Featured Article

For Course Hero, venture capital was once an unobvious solution

The edtech company just landed a $380M Series C at $3.6B valuation

Comment

Illustration of four people finishing a puzzle to represent assembling and retaining an inclusive workforce.
Image Credits: Malte Mueller (opens in a new window) / Getty Images

Launched in 2006, education startup Course Hero started its life away from the attention of venture capital. After launching, the company waited eight years to raise a $15 million Series A. Then, after going another nearly six years without raising venture capital, Course Hero closed two financings in 2020.

Yesterday, the edtech company announced yet another tranche of capital: a $380 million Series C at a $3.6 billion valuation. The financing, led by Wellington Management with participation from new investors Sequoia Capital Global Equities, OMERS Growth Equity and D1 Capital Partners, as well as existing investors, brings a 227.3% increase to Course Hero’s valuation in a little over a year. The business has been cash flow positive and profitable on an adjusted EBITDA basis for over five years, it claims.

The raise comes as a stark contrast to CEO and co-founder Andrew Grauer’s comments in 2020, when he spoke on the “risk and reward of raising capital.”

“If you raise too much money early on, you can get misaligned expectations based on different time horizons set up by different terms of incoming shareholders or investors,” he said. Course Hero’s rapid capitalization today thus suggests that Grauer now thinks that the startup has graduated past a point of dealing with unfavorable incentives from its investors.

And to be fair, his new vision for the company makes a good argument for why he needs so much capital in this given moment.

Image Credits: Course Hero

The founder believes that Course Hero has evolved past its main business model — a place where students can come to access more than 80 million course-specific study resources and guides — into a platform play. Going forward, Course Hero will formalize its mass consolidation mindset, as we’ve seen through its acquisitions of Symbolab, LitCharts, CliffsNotes and QuillBot, as a business strategy.

“We’re working to build a platform that serves the entire learning journey, almost like a productivity suite for learning,” he said. “Each business will continue to build their products and brands, and there’s an opportunity for us to build an ecosystem to integrate the products into each other that create more value for learners and educators.” PR-speak aside, the capital will be used to fuel acquisitions. And we know edtech is full of them.

Grauer estimates that he can grow Course Hero from gaining 2 million subscribers per year to 50 million subscribers per year by 2030 by serving more than just as a “study platform for students and a resource for educators.” Going forward, students will be able to go to coursehero.com like they traditionally have, but also navigate to its broader product and brand suite.

“The last two years we have seen a bigger shift in advancing pedagogy online and the way that we evaluate and assess student comprehension is evolving as a result,” he told TechCrunch. “All of these changes require better, more affordable and effective resources, tools and services to meet the needs of today’s students and educators.”

The co-founder explained that he plans to use the new capital to acquire businesses operating in new verticals, subject areas, grade levels and countries. “This definitely includes a focus on technical topics and skills as well as tool-driven product solutions,” he added. And clearly, there’s still solid room to grow.

Grauer said that Course Hero hasn’t yet begun to “fully dive into crypto and web3,” a movement that could definitely use some translation help to the legions of people who haven’t fallen down the rabbit hole just yet. As the company’s total addressable market becomes broader, and hopefully more diverse, Course Hero will need to evolve to support a whole range of learning needs — not just requests for 24/7 homework help or study guides on the latest lit assignment.

More TechCrunch

Andreessen Horowitz’s American Dynamism fund has established a new fellowship program aimed at introducing top engineers and technologists to venture investing, a move that could help the firm less obvious…

a16z’s American Dynamism team launches program to introduce technical minds to VC

Another fintech startup, and its customers, has been gravely impacted by the implosion of banking-as-a-service startup Synapse. Copper Banking, a digital banking service aimed at teens, notified its customers on…

Teen fintech Copper had to emergency discontinue its banking, debit products

Autodesk — the 3D tools behemoth — has acquired Wonder Dynamics, a startup that lets creators quickly and easily make complex characters and visual effects using AI-powered image analysis. The…

Autodesk acquires AI-powered VFX startup Wonder Dynamics

Farcaster, a blockchain-based social protocol founded by two Coinbase alumni, announced on Tuesday that it closed a $150 million fundraise. Led by Paradigm, the platform also raised money from a16z…

Farcaster, a crypto-based social network, raised $150M with just 80K daily users

Microsoft announced on Tuesday during its annual Build conference that it’s bringing “Windows Volumetric Apps” to Meta Quest headsets. The partnership will allow Microsoft to bring Windows 365 and local…

Microsoft’s new ‘Volumetric Apps’ for Quest headsets extend Windows apps into the 3D space

The spam reached Bluesky by first crossing over two other decentralized networks: Mastodon and Nostr.

The ‘vote Trump’ spam that hit Bluesky in May came from decentralized rival Nostr

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220M seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal action against the U.S. government, that means shaping up its…

As a US ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

8 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI