2U, a SaaS platform that helps nonprofits and colleges run online universities, plans to acquire all of Harvard’s assets and MIT-founded edX for a $ 600 million deal, according to multiple sources. 2U did not immediately respond to requests for comment and it is unclear if this is a pure cash transaction.
The deal gives 2U, a company that went public in 2014 and continues to be one of the few public edtech companies in the United States, a new wave of co-authored content for its software. 2U’s last major acquisition came in 2019 when it paid $ 750 million to acquire Trilogy Education, a company that works with universities to build in-person and online bootcamps.
EdX was founded in 2012 amid a series of massive open online course offerings (MOOC), including Udacity and Coursera. Founded as a non-profit, the company had a tempting promise when it started: It would help anyone in the world take a Harvard or MIT course for free. The institutions had of course put a total of $ 60 million in donations into edX to keep the operation free. Its own launch came weeks after Coursera, now a publicly traded company, announced that Princeton, Stanford, UPenn, and the University of Michigan were running courses on their own online learning platform.
Today edX offers over 3,000 courses under the direction of President and Professor Anant Agarwal, which are taught by 15,000 lecturers and used by 35 million users. Open edX, the platform’s open source platform, is used by 2,400 learning sites worldwide, according to the organization’s website.
EdX will become a non-profit corporation as part of this transaction. According to sources, all proceeds from the transaction will go to another nonprofit managed by Harvard and MIT. It is unclear whether all or part of the proceeds from the transaction will benefit this fair learning nonprofit.
Part of this transaction is shaped by the fact that edX was transparent about its own financial problems and its path to becoming a self-sustaining company. MIT Provost Rafael Reif had pointed out possible income from the program, which was first started in 2012, and said: “It’s not about making money. That is, we intend to find a way to support these activities. There are several approaches we are considering and we don’t want this project to weigh on MIT or Harvard budgets. “
In 2018, that same fiscal year with $ 37 million in revenue, edX introduced a support fee in addition to its ongoing offering that prompts students to pay for a verified certification after completing the course. In the announcement, the company wrote, “We believe we need to move towards a financial model that enables edX and our partners to achieve sustainability, and we recognize that this means moving away from our current model, to offer practically everything for free. “
Now it seems like the new transaction and edX’s decision to transform itself into a not-for-profit company could become the financial model it has been looking for itself. 2U is committed to continuing edX’s free courses for at least five years, sources say. The appearance and access to edX can then deviate from this original concept. The combined forces of edX and 2U could reach over 50 million learners.