month. Coursera Plus, the company’s consumer subscription offering, costs $399 a year.

In its most recent quarterly earnings, Consumer revenue was $69.7 million, up 12% year-to-year, and accounting for 56% of Coursera’s total earnings for the quarter. The company added 5 million new registered learners during the quarter for a total of 107 million.

The second largest source of revenue is Coursera’s Enterprise segment, in which it sells subscription licenses to business, government, and university customers who provide users the ability to enroll in courses and Specializations and receive certifications upon completion.

Enterprise revenue comes from three main offerings: Coursera for Business, which helps employers upskill and reskill their teams; Coursera for Campus, which allows academic institutions to offer job-relevant online education to students, faculty, and staff; and Coursera for Government, which helps federal, state, and local governments and organizations deliver workforce reskilling programs.

Enterprise revenue for the second quarter was $43.7 million, up 55% from the year before, and representing 35% of total revenue.The total number of Paid Enterprise Customers increased to 958, up 64%.

Finally, the company makes money from its Degrees segment, in which it partners with universities worldwide to develop and deliver fully online bachelor’s and master’s degrees to a global learner audience.

“After a Degrees program is live on our platform, universities admit students and pay us a percentage fee based on the online student tuition in a given period. Our Degrees partner contracts generally have initial terms between two to ten years in length. We continue to offer all of the degrees we have launched since inception,” the company wrote.

Degrees revenue for the second quarter was $11.4 million, down 4%, and totaling 9% of reveue. The total number of Degrees Students reached 17,460, up 19% year-to-year.

Coursera went public in May of 2021, closing up 36% in its market debut, giving the company a market cap of $5.9 billion. It raised $520 billion in its offering. The company is now trading at $11.57 a share, down 65% from its $33 IPO price.



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