2U Buys MIT and Harvard’s edX Platform for $800 Million in Cash
IBL News | New York
2U Inc. (Nasdaq: TWOU) announced today that it will purchase edX Inc. — a nonprofit founded by MIT and Harvard University — for $800 million in cash.
With the transaction, Online Program Manager (OPM) 2U will acquire all edX assets, including the brand, website with 50 million learners, a marketplace with 230 university and corporate partners, 3,500 digital programs, and the Open edX software.
The proceeds will go to an educational nonprofit led by Harvard and MIT.
2U stated that it plans to operate edX “as a public benefit entity, a class of purpose-driven organizations that balances the interests of shareholders with other stakeholders.”
The Lanham, Maryland – based said that “it has also committed to continuing to fulfill the edX mission by, among other things, 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 fully open-source and independent platform Open edX, owned by the nonprofit led by MIT and Harvard.”
2U and edX described the deal as “an industry-redefining combination that will help power the digital transformation of higher education, expand access and affordability, and usher in a new era of online learning.”
A themed, PR website called Transformingdigitaleducation.com was specifically created to announce the transaction.
With over 80 top universities as customers, 2U said was expecting “to approach $1 billion in yearly revenue by the end of 2021.”
In 2020, edX revenues were 84.6 million, according to public records.
“By combining 2U and edX’s global reach and offerings from free to degree, together we believe we can fully realize our shared vision, meet the growing worldwide demand for online education, and deliver growth and long-term value to shareholders and other stakeholders,” said 2U Co-Founder & CEO, Christopher “Chip” Paucek.
“As edX looks to its next phase of growth and impact, joining forces with 2U marks a major milestone in our evolution,” said Anant Agarwal, Founder, and CEO of edX and MIT Professor.
“Today’s announcement will carry forward this mission on a whole new scale, connecting many more learners with a wider range of high-quality options for content, credentials and degrees. With online education rapidly changing, it’s the right moment for this leap of evolution for edX,” said Harvard president Larry Bacow and MIT president Rafael Reif in a joint statement. “At the same time, the nonprofit that emerges from this transaction will enable us and our partners to support innovation that enhances learning for all and, we hope, play a catalytic role in closing the learning gap that exists for far too many.”
2U said that it will contribute to the Open edX platform. “Following the closing, 2U expects to be a significant contributor of code to the Open edX platform, and the transaction is expected to increase the impact that Open edX can have in supporting learning outcomes around the world. Open edX currently powers approximately 2,400 learning sites worldwide.”