United States securities and exchange commission logo
February 3, 2021
Jeffrey N. Maggioncalda
Chief Executive Officer
Coursera, Inc.
381 E. Evelyn Ave.
Mountain View, CA 94041
Re: Coursera, Inc.
Draft Registration
Statement on Form S-1
Submitted January
7, 2021
CIK No. 0001651562
Dear Mr. Maggioncalda:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form S-1 Submitted January 7, 2021
Prospectus Summary, page 1
1. Please define your
reference to "organizations" and clarify whether these are customers in
the Enterprise segment.
We note your disclosure elsewhere that the increase in usage was
due partly to an
increase in the number of large Enterprise customers. To the extent
material, please
quantify the number of large Enterprise customers for each period
presented.
2. Please define
learners and registered learners and provide more details as to how
you
determine whether these
learners are active or have recently been engaged with your
platform. Disclose the
percentage of the registered learners who are paying customers.
Jeffrey N. Maggioncalda
FirstName LastNameJeffrey N. Maggioncalda
Coursera, Inc.
Comapany3,NameCoursera,
February 2021 Inc.
February
Page 2 3, 2021 Page 2
FirstName LastName
Risk Factors
Our amended and restated charter that will be in effect upon the closing of
this offering will
designate the Court of Chancery , page 53
3. Please expand your risk factor to address that Section 22 of the
Securities Act
provides concurrent jurisdiction for Securities Act claims to both
state and federal courts.
Since your exclusive forum provision provides for federal courts to
have exclusive
jurisdiction over Securities Act claims, please briefly discuss the
uncertainty as to whether
this provision is enforceable and the investors cannot waive
compliance with the federal
securities laws and the rules and regulations thereunder.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Our Business Model
Enterprise, page 67
4. We note on page 23 that you may offer Enterprise customer
subscriptions with more
favorable pricing terms in exchange for larger total contract values
or longer contract
terms. We also note on page F-12 that Degrees revenue is dependent on
the number of
learners enrolled and the tuition charged by the university partners.
Please expand
MD&A to discuss any trends in your Enterprise subscriptions, such as
changes in average
number of seats per subscription or price per seat for these
subscriptions or tell us why
you believe such information is not important for an understanding of
your business
trends.
Our Attractive Cohort Characteristics, page 69
5. Please provide a Y-axis description with measurements for your
Enterprise ARR by
Enterprise Cohort graph on page 70.
Comparison of the Years Ended December 31, 2019 and 2020, page 77
6. We note on page 74 that you do not incur content costs for Degrees
revenue but that you
incur content costs for Consumer and Enterprise revenues. Please
disclose and discuss
content costs for Consumer and Enterprise revenues, as content costs
as a percentage of
revenues differ for the Consumer and Enterprise revenues.
Business
Our Solution: A Platform for Delivering World-Class Learning at Scale, page 92
7. Please provide more detail regarding your University Partners and
clarify the size and
scope of the course offerings they offer in your Consumer and
Enterprise
segments. Please clarify whether they comprise of a material amount of
revenue for each
of these segments compared to the Industry Partners. Further, please
clarify whether any
University or Industry Partner generates a material amount of your
online course offering
revenue, or if you have a concentration of revenue in any particular
types of courses.
Jeffrey N. Maggioncalda
FirstName LastNameJeffrey N. Maggioncalda
Coursera, Inc.
Comapany3,NameCoursera,
February 2021 Inc.
February
Page 3 3, 2021 Page 3
FirstName LastName
8. In light of the large number of new University Partners that offered
online courses through
your platform during the pandemic, often for free, please clarify any
trends as to whether
these new partnerships have generated significant revenues or trends
related to converting
new free users into paid users. Further, please clarify whether you
have experience
significant turnover among your University and Industry Partners in
recent periods.
Management, page 111
9. We note that your current certificate of incorporation provides
separate class voting rights
for your preferred stockholders and your common stockholders. It
appears that the
preferred stockholders have the right to elect 2 directors; common
stockholders have the
right to elect 1 director; and preferred stockholders, voting on an
as-converted basis, and
common stockholders elect the remaining directors voting as a single
class. Please clarify
how the composition of your current board was elected, including which
directors were
chosen by the preferred stockholder and the common stockholder
separate class votes.
Further, please advise us whether any Series F-1 Preferred Stock was
issued, which do not
appear to have board voting rights.
10. Please provide more detail about the business and operations of
Deeplearning AI Corp.
and its affiliates. We note that Deeplearning is an Industry Partner
and owned by
Chairman Andrew Ng. Please clarify if there any material conflicts
with its business
model with those of Coursera, including Deeplearning affiliates such
as Worksera.
Consider adding a risk factor that discusses these conflicts and
others such as
identification of business opportunities by your directors that are
affiliated with venture
capital or private equity fund groups given your growth strategy
includes acquisitions.
Executive Compensation, page 121
11. With respect to your description of the Equity Awards Acceleration
Terms for Messrs.
Maggioncalda and Hahn, please clarify the requirements needed for the
100% double-
trigger acceleration to occur. In particular, please clarify whether
in addition to a change
in control, the executive officers must be terminated without cause.
Certain Relationships and Related Party Transactions, page 137
12. It appears the registration rights pursuant to the Amended and
Restated Investors Rights
Agreement survives the IPO. Please file the Amended and Restated
Investors Rights
Agreement as an exhibit or advise us why it is not material under Item
601(b) of
Regulation S-K.
13. Your consulting agreement with Mr. Andrew W. Ng provides for a yearly
$1 payment,
along with continued scheduled vesting under the Stock Restriction
Agreement. Please
briefly describe the material terms of the Stock Restriction Agreement
as it pertains to Mr.
Ng and quantify the number and value of the equity awards that have
vested since January
1, 2018 under your consulting agreement.
Jeffrey N. Maggioncalda
Coursera, Inc.
February 3, 2021
Page 4
Principal and Selling Stockholders, page 141
14. Please disclose the natural person(s) that hold investment and/or
voting power over the
shares beneficially owned by G Squared and its affiliated funds.
Description of Capital Stock, page 143
15. Please briefly describe the requirements of the semi-annual report
that assesses your
public benefit performance, such as described in Section 366(b) of the
Delaware General
Corporation Law ("DGCL") and Article 11.2 of your bylaws in Exhibit
3.4. Further,
please clarify that your corporate governance documents do not require
a periodic third-
party certification described in Section 366(c)(3) of the DGCL.
16. You reference that stockholders of a Delaware public benefit
corporation may file a
derivative lawsuit to enforce the public benefit provisions of your
certificate if they
collectively own at least 2% of your outstanding shares. However, we
note that for shares
listed on a national securities exchange, Section 367 of the DGCL
allows such derivative
suits to be brought by stockholders who own the lesser of (i) 2% of
its total outstanding
shares, or (ii) ownership of shares with a market value of $2 million
or more on the date
the action is instituted. Please revise where appropriate. If true,
please also clarify that
such derivate actions under Section 367 of the DGCL would be subject
to your exclusive
forum provision requiring derivative lawsuits to be heard in the
Delaware Chancery Court.
Financial Statements
Note 8. Redeemable Convertible Preferred Stock, page F-22
17. Disclose the conversion price and resulting conversion ratio
applicable to each series of
convertible preferred stock as of the most recent balance sheet date.
With respect to each
series, please explain to us your consideration of whether the
preferred stock was issued
with a beneficial conversion feature.
Note 9. Stockholders' Deficit, page F-24
18. Disclose the amount of the charge incurred upon the renegotiation of
the terms of the
common stock warrants and resolution of the dispute in December 2020,
and advise us of
the details of your accounting for it.
19. We note on page F-26 that you recognized stock-based compensation
expense of $6.2
million in connection with a tender offer. Please disclose the fair
value of your common
FirstName LastNameJeffrey N. Maggioncalda
stock in June 2019 to support the amount of expense recorded. Also
disclose and explain
Comapany
to usNameCoursera, Inc.
the facts and circumstances of this transaction including any
relationships with the
purchaser.
February 3, 2021 Page 4
FirstName LastName
Jeffrey N. Maggioncalda
FirstName LastNameJeffrey N. Maggioncalda
Coursera, Inc.
Comapany3,NameCoursera,
February 2021 Inc.
February
Page 5 3, 2021 Page 5
FirstName LastName
20. Regarding the private tender offer, explain to us why the purchaser
was willing to pay a
price in excess of fair value. Tell us if the purchaser had reasonable
knowledge of the
relevant facts concerning the Company's operations and financial
condition.
21. Please provide us with a breakdown of the details of all stock-based
compensation awards
granted during 2020 and through the current date, including the fair
value of the
underlying stock used to value such awards. To the extent there were
any significant
fluctuations in the fair values, please describe for us the factors
that contributed to such
fluctuations, including any intervening events within the company or
changes in your
valuation assumptions or methodology.
Recent Sales of Unregistered Securities, page II-3
22. Please briefly describe the intellectual property that was assigned to
Coursera in exchange
for issuance of 1,346,610 shares of common stock to four individuals.
Also, please clarify
if any of these individuals are related parties or selling
stockholders.
General
23. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to
do so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Claire DeLabar, Staff Accountant, at (202) 551-3349 or
Robert
Littlepage, Accounting Branch Chief, at (202) 551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact Edwin
Kim, Staff
Attorney, at (202) 551-3297 or Jan Woo, Legal Branch Chief, at (202) 551-3453
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Davina K. Kaile, Esq.