Course Hero has become the latest education startup to be valued at more than $1 billion, after securing a $10 million Series B funding round from NewView Capital.
The Redwood, California-based company was founded in 2006, and grew rapidly as it provided students with a place to share study materials. Back in 2014 Course Hero raised $15 million in a Series A round led by GSV Capital (now rebranded as Sutter Rock Capital) and IDG Ventures and has since expanded its offering to allow teachers to share educational resources, and tutoring and Q&A services.
Unlike many unicorns, Course Hero is profitable and has been since 2012, according to its CEO and founder Andrew Grauer. Last year the company surpassed $100 million in revenue, and boasts a subscriber base of around 1 million, each paying between $10 and $40 per month.
NewView Capital also put another $30 million into the company, but this was through an employee tender offer. This means the venture capital firm bought shares held by employees of the company, and the cash goes straight to the staff. Grauer said the decision to let staff cash out stock was “a step in the direction of energizing our employees to build the next three, five, 10 years.”
Course Hero joins a growing group of education startups which have gained access to the so-called unicorn club. Coursera, Duolingo, and Guild Education have all already secured a billion-dollar-plus valuation, in a sector which saw record investment last year. Coursera, a platform for online courses and credentials, raised $107 million in 2019 in a round led by SEEK Group. Guild Education, which connects employees to higher education programs, grabbed $157 million from General Catalyst, and the language learning company DuoLingo secured $30 million in December in a Series F round led by CapitalG.
EdSurge research showed that in 2019, investment in edtech companies reached $1.66 billion across 105, a five-year high. There were five fewer deals in 2019 compared to the previous year, but by value there was a 16 percent increase, holding a wider trend in the technology industry of fewer deals for larger amounts.
Course Hero, a former Red Herring Top 100 winner, will now look to expand further internationally, as it attempts to live up to its valuation. With a solid user base, sturdy foundations, and profit, the startup is already way ahead of a large number of unicorns.