Charting a new course in online education

Venture capitalists talk a lot about investing in companies that can change the world. Occasionally we find some that may actually do it.

Today Coursera announced that it has raised $16 in Series A funding to expand its online education platform. The company also announced a host of new partnerships with some of the country’s most prestigious institutions. These schools – Princeton University, Stanford University, University of Michigan and the University of Pennsylvania – will offer web-based classes on the Coursera platform for free. That’s right, free.

There is a desperate, global need for access to higher education, and I think Coursera will be at the center of an incredibly important transformation in this space. I have long been interested in the potential for technology to have a profound impact on education. In nearly two decades of looking, this is the first company I’ve wanted to back.

Coursera aims to bring the world’s best teachers and classes to tens of millions of students around the world. The company was founded by two Stanford computer science professors, Daphne Koller and Andrew Ng, and repeat NEA entrepreneur Dan Avida. On a single website, students will be able to access video lectures, interactive quizzes and assignments, online forums and other tools from a range of leading universities. I don’t think it’s exaggerating to say that this can truly transform education on a global scale, especially given the passion for education that Daphne and Andrew bring to this initiative.

The potential for both students and professors is enormous—the technology is not only disruptive, it’s enabling. And I’m a firm believer that the market speaks through a megaphone… and simply through word-of-mouth, Coursera signed up more than 100,000 students. With a response like that, there’s no question that this is something very special.

After hearing me wax poetic about this company without a word about revenue, a friend recently asked why Coursera is a good investment. It’s a fair question. The paths to monetization are certainly nascent. But I’m not too concerned about that at this stage. I believe the opportunity is enormous, and if they focus on the quality of the product and gaining traction with universities and students, the rest will take care of itself. The founders have built a technology platform that truly facilitates online education at scale – which has long been a hurdle, especially for professors. The value proposition for participating universities is clear – they can increase visibility, expand their programs, and derive meaningful analytics from a very large pool of participants. The company has an early lead and significant traction in a wide open field—that kind of leverage will create opportunity.

As much as we like to do good, as venture capitalists we also have an obligation to our investors to do well. We think Coursera’s on the right track to do both.