Udemy Co-Founder Criticizes $2.5B Coursera Merger, Cites Product Stagnation

Gagan Biyani, co-founder of Udemy, publicly criticized the company’s acquisition by Coursera in a lengthy post on X in December 2025, describing the $2.5 billion all-stock merger as the consequence of years of weak product innovation, poor leadership decisions, and a board culture that systematically sidelined its founders. The merger is pending regulatory review and shareholder approval.

Founder Governance and Ownership Dilution

Biyani revealed that after Udemy’s Series B funding round, the founders owned less than 30% of the company, prompting the board to appoint outside CEOs to manage the business. Throughout its history, Udemy has cycled through seven different CEOs. Biyani argues that the board’s consistent preference for selecting external “buttoned-up suit” executives over a more dynamic founder/CEO model came at a significant strategic cost.

The governance structure left Biyani and co-founder Oktay Caglar severely marginalized within the organization. The pair were not even invited to Udemy’s initial public offering celebration, despite being the company’s inventors. “Nobody thought: ‘Oh maybe we should invite the people who invented the thing we’re all celebrating,’” Biyani wrote in his post.

Product Innovation Gap and Competitive Positioning

Biyani argues that Udemy became strategically stagnant over its 15-year history, failing to introduce any major product innovations. Instead, the company expanded its original video-course model into every available market segment. This approach generated substantial revenue—up to $800 million annually and a $500 million B2B business unit—but ultimately proved insufficient to maintain competitive advantage.

Meanwhile, Coursera pursued a more aggressive innovation strategy. The competitor added corporate training courses, built fully online degree programmes, and developed enterprise-grade tools that won investor confidence and commanded higher market valuations. Biyani acknowledged that Coursera “was a far worse product” in its early stages but admitted that it innovated heavily while Udemy stood still. Despite Udemy generating more total revenue, Coursera won what Biyani called “the court of investor opinion.”

Financial Performance and Merger Valuation

The combined entity resulting from the merger is valued at approximately $2.5 billion, below the $3 billion threshold Biyani suggested would reflect the companies’ combined assets. Biyani attributed this valuation gap to three factors: edtech’s failure to meet its growth promise, both companies selling products their customers do not love, and the long-term strategic cost of sidelining founders.

“By ignoring the founders, Udemy failed to innovate, which led to slowing growth, which led to mediocre public market results,” Biyani wrote. He characterized the merger as “critical for both companies’ survival,” but the depressed valuation underscores the cumulative impact of years of missed strategic opportunities and governance missteps.

Future Direction and AI-Era Innovation

Biyani closed his critique with a challenge for the merged company: to help enterprise learning and development (L&D) teams become “heroes of the AI era” and build the most advanced educational AI product for consumers. He emphasized that “the current education system sucks, and the world deserves something better,” signaling that the combined entity has an opportunity to reset its innovation trajectory if leadership prioritizes founder-led vision and aggressive product development.

The merger announcement in December 2025 marks a consolidation of two of edtech’s largest consumer-facing platforms, though the combined valuation reflects investor skepticism about the sector’s long-term growth prospects and the competitive pressures facing both companies.

Frequently Asked Questions

Q: Why did Udemy’s co-founder criticize the Coursera merger?

Biyani attributed the merger to 15 years of product stagnation and weak leadership decisions at Udemy, compounded by a board structure that sidelined the founders in favor of external CEOs. He argued that Coursera innovated more aggressively (adding corporate courses, online degrees, and enterprise tools) while Udemy expanded its original video model without major product evolution, causing Coursera to win investor confidence despite generating less revenue.

Q: How much revenue did Udemy generate before the merger?

Udemy generated approximately $800 million in annual revenue, plus a $500 million B2B business unit, prior to the merger announcement. Despite these strong figures, the company’s valuation lagged Coursera’s due to slower growth and perceived product stagnation.

Q: What is the timeline for the Coursera-Udemy merger approval?

The merger, valued at $2.5 billion in an all-stock transaction, was announced in December 2025 and is pending regulatory review and shareholder approval. No specific closing date has been disclosed in the available information.