Coursera said its funding will come from two premier Silicon Valley firms, Kleiner Perkins, Caulfield & Byers and New Enterprise Associates.
In addition to the funding, the company said it has secured agreements with top-tier universities to offer Web-based classes on the Coursera platform for free.
Schools named by Coursera include Princeton, Stanford, the University of Pennsylvania and the University of Michigan.
Coursera's interactive online learning system was created by Stanford University computer scientists Andrew Ng and Daphne Koller who taught free Web-based classes through Stanford last year, The New York Times reported.
Computer-assisted learning was pioneered at Stanford in the 1960s but lately a new wave of interest in online education has been taking shape.
"When we offer a professor the opportunity to reach 10,000 students, they find it remarkably appealing," Dr. Koller said.