The company, which has 17 million learners and content partnerships with 15 universities in India, is expected to overtake the United States and Europe.
It has 20 million learners in America and 19 million in Europe.
“India has 850 million young people, which represents a lot of human capital. I think McKinsey suggested that 20% of the global workforce is going to be in India. So, we are really thinking long-term and focusing on where the human capital is,” Maggioncalda said during an in-person interaction.
The comments have come at a time when global inflationary pressures, geopolitical stress and concerns over high interest rates have affected public markets, leading to a rout in global technology stocks.
In India, all major edtech firms including Byju’s, Unacademy and Vedantu have announced cash conservation measures and
fired employees, as investors and startups prepare for a “funding winter”.
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“There’s a lot of momentum in this economy (India), across all dimensions. India still is feeling far more vibrant than North America, and North America is feeling brighter than Europe,” Maggioncalda said on the economic downturn. “But Europe – that’s a tough spot.”
However, he said, as investors slow down on writing bigger cheques, the Indian edtech sector continues to be a big opportunity for mergers and acquisitions (M&As).
“Today, to the extent that there’s a lot of money that’s gone into edtech (in India), and maybe those business models aren’t playing out quite the right way. M&A might be one form of liquidity for investors that might be a path that’s more important in India. Also, there isn’t a very attractive or open public market and private money is now thinning down,” Maggioncalda, who became CEO of Coursera in 2017 and took the company public in March 2021, added.
Maggioncalda was the founding CEO of US-based investment advisory firm Financial Engines before he took up the top job at Coursera.
On Coursera’s acquisition roadmap, Maggioncalda said: “We are cash flow positive, and have $750 million of cash on the balance sheet with no debt. We have public currency as well. We believe that integration of other assets onto our platform can certainly create more value because of the distribution. We haven’t really pulled the trigger on anything big, but I think there is a ripening market for M&A.”
Coursera reported $124.8 million in total revenue for the second quarter ending June 30, up 22% from $102.1 million a year ago.
Gross profit stood at $78.4 million during the period, up 29% from $60.9 million last year.
Offline strategy
Maggioncalda said Coursera did not have any plan at present to enter the offline space, even as the company looks to focus on its strength in partnering with universities for content and with corporates to upskill their workforce.
“In India, our focus right now is creating relationships on the supply side and creating distribution so that we can be in a place to serve,” he said.
Several Indian edtech firms including Byju’s, Unacademy, PhysicsWallah and Vedantu have invested substantially in growing their offline brick-and-mortar footprint, either through acquisitions or by opening new centres.
“We are resisting from making investments in physical assets or going offline. Also, we are not going to enter into people-based teaching. There are just too many teachers in the world for us to think that our teachers are going to be better than others. We’re really good at technology and distribution and will continue to be a platform model,” Maggioncalda said.
In India, Coursera has partnerships with top universities to deliver their courses online.
These include BITS Pilani, IIM-Ahmedabad, IIT-Bombay, IIT-Roorkee, IIT-Guwahati, IIM-Calcutta, to name a few. It partners with 150-180 Indian corporations to upskill employees.
The edtech firm saw almost 1.9 million new course enrolments in India during the June quarter. The number for the first half stood at 4 million enrolments.
Indian edtech has been on the receiving end of the global slowdown, even as they struggle to conserve cash, while reporting heavy losses. Edtech leaders such as Vedantu and Byju’s are now trying to make a beeline to the public markets.
“Any company that is not generating cash – they need to be thinking about where they’re going to get their next cash flow. So, watch your cash and be ready to be financially independent at any time. The IPO market is more discriminating than the private markets for sure. Don’t think that the public markets can bail you out if you’re having trouble in the private markets,” Maggioncalda said.
