Andrew Grauer got the idea for his first business back in 2006, when he was a sophomore majoring in Spanish at Cornell University and tore his lateral meniscus. Navigating the hilly and icy Ithaca, N.Y., campus on crutches was difficult. From his dorm room, Grauer started building Course Hero, an online library of class notes, essays and exam answers, mostly crowdsourced from other students.
“The lucky—and most important—thing that we got right was we focused on a real pain point,’’ says Grauer, 36. “Whether it was awkwardly raising my hand in class or walking to the library and through the stacks, there’s just a lot of inefficient, awkward, stressful moments.” Easier, sometimes, to stay in your room and get answers online. Senior Cornell computer science major Gregor Carrigan signed on as a cofounder, as did Grauer’s twin brother, then at Princeton, and his older brother, a Cornell Law student. Carrigan is still CTO, while Grauer’s twin went on to become a chemist and his older brother to practice law.
Through 2013 (the year Grauer landed on the Forbes 30 under 30 list), the team got by with about $2.5 million in angel and seed financing, including a chunk from Grauer’s father, Fred, a prominent angel investor and index fund pioneer, who still sits on his son’s board. In 2014, Redwood, Cal.-based Course Hero raised $15 million, at a $120 million valuation, to keep growing its core business, which by that point included tutoring and individual questions answered.
Then Grauer made what looks to be another lucky choice: he rode the Covid-19 wave of venture capital washing over edtech. Course Hero raised $80 million in the summer of 2020, hitting unicorn status, and another $395 million in late 2021—at a hefty $3.6 billion valuation (making Grauer’s estimated 20-25% stake worth as much as $900 million, at least temporarily, on paper).
“The lucky—and most important—thing that we got right was we focused on a real pain point,’’ says Grauer, 36. “Whether it was awkwardly raising my hand in class or walking to the library and through the stacks, there’s just a lot of inefficient, awkward, stressful moments.” Easier, sometimes, to stay in your room and get answers online. Senior Cornell computer science major Gregor Carrigan signed on as a cofounder, as did Grauer’s twin brother, then at Princeton, and his older brother, a Cornell Law student. Carrigan is still CTO, while Grauer’s twin went on to become a chemist and his older brother to practice law.
Through 2013 (the year Grauer landed on the Forbes 30 under 30 list), the team got by with about $2.5 million in angel and seed financing, including a chunk from Grauer’s father, Fred, a prominent angel investor and index fund pioneer, who still sits on his son’s board. In 2014, Redwood, Cal.-based Course Hero raised $15 million, at a $120 million valuation, to keep growing its core business, which by that point included tutoring and individual questions answered.
Then Grauer made what looks to be another lucky choice: he rode the Covid-19 wave of venture capital washing over edtech. Course Hero raised $80 million in the summer of 2020, hitting unicorn status, and another $395 million in late 2021—at a hefty $3.6 billion valuation (making Grauer’s estimated 20-25% stake worth as much as $900 million, at least temporarily, on paper).
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TechTranscript
00:00 Course Hero was co-founded by Andrew Brower, his two brothers, and a classmate of his at Cornell,
00:06 Frederick Kerrigan, in 2006 and started and still is really this online library, a collection of
00:14 class notes, essays, exams for students, uploaded by students.
00:20 Before Course Hero, I spent hours looking for help online when I was stuck on homework or
00:27 studying for tests. Ever since a friend told me about Course Hero, it's the only tool I use for
00:32 every course. I just drop in whatever I'm working on. We started Course Hero about 17 years ago in
00:38 2006 and the whole idea was born out of helping students study and helping students who are
00:47 studying for a test, prepping and working on an assignment and feeling stressed, feeling anxious,
00:52 and it was something that I had empathy for being a student myself. I experienced it and so
00:59 really when we built it, the idea was how can we best build something that would help students
01:06 study and the lucky and most important thing that we got right was that we started, we just did it,
01:14 and we kept building. In the beginning of Course Hero, we focused on crowdsourcing resources,
01:23 study materials, test prep materials, materials helping people with homework from students and
01:30 educators across different campuses and the idea was can we connect people to knowledge that came
01:37 from other people versus having to go to people to get to the knowledge and the visual in our
01:44 heads was to build a Wikipedia-like product that instead of organized around an encyclopedic
01:51 taxonomy, we would build a product that was organized around a course-specific, school-specific
01:56 taxonomy. Course Hero is a Forbes 30 under 30 company and you know with all of those companies
02:02 we like to stay in touch and we were seeing the acquisitions Course Hero was making in recent years
02:09 and then how they created their new parent company, Learneo, in late 2022 and so really jumped on that
02:17 news and became more interested in his strategy, his acquisitions, and just how they're pivoting.
02:23 Course Hero began acquiring companies in 2020 with his first acquisition of Simba Lab and since it
02:30 has acquired seven businesses and it really was a combination of things that led them to
02:35 this strategy of acquisitions. You know first gap-based increased competition in the ed tech
02:42 space. Another factor was a surge in venture capital during the pandemic. Course Hero raised
02:49 nearly 500 million total by the end of 2021 and so that capital is really used for their acquisitions.
02:57 Another factor were college enrollment decreasing. It led the company to look for ways to diversify
03:05 and so that was through acquisitions of companies like CloBot and Simba Lab focused on professionals
03:12 and so the company now rebranded under Learneo is focused on adhering to both students and
03:21 professionals. You know how do you take that core clientele and carry it on through the work world.
03:27 Building Learneo and acquiring different businesses that are founder-led with really
03:33 entrepreneurial builder teams is incredibly important. At Learneo the idea of building a
03:40 platform of businesses and founders each continuing to be led by their CEOs is a belief that
03:48 decentralization and delegation of autonomy is incredibly powerful and each of us each of the
03:55 CEOs are able to focus on building for a closely clustered set of customer needs. They can go
04:01 incredibly deep and they don't have to worry about another teammate or potential future teammate
04:07 being able to take on an incredible new opportunity and that's the opportunity to be able to balance
04:13 going super deep and also broadening and going after new opportunities. It takes an incredible
04:20 amount of time and energy passion to be able to start something, work on it, build it over time,
04:28 get product market fit, get to expansion phase and for us that is something we want to
04:34 really facilitate and continue post-acquisition. For us creating an environment that empowers
04:44 autonomy and responsibility, entrepreneurialism just like when we're startups individually
04:51 is incredibly powerful and that's core to how we want to build Learneo as a platform of businesses
04:57 that are powered by founders, builders and entrepreneurial talent. Rohan Gupta is a
05:04 co-founder of Qwilbot which is essentially an AI powered writing and paraphrasing tool for both
05:11 students and professionals. It was founded in 2017 and acquired by Learneo in late 2021.
05:17 My co-founder and I were studying at the University of Illinois, Urbana-Champaign. We both were in
05:24 love with artificial intelligence and we were just tinkering with the technology, made a breakthrough
05:30 in technology to rewrite sentences. Thought it was pretty interesting, just put it up on Reddit
05:38 and it started going viral and that's how we founded Qwilbot. Back when we started in 2017
05:44 there was not a lot of support for building AI tools especially compared to what it's like to
05:50 build on top of AI today. And yeah back then we were just the three of us were tinkering in an
05:57 apartment on campus. We had next to no funding, we just had a small grant from the university
06:02 so we had to be very scrappy and it was just a green field and every day was a new experiment.
06:08 I met Andrew in the winter of 2020. It was really exciting. I was a user for Course Hero for
06:16 several years and so it was nice just meeting him as a fan and then as a fellow entrepreneur
06:23 understanding his experiences and getting advice from him. It completely changed our trajectory.
06:29 I mean one thing is just having access to so many brilliant founders and CEOs to share best
06:35 practices with and learnings from. It's also been a privilege to be able to partner with some of the
06:42 best writing businesses in the sector and collaborate with them on new product development.
06:47 And finally we just have access to way more resources than we would have otherwise. Every
06:54 single business has a unique culture and a unique way of operating and it's you can think of it as
07:01 many different experiments being run at the same time. So seeing what works for another business
07:08 and how I can apply it to my own has been invaluable especially because everyone within
07:14 Learneo is so transparent about what's working well and what's not. Some of the challenges in
07:19 the evolution of building up Learneo from one business to a platform of now eight companies
07:26 have to do with how can we make sure that we stay true to our operating principles of empowerment
07:35 and responsibility. We think there's a huge value in being a decentralized platform and creating
07:41 autonomy for the different businesses and as you scale from not just running one business with
07:47 multiple product lines to two to four to eight being able to create an operating model that is
07:53 effective at each of those stages is an incredible challenge and also something really fun to solve.
08:00 The pandemic saw an increase of venture capital specifically in the ad tech space and so now
08:06 companies are kind of dealing with the decrease in that. From 2021 to 2022 it nearly halved it went
08:13 from 20.8 billion to 10.6 billion and so companies are dealing with less venture capital out there
08:19 right now. College enrollment has decreased the last three years as students and Gen Z particularly
08:26 are rethinking the value of a college degree and that means you know declined customers for
08:33 ed tech companies like Learneo and so companies like Learneo are asking themselves how do you
08:39 diversify in this space and so they're focused more on professionals as well as students and
08:44 so Learneo's acquisitions of Clobot, Symbol Lab you know indicate that trend of professionals
08:52 using ed tech tools like these. With artificial intelligence tools like OpenAI's ChatGBT and
08:59 Google's BARD popping up it's really created just a lot of competition for these education
09:05 technology companies like Horse Hero and Ched. I think with so many students and professionals
09:12 looking for resources for maybe school reports or business reports they're looking for more of
09:19 a free option that maybe ChatGBT can provide rather than a subscription service like Ched
09:26 or Horse Hero. Ched was kind of an extreme example there where they had said ChatGBT affected sign
09:34 ups it ended up vomiting stock and really just with these tools it's creating a lot of competition
09:41 for you know customers both professionals and students looking for tools like this.
09:47 Artificial intelligence is an incredible theme and opportunity and disruption in the world today
09:54 and at Learneo we're incredibly excited about how these technologies and transformer-based
10:01 technologies large language models are impacting language, summarization, translation, question
10:08 generation, question answering and I'm not sure I've ever seen a time in our history of building
10:16 where there's so much opportunity and a huge amount of energy being developed to act fast
10:24 and with conviction and to iterate on a huge technological change.
10:30 [Music]