2U to Acquire edX, Pledges to Continue the edX Mission

• By Rhea Kelly
• 06/29/21

Online education company 2U has announced it will acquire edX, the online learning platform founded by Harvard and MIT, for $800 million. Together, the organizations will boast a reach of more than 50 million learners around the globe, 230-plus partners and more than 3,500 digital programs.

A key part of the deal is 2U's commitment to advancing edX's mission to expand access and affordability to high-quality education for all learners, according to a news announcement. 2U plans to operate edX as a public benefit entity, a designation for for-profit organizations that focus on achieving particular public-benefit goals and balancing those priorities with serving shareholder interests. This "will allow edX's long-standing commitment to the public good to be embedded in its new charter," an MIT frequently asked questions document explained. "In this new incarnation, edX will operate under a set of guidelines that will preserve its mission."

2U said it will fulfill that mission in a number of ways, including:

• Guaranteeing affordability through the continuation of a free track to audit courses;
• Protecting the intellectual property rights of faculty and universities that contribute massive open online courses;
• Ensuring that participating colleges and universities may continue under their standing agreements with edX;
• Protecting the privacy of individual data for all learners who use the edX platform; and
• Contributing to the ongoing development of the open source Open edX platform.

The FAQ pointed to increased competition from the for-profit online learning market — exacerbated by the surge in remote learning during the pandemic — as a significant driver behind the deal. "As currently structured and funded, edX does not have the resources to compete in the rapidly evolving for-profit online learning marketplace as a platform that aggregates course content from other institutions," the FAQ explained. "For several years, online learning has been the subject of growing investment by commercial firms. The pandemic accelerated that trend, with increasing investment enabling those companies to improve their online platforms and spend heavily on marketing to learners and universities."

MIT President Rafael Reif echoed that assessment in a letter to the MIT community: "Covid drove an explosion in remote learning, which spurred huge investments into edX's commercial competitors. This put edX, as a nonprofit, at a financial disadvantage. This new path recognizes this reality and offers a solution that allows edX to continue to support and maintain the key aspects of its mission."

As Harvard Provost Alan Garber put it in an interview with the Harvard Gazette, "edX has done well for nearly a decade, and it's something that we're very proud of. It became evident, though, that as for-profit players in this space invested ever-increasing resources into their offerings and their technological platforms, edX risked falling behind. 2U has the resources to invest in new platforms and in marketing in ways that edX hasn't been able to do as a nonprofit. This means 2U also has the ability to grow the platform into an entity that reaches even more learners and in new and innovative ways."

"As edX looks to its next phase of growth and impact, joining forces with 2U marks a major milestone in our evolution," commented Anant Agarwal, MIT professor and founder and CEO of edX, in a statement. "2U's people, technology and scale will expand edX's ability to deliver on its mission of providing access to high-quality education to enable all learners to unlock their potential. Together with our university and institutional partners, we will continue to reimagine education in ways that transform the lives of global citizens and positively impact generations to come."

Proceeds from the acquisition will go to an as-yet-unnamed nonprofit governed by Harvard and MIT, dedicated to "reimagining the future of learning for people at all stages of life, addressing educational inequalities, and continuing to advance next generation learning experiences and platforms," the news announcement said. The nonprofit will independently maintain the Open edX platform.

The transaction is expected to close this fall. Additional information is available on the 2U site.