In a major development in the edtech world, online education platform Coursera on Wednesday announced its decision to buy out its rival Udemy in an all-stock deal. The landmark deal values the new combined company at $2.5 billion, as the industry consolidates itself after a post-pandemic slowdown in course enrollment rates.
As per a Reuters report explaining the framework of the deal, Udemy shareholders are set to receive 0.8 shares of Coursera for each previous share of Udemy held by them. The announcement was welcomed by investors as Coursera shares rose around 6% in premarket trading. Whereas Udemy stock jumped nearly 18%, reflecting optimism around scale and strategic clarity.
Despite the small boost, both companies continue to trade well below their post-IPO highs, underlining broader investor caution towards the online education space.
Unification of two of the largest US edtech firms
The deal unites two of the largest U.S.-based online learning platforms at a time when global course enrollment growth has cooled from pandemic highs, prompting companies to seek alternate scaling strategies and pursue enterprise/corporate clients over volatile individual users
Through this deal, Coursera and Udemy are betting that a combined platform will be better positioned to capture corporate demand for workforce training across the disciplines of artificial intelligence, data science and software development.
Their bet is positioned in the backdrop of a surging interest in employers to invest in reskilling workers amid rapid advances in generative AI.
Timeline of the deal
Based on Coursera’s last close, the offer values Udemy at $6.35 per share, implying a premium of about 18.3%. The companies said the deal is expected to close in the second-half of next year, subject to regulatory and shareholder approvals.
Coursera,an online learning destination which partners with universities and institutions to offer degree programs and professional certificates, has increasingly focused on enterprise customers. Udemy, by contrast, runs a marketplace-driven model that allows independent instructors to sell courses directly to individuals as well as through business subscriptions.
Despite companies pitching AI as the next major growth lever for the sector, investor sentiment remains cautious. Shares of online education companies have underperformed broader equity markets, weighed down by concerns around intense competition and pricing pressures.