Ten years ago, more than 300,000 learners were taking the three free Stanford courses that kicked off the modern MOOC movement. I was one of those learners and launched Class Central as a side-project to keep track of these MOOCs.
Now, a decade later, MOOCs have reached 220 million learners, excluding China where we don’t have as reliable data, . In 2021, providers launched over 3,100 courses and 500 microcredentials.
In March, Coursera went public on the NYSE, raising $519 million. Since then, its stock price has been steadily falling even though revenue has been increasing. The company is expected to bring in more than $400 million in revenue in 2021. But it has yet to turn a profit, and it is on track to lose well over $100 million.
The IPO gave us an opportunity to learn more about the company. I read through the 240-page IPO prospectus and discovered interesting details, like the cost of acquiring TKTK company Rhyme ($10 million), Andrew Ng’s DeepLearning.AI revenue ($14.7 million) and how much Coursera paid its university partners ($281 million).
In July, edX unexpectedly got acquired by 2U for $800 million in cash and lost its non-profit status. The deal went through last month and edX CEO Anant Agarwal has transitioned to ‘Chief Open Education Officer’ at 2U.
So far none of the edX Consortium members have left, while two dozen of 2U partners have joined edX. EdX has also waived all the membership and annual fees for its members, to shore up that foundation.
We’ve already seen the first signs of integration. EdX has started promoting other 2U acquisitions through edx.org: GetSmarter Courses and Trilogy Bootcamps.
2U’s acquisition of edX hasn’t had a positive impact on the 2U stock price. It’s lower than it was before the acquisition. At the time of writing, the company is valued at about $1.6 billion.
Looking Beyond Universities
Originally, MOOC providers relied on universities to create courses. But that dependence is declining as more and more of the courses are created by companies every year. These corporate partners in course creation include tech giants Google, Microsoft, Amazon and Facebook.
Percentage of New Online Courses
Class Central analyses show that the fraction of new non-university courses created on Coursera increased from 31 percent in 2020 to 39 percent in 2021. This count excludes the Coursera Project Network courses, which are created by professionals. Taking those into account, the majority of the new courses launched on Coursera in 2021 are not from universities anymore.
A similar thing has happened at FutureLearn. In 2021, they introduced their first subscription-based ExpertTracks, and only one out of three ExpertTracks offerings are produced by universities.
In my year-end analysis last year, I talked about the Quarantine Boost experienced by online course providers, and more specifically by MOOC providers. It led me to call 2020 the “Second Year of the MOOC.”
In terms of new learners, that boost has to some extent faded. In 2021, 40 million new learners signed up for at least one MOOC, compared to 60 million in 2020.
But Coursera has done much better than its nearest MOOC competitors in maintaining the pandemic boost. It added 21 million new learners this year, which is less than the 31 million in 2020, but more than twice the 8 million it gained in 2019.
MOOCs started out with a promise of free education for everyone, everywhere. But over time, the definition of free changed—from free to-free-to-audit.
These mass online courses were born without a business model. Yet within a decade, MOOCs went from no revenue to bringing in well over a half a billion dollars annually. Fuelled by hype in their early years, an entire industry was spawned with multiple providers across the world, including a few national platforms.
I took one of the very first MOOCs, and back then the videos, assignments and certificates were all free. As MOOC providers focused on finding a business model, certificates and graded assignments moved behind paywalls. All the top MOOC providers also now also offer fee-based courses that have no free versions.
Providers also tweaked the scheduling so that courses are available throughout the year rather than having intermittent start dates, so learners can start them on demand. Scaling MOOCs required removing professors from the active role of running their courses.
This also killed one of the earliest selling points of MOOCs: the community. MOOCs are now no longer massive.
But they have found their audience (at least from a monetization perspective): Professional Learners — that is, learners taking courses for potential career benefits. To target them, providers launched 70 online degrees and some 17,000 microcredentials.
The pandemic did give MOOCs a shot in the arm. In terms of growth, it allowed them to skip forward in time, gaining in months what would have taken them a couple of years at their previous growth rate in the absence of the pandemic.
That accelerated Coursera’s plans to go public. And edX, feeling they couldn’t compete with Coursera without additional resources, decided to get acquired.
In 2021, MOOC providers are looking beyond universities to create courses. The pandemic also increased the adoption of online courses from corporations and governments around the world. This is where they are (and will be) looking for growth over the next few years.
For Coursera, “enterprise” (meaning sales of subscription services to companies who offer access as a perk to employees) is already its fastest growing segment, with 70 percent year-over-year growth, compared to 29 percent for “consumer,” meaning purchases by individual students
In 2022, we can expect the top MOOC providers to further expand their catalog through non-university partners, as well as further expanding their businesses into the lucrative enterprise segment.