Coursera is all set to go public: Here’s all you need to know

After a modest start to 2021, the IPO market has begun gathering steam, mostly led by the technology sector. This year, the top IPO aspirants include Coursera, Inc. The company, a provider of massive open online courses, is banking on its innovative portfolio that is best suited for the present market condition, wherein the pandemic has forced communities to shift to work-from-home and remote learning.

In IPO Mode

Coursera this week priced its initial public offering at $0.33 per share, which will value the company at $4.3 billion. It expects to raise about $519 million from the offering of 14.7 million common shares. Having obtained approval from the New York Stock Exchange, the shares are expected to start trading under the ticker symbol COUR on Wednesday. The underwriters include Morgan Stanley, Goldman Sachs, and Citigroup. As of December 2020, the company had about 115.6 million outstanding common shares.

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Established in 2012, the California-headquartered tech firm follows a growth strategy focused on continued investment in enterprise channels, ensuring stable adoption and conversion of the freemium offerings, while also adding more courses and further expanding the brand and leaner base.

Upskilling

A statement submitted by the company to the Securities and Exchange Commission earlier this week said the classroom-based learning model might not be sufficient to meet the rapidly-increasing demand for skills required to perform effectively in today’s workforce. “While serving certain learners well, the in-person experience may fail to meet the needs of learners in more remote areas and non-traditional learners who need access to education and upskilling the most, both domestically and internationally,” it stated.

The skill-development courses being offered by the company assumes significance considering the widespread job losses during the pandemic, catalyzed by the ongoing automation drive in an increasingly digital economy. Coursera operates a unique platform that connects students, academicians, and institutions across the world, supported by a network of 200 partner institutions. The offerings mainly include guided projects and fully online degrees, covering popular areas like machine learning, language learning, and cloud computing.

Tailwind

The business got a major boost after people who are out of work signed up for the learning programs offered by Coursera to re-skill themselves for pursuing new opportunities. As a result, the user base witnessed an unusually sharp growth during the pandemic.

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The Coursera platform had more than 77 million registered learners at the end of 2020, while 4,000 academic institutions and about 2,000 business clients used it for skill development. Last year, the company generated revenues of $293.5 million, representing a 59% annual growth. Meanwhile, its loss widened to $66.8 million or $1.80 per share from $46.7 million or $1.45 per share.

The Cons

The bottom-line will likely remain in the negative territory in the coming quarters, with continuing headwinds from the COVID crisis hampering the recovery process. It needs to be noted that the online learning market is still at a nascent stage, which makes it vulnerable to macroeconomic disruption.