In 2021, two of the largest MOOC providers had an “exit” event. Coursera went public, while public company 2U acquired edX for $800 million and lost its nonprofit status.
Ten years ago, more than 300,000 learners were taking the three free Stanford courses that launched the modern MOOC movement. I was one of those learners and launched Class Central as a side project to keep track of these massive online courses.
Now, a decade later, MOOCs have reached 220 million learners, except for China where we don’t have reliable data. In 2021, providers launched more than 3,100 courses and 500 smaller accreditations.
In March, Coursera went public on the New York Stock Exchange, raising $519 million. Since then, its share price has steadily fallen despite increasing revenue. The company is expected to generate more than $400 million in revenue in 2021. But it hasn’t turned a profit yet, and is on track to lose more than $100 million.
The IPO gave us an opportunity to learn more about the company. I read the 240-page IPO prospectus and discovered interesting details, such as the acquisition cost of TKTK Rhyme ($10 million), Andrew Ng’s DeepLearning.AI revenue ($14.7 million) and the amount Coursera paid its undergraduate partners ($281 million).
In July, 2U unexpectedly acquired edX for $800 million in cash and lost its nonprofit status. The deal took place last month and edX CEO Anant Agarwal moved to 2U’s “Chief Open Education Officer”.
My opinion, is that this acquisition weakens edX, as it takes away its biggest (or perhaps only) advantage over Coursera—an ideological one in this regard: its nonprofit status.
So far, no members of the edX consortium have left, while more than two dozen 2U partners have joined edX. EdX has also waived all membership fees and annual fees for its members to support that institution.
We have already seen the first signs of integration. EdX has begun promoting 2U’s other acquisitions through edx.org: GetSmarter Courses and Trilogy Bootcamps.
2U’s acquisition of edX did not have a positive impact on 2U’s share price. It is lower than it was before the acquisition. At the time of writing, the company is valued at around $1.6 billion.
Looking beyond universities
Originally, MOOC providers relied on universities to create the courses. But this accreditation is declining as more and more courses are created by companies each year. The co-creators of the course include tech giants Google, Microsoft, Amazon, and Facebook.
Percentage of new online courses
Class Central analysis shows that the proportion of new non-college courses created on Coursera increased from 31 percent in 2020 to 39 percent in 2021. This number excludes Coursera Project Network courses, which were created by professionals. With that in mind, the majority of new courses launched on Coursera in 2021 are no longer from universities.
Something similar happened at FutureLearn. In 2021 they introduced the first subscription-based ExpertTracks, and only one of three ExpertTracks offerings are produced by universities.
In my analysis for the end of last year, I talked about Quarantine Boost being tested by online course providers, and more specifically by MOOC providers. This led me to call 2020 “Year Two of the MOOC”.
In terms of new learners, this reinforcement has faded somewhat. In 2021, 40 million new learners signed up for at least one MOOC, compared to 60 million in 2020.
But Coursera has fared much better than its closest competitor on MOOC in keeping the epidemic going. It added 21 million new learners this year, down from 31 million in 2020, but added more than double the 8 million it gained in 2019.
MOOCs started with a promise to provide free education to everyone, everywhere. But over time, the definition of “free” has changed – from “free” to “free” to free “checkout”.
These group online courses were born without a business model. However, within a decade, mega online courses went from having no revenue to generating more than half a billion dollars annually. Driven by hype in their early years, an entire industry sprang up with several providers around the world, including a few national platforms.
I took one of the first MOOCs, and at the time the videos, assignments, and testimonials were all free. As MOOC providers focused on finding a business model, certifications and classified duties moved beyond paywalls. All major MOOC providers now also offer fee-based courses that do not have free versions.
Providers have also adjusted the schedule so that courses are available year-round rather than having intermittent start dates, so learners can start on demand. Scaling MOOCs requires removing professors from the active role of managing their courses.
This also killed one of MOOCs’ first selling points: the community. MOOCs are now no longer huge.
But they have found their audience (at least from a monetization perspective): professional learners – learners who take courses for potential career advantages. To target them, providers have launched 70 online certifications and about 17,000 smaller accreditations.
The pandemic has given massive online courses (MOOCs) an injection in the arm. In terms of growth, it has allowed them to leap forward in time, gaining in months what would have taken them two years at their previous rate of growth in the absence of the pandemic.
This hastened Coursera’s plans to bring it to the public. And edX, which felt it could not compete with Coursera without additional resources, decided to acquire it.
In 2021, MOOC providers are looking beyond universities to create courses. The pandemic has also led to increased adoption of online courses from businesses and governments around the world. This is where they are (and will be) looking to grow over the next few years.
For Coursera, “enterprise” (meaning sales of subscription services to companies offering access as a benefit to employees) is already the fastest growing segment, with 70 percent year-over-year growth, compared to 29 percent for “consumer,” which means purchases by students. singles
We will continue to track the growth of MOOC in Class Central, including looking into details on how Coursera, edX, FutureLearn, Udacity, and other major providers are performing.
In 2022, we can expect major MOOC providers to expand their catalog through non-university partners, as well as expand their business into the lucrative enterprise sector.