Seek Ltd (ASX: SEK) announced today it will make two investments in online global education businesses, FutureLearn and Coursera for a combined total of CAD$ 142 million.
The company outlaid CAD$92 million for a 50% stake in FutureLearn and CAD$50 million for a minority interest (the holding percentage not specified) in Coursera.
Overview Of Businesses
FutureLearn is a world leading online education platform with over 20 million enrolments and 9 million learners that are accessing short courses, micro-credentials and full-degrees on behalf of over 150 higher education institutions.
Coursera is the world’s largest online learning platform for higher education with 40 million learners and 1,800 businesses accessing 3,200 courses and 310 specialisations from over 150 leading universities.
Strategic Rationale
Seek said the investments in FutureLearn and Coursera are, “a continuation of SEEK’s strategy to deploy capital into market leading high growth assets across the large human capital market”.
Seek CEO Andrew Bassat said, “FutureLearn and Coursera are global leaders in online education each of which have a proven track record in educating millions of learners and partnering with world class education institutions. Both businesses are leveraged to structural trends such as migration of education online and in helping millions of people to adapt to evolving labour markets.
“The long-term opportunity is to significantly increase accessibility of ‘career ready’ education to the rapidly growing pool of learners.” The Seek CEO and Co-founder further commented, “Our new transactions share similar logic to our successful IDP and OES investments, where we are investing in disruptive models leveraged to long-term structural trends. ”
Bassat concluded by saying, “Our investment in FutureLearn provides us with a strong footprint across the UK, Australia and Europe, and Coursera provides us with exposure to the high growth North American education market.”
Funding
Seek said the investments would be funded by a mixture of cash and debt facilities with no need to raise equity.
A Good Deal?
At face value, I like it and think this investment makes sense at a strategic level. These are investments that can be integrated into its online job network and sold in a variety of different forms.
However, the value of the investments is an unknown at this point in time because we are not yet privy to the financials of the investments. It will be interesting to see their full-year report to get a better gauge on the value.
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Disclaimer: At the time of writing, Andrew does not own shares in any of the companies mentioned.
