FutureLearn Burns Through SEEK Funding, Requires Extra £15M To Survive
In the face of “plausible downside,” FutureLearn negotiates £15M in additional funding from investors.
On July 26, 2022, the UK-based online course provider FutureLearn filed their annual report for the prior financial year, from August 2020 to July 2021.
In the report, we learned that FutureLearn doesn’t have enough funding to survive 2022:
“Following a review of cashflow forecasts, including plausible downside sensitivities, the group does not currently have sufficient funding in place for its requirements for 12 months from the date of signing the financial statements of the Group for the year ended 31 July 2021.”
FutureLearn was originally wholly owned by Open University (OU), which was the subject of one of Class Central’s previous features. FutureLearn, whose offerings we discuss at length here, represents the flagship venture of the OU, alongside its other platform, OpenLearn, which we also recently wrote about.
In 2019, SEEK Group invested £50 million in Futurelearn, becoming joint owners with the Open University. Since the investment, FutureLearn’s losses doubled and revenue didn’t grow in line with investment.
| Revenue | Losses | Learners | |
| 2021 | £11.3M | £16.1M | 16.5M |
| 2020 | £9.9M | £13.3M | 13.5M |
| 2019 | £7.9M | £6.6M | 9.5M |
| 2018 | £8.2M | £4.1M | 8.0M |
In the financial year (FY) ending July 31, 2021, FutureLearn made £11.3 million and lost £16.1 million. At the end of FY 2021, the company had £15.4 million in net assets, down from £32.4 million a year prior.
We don’t know the numbers for FY 2022, but we can assume the losses to be in a similar range, since the company needs an additional £15 million to continue to operate.
According to the filing, FutureLearn’s board and shareholders have come to an agreement to provide this additional £15 million in funding in 3 tranches of £5 million in July 2022, October 2022, and January 2023.
The last two tranches will be “dependent on meeting agreed milestones.”
FutureLearn is also looking into raising investment from third parties.
Below, you can find Class Central‘s complete analysis of FutureLearn over the years:
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Donald Clark
OU had relationship with BBC so…
Hired BBC Radio guy as CEO with no sector experience
Failed to swap him out, even though FL was all over the place
Weak board therefore no strategy
Also built a flat system supposedly based on social learning
It was a lie – it was a presentation layer with little back-end functionality
Failed to react to actual demand (vocational – business, IT, health care)
So strategy was to milk the causal spend from misguided UK Universities
Others have morphed into different models, FL has not
To be fair:
SEEK have provided board expertise, money and a new CEO
Then again:
New CEO has no sector experience, so similar mistake made again, but at least he has business experience and deserves to be given a chance…
Let’s see:
SEEK has deep pockets but no one funds at this rate with so little revenue growth or a meaningful profitability horizon
Marcus
I dont think, any cash from third parties is burned. FutureLearn have some interesting courses yes, but i personally i´m not impressed. The other point is, it seems that both shareholders the OU and SEEK have not really a interest to develop the platform and the company.
SEEK is a job search company, and have for sure the funds to invest, but i think they have not the experience to grow a company like Venture Capitalists. Additionally sector experience is also a key.
Marcus
Correction: “I think” should be right, not “I dont think”