• Brett Schafer

Deep Dive: Coursera

Listen On:

  1. Spotify

  2. Apple Podcasts

  3. What do they do? Coursera is a service that connects educators and learners on an online platform. They serve individuals, students, governments, and businesses.

  4. History? The platform launched in 2012 and was found by two Stanford professors, Andrew Ng and Daphne Coller.

  5. Industry? Education and training is a multi-trillion dollar industry. Coursera has many different competitors including Pluralsight, 2U, and even the universities themselves.

  6. Management? Current CEO is Jeff Maggiocalda. He has been CEO since 2017 (the founders are currently not on the management team). He was previously the CEO of Financial Engines, a public company.

  7. Valuation? (As of recording) P/S of 21, P/GP of 40, unprofitable

  8. Earnings? Sales growth of 59% in 2020, 53% gross margins, cash flow negative.

  9. Balance Sheet? Raised $500 million from IPO and had a pretty clean balance sheet going in.

  10. Potential Competitive Advantages? We had scale, online marketplace dynamics, and any proprietary relationships they get with educators. Overall we struggled to identify any true competitive advantages.

  11. Potential Future Growth Opportunities? Exclusive content, the enterprise segment, and getting more university partners were opportunities we identified.

  12. Highlights? Coursera is where the puck is headed, large industry, they have the right partners to make this successful.

  13. Lowlights? Not a differentiated solution (yet), a lot of unknowns in the industry, and they almost assuredly got an unsustainable COVID-19 tailwind.

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Disclosure: The authors and podcast guests are not financial advisors. Brett Schafer and Ryan Henderson are portfolio managers at Arch Capital. Clients of Arch Capital may hold securities discussed on this podcast.

#COUR #Coursera

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