Officials with edX say the group sought the transaction because they believed it would likely become harder for a nonprofit like them to keep pace with for-profit competitors. Much like the rest of the education technology field, many of edX's rivals received major investments during the pandemic.
"This was all about how best to advance the mission," explained Harvard Provost Alan Garber. "And the connection with 2U seemed to us to be the exact right way to go."
The proceeds from the sale will fund a new nonprofit led by MIT and Harvard aimed at improving online education and to continue the group's stated mission of transforming education.
"We intend, through the nonprofit, to make sure the fruits of our work are shared as widely as possible," added Garber. "We believe we have the opportunity not only to improve learning for everyone but to address inequities in education."
edX was founded in 2012 and is probably best known for offerings like Massive Open Online Courses (more commonly known as MOOCs) along with micro bachelors and masters programs.
In its early stages, most of the courses were free, but the platform eventually moved on to offer credentials like the "MicroMasters." Today, they provide more than 160 universities and industry partners with the technology to host their own online programming.
If state regulators approve the deal, 2U would adopt edX as a subsidiary and take on the nonprofit's partner arrangements and current course offerings.
Officials with 2U say they're confident edX's partner organizations will want to continue on with them after their current contracts expire.
"We've got really good odds of keeping the band together," said 2U CEO Chip Paucek.
To do that, Paucek says, the organization has committed to protecting faculty intellectual property rights, committing long term to affordability by continuing to offer a free track to audit every edX course and providing accessible features for learners with disabilities. Paucek said he's also excited about the idea of growing the learning models that edX created like the MicroMasters.
The CEO of edX, Anant Agarwal, did not provide detailed information about his future with the company, but said he would be determining his exact path with edX and 2U in the coming days and weeks. edX staff are expected to remain in their current roles and teams until 2U determines a plan for bringing the two organizations together.
Experts in the online education field say this deal is significant.
"The world of online education has been maturing and growing rapidly," said Sean Gallagher, the founder and executive director of Northeastern University’s Center for the Future of Higher Education and Talent Strategy. "There's a lot of momentum for online education companies to be publicly traded and scaling and competing."
Gallagher added that this acquisition is part of a larger trend among companies that specialize in online program management (OPM). In 2018 Purdue University Global acquired Kaplan University from Kaplan Higher Education. And in 2020 the University of Arizona announced it was acquiring Ashford University, a fully online for-profit institution.
It's still too early to tell what the impact on students might be, but Kemi Jona, the Assistant Vice Chancellor for Digital Innovation and Enterprise Learning at Northeastern University, believes it will likely be minimal.
"I think, for many students it will be business as usual, except that maybe these university partners will have stronger platforms to hock their wares," he said. But, he added, "The more skeptical side is this is just a play for eyeballs and buying for marketing clout."
The cost of marketing was highlighted in 2U's recent investor presentation as a benefit that will come from this deal. In 2020, the marketing cost behind enrolling one student was about $3,900. Company leaders hope to reduce that to around $3,500 once the acquisition is complete.