Online education company Coursera raises $16 million

Goal is to bring top-tier university classes to the Web for free; online degrees becoming mainstream

Financial trends and news by Steven Loeb
April 18, 2012
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Online education is quickly becoming more and more of a mainstream option for many students who can’t afford to attend top-tier universities. Now there is a new company that might allow them to attend some of the top colleges in the country for free.

Coursera, which focuses on bringing university classes to Web users for free, raised $16 million from Kleiner Perkins Caufield & Byers (KPCB) and New Enterprise Associates (NEA), the company announced Tuesday.

John Doerr, partner at KPCB, and Scott Sandell, General Partner at NEA, have joined Coursera's Board of Directors.

Mountain View, Calif-based Coursera was founded by Stanford professors Andrew Ng and Daphne Koller. The first courses were offered in fall semester 2011. Though only two classes were available, enrollment totaled 200,000. It now has over one million enrollments.

The company says its goal is to have tens of millions of students in five years.

Coursera’s wants to expand the number of people who are able to get an education by making access easier, and cheaper.

"We see a future where world-renowned universities serve millions instead of thousands, allowing many more people to live their dreams," said Daphne Koller, in the company press release.

Coursera also announced today that it is adding new schools to their program, including Princeton University, Stanford University, the University of Michigan and the University of Pennsylvania. These universities will now be offering free web-based classes on the Coursera platform.

Recently, there have been a slew of investments into different online educators, including StraighterLine, which raised $10 million last week. Earlier this month 2tor raised $26 million, while Schoology and Piazza raised $6 million each. Memrise raised $1.05 million in February, while Schoolfeed received $1.75 million the same month. In December of last year social learning tool Edmodo raised $15 million. 

Why online education?

Online education has boomed in the past decade.

With student loan debt on the verge of being a potential national crisis, online schools are becoming more mainstream, as fewer students are able, or willing, to put themselves in debt in their early 20s.

The number of students enrolled in at least one online course rose for the nine straight years, a report from The Sloan Consortium says.

During fall 2010, over 6.1 million students took at least one online class, a 10% increase from 2009. Only a decade ago that number was only 1.6 million.

Last year, online classes accounted for only 30% of total college enrollment.

With college tuitions rising over 8% from 2010 to 2011 alone in public universities $8,244 a year, and over 4% for private universities to $42,224, it is no wonder that so many people are choosing the cheaper option of online education.

Coursera could not be reached for comment.

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