2 min read.Updated: 29 Jun 2021, 05:40 PM ISTMELISSA KORN, The Wall Street Journal
Education-technology company 2U to buy online-course platform edX; proceeds to go to a nonprofit run by the two universities
Education-technology company 2U Inc., which runs graduate programs for dozens of top universities, is buying web-based course provider edX, a nonprofit founded by Harvard University and the Massachusetts Institute of Technology, for $800 million.
The deal combines two major players in online instruction as universities around the world push more aggressively into digital offerings. Many schools scrambled to shift courses online when the pandemic shut campuses last year, and they are now expected to build on—and polish—the programs.
The sale proceeds will go to a nonprofit, to be run by Harvard and MIT, that the schools say will focus on reducing inequalities in access to education. It will maintain the open-access course platform built by edX, research online and hybrid-learning models, and work to minimize the digital divide that still serves as a barrier for many younger students and adults, the schools said.
“This is early innings in the digital transformation of education," said 2U CEO Chip Paucek, adding that he anticipates a time when “online education is normalized as, simply, education."
EdX was founded by Harvard and MIT in 2012, its aim to democratize elite education with free classes, taught by top professors, available to students globally. Over time, it added completion certificates, available for a fee, and course sequences that, when stacked together, could lead to credentials and ultimately a degree. It also began providing corporate training in subjects including entrepreneurship and cybersecurity.
EdX has more than 160 university partners, with more than 2,000 courses in areas including machine learning, negotiations and computer programming.
It will operate as a public-benefit entity within 2U, which said it has committed to continuing free access for those who just want to audit classes and not earn credentials, as well as to providing stackable credentials and low-cost degrees.
2U handles the nuts and bolts of online education—such as marketing to prospective students and running the web platform—for around 80 partner schools that include Georgetown University and the University of Southern California. The schools use their faculty and control admissions decisions and accreditation.
In recent years 2U also has expanded into online boot camps and technical-training programs. The company has forecast $940 million in revenue this year.
Massive, open, online courses, known as MOOCs, never quite revolutionized higher education to the point of replacing traditional university degrees, as some early supporters predicted. Universities encouraged faculty to sign on and teach the free courses, but generally didn’t award academic credit to their own students for taking them.
But MOOCs like those run on edX’s platform have upended college in other ways, allowing schools like the Georgia Institute of Technology to offer extremely low-cost degrees without cannibalizing the demand for their campus-based programs.
The deal is expected to close later this year, pending regulatory approval.