Harvard University and the Massachusetts Institute of Technology agreed Tuesday to sell nonprofit online course provider edX, which they co-founded in 2012, to education-technology company 2U.
The deal will unite two of the world’s biggest online education platforms, tapping heightened demand from universities around the world to aggressively expand their digital offerings. Harvard and MIT, meanwhile, will roll the proceeds into a new nonprofit focused on inequalities in educational access.
Stay In (And Away From) School
Massive, open, online courses (MOOCs) have failed to outshine traditional university education, but after the pandemic drove courses online almost overnight, digitization is expected to become more common in the classroom. And many investors view higher education — one of the least digitized industries — as primed for disruption:
- Last year saw $16.1 billion dumped into global edtech, almost double the previous investment record set in 2018. And yet, college budgets dedicate less than 5% of spending to IT, indicating plenty of room for growth.
- The University of Illinois already relies on remote technology to cut faculty labor costs, allowing students to complete an MBA degree for $22,000. And Georgia Tech’s online computer science graduate program, which topped 10,000 enrollments last year, has a price tag of just $7,000.
“This is early innings in the digital transformation of education,” 2U CEO Chip Paucek told The Wall Street Journal. 80 partner schools, including Georgetown and USC, use the firm’s web platform to offer courses, on top of marketing and digital tools and IT infrastructure. 2U has also started online boot camps and technical-training programs, and expects to pull in $940 million in revenue this year.
What 2U Gets: EdX has over 160 university partners, and offers some 2,000 free courses taught by experts in everything from machine learning to the art of negotiation. 2U has promised to keep free EdX courses available, instead earning its take on fee-based completion certificates and course credits.