US-listed 2U, the massive open online course (MOOC) provider, has acquired web-based course provider edX, a non-profit founded by Harvard University and MIT, for $800 million.
Proceeds from the sale of edX will be channelled into a non-profit, to be run by Harvard and MIT.
EdX was founded by Harvard and MIT in 2012, designed to democratise elite education with free classes available to students globally. Over time, the firm 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 cyber-security.
The transaction is a sign of how MOOC incumbents are seeking to expand their market share via M&A.
The takeover comes hot on the heels of the initial public offering of Coursera, a competitor to 2U, whose plans to float were revealed exclusively by this publication last year. FutureLearn is Europe’s closest competitor to 2U and Coursera.
“This is early innings in the digital transformation of education,” said 2U chief executive Chip Paucek, adding that he anticipates a time when “online education is normalized as, simply, education.”
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’s takeover of edX is expected to complete later this year, subject to regulatory approvals.
Rajay Naik, chief executive of Skilled Education and a co-founder of FutureLearn, commented on the deal: “This acquisition is another example of the large-scale consolidation taking place in the online higher education sector, with private sector companies increasingly determined to diversify their services and deepen relationships with public universities.
“Public-private partnerships will become increasingly important to adapt pedagogy, widen access and diversify income. This announcement underscores how British providers must retain their global distinctiveness as we seek to serve millions more students and keep pace with other international markets.”
Date published: 29 June 2021