Course Hero, a tutoring business last valued by investors at $3.6 billion, has cut 15% of staff, or 42 people – its first round of layoffs in 17 years, TechCrunch has learned from numerous sources.
A spokesperson confirmed the layoffs, saying that “the layoffs are happening as a part of a strategic effort to set Course Hero business line up for future growth.” The company says it does not anticipate future layoffs.
“Part of this transition support includes providing several months of severance, health care benefits through the end of June, outplacement and immigration support services, and we are working with individuals with special circumstances to make sure we do everything we can to ease their transition,” a spokesperson said.
The workforce reduction comes after Course Hero itself, a rare edtech unicorn, saw co-founder Andrew Grauer leave his post as chief executive four months ago. Course Hero then was put under a parent company, Learneo, which took that multi-billion dollar acquisition and named Grauer as CEO.
He was succeeded by John Peacock, who was formerly the VP of product at the company. The layoff appears to be one of the new CEO’s first significant changes to the business since taking over. Peacock sent an email to staff this week explaining the changes.
“This is the first time in Course Hero’s 17 years that we have done a layoff of this size, and it’s not a decision we made lightly,” the email, obtained by TechCrunch, reads. “It follows careful deliberation with the leadership team about the moment we’re in.” He went on to say that the layoff was done to meet the needs of the “rapidly evolving” sector and that it was “absolutely necessary” for the future of the company.
Launched in 2006, Course Hero was somewhat allergic to venture capital until recent. 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.
Then in 2021, the edtech company announced yet another tranche of capital: a $380 million Series C at a $3.6 billion valuation. It brought a 227.3% increase to Course Hero’s valuation in a little over a year. With fresh capitalization and a broader vision of its total addressable market, the company began scooping up businesses, including Scribbr and LitCharts, a Sparknotes spin off. It’s unclear how the acquisition cadence will change given today’s scale back, if at all.
The business tells TechCrunch that Course Hero and Learneo are cash flow positive and profitable on an adjusted EBITDA basis.
If you have a juicy tip or lead about happenings in the venture and startup world, you can reach Natasha Mascarenhas on Twitter @nmasc_ or on Signal at +1 925 271 0912. Anonymity requests will be respected.
Course Hero, once an edtech unicorn valued at $3.6 billion, conducts layoffs by Natasha Mascarenhas originally published on TechCrunch
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Author: Natasha Mascarenhas