MIT and Harvard to sell edX for $800 million
Proceeds of transaction will launch nonprofit focused on advancing learning
edX, the online learning nonprofit launched by MIT and Harvard in 2012, will be acquired for $800 million by 2U, Inc. a publicly traded education technology company. The $800 million proceeds will be used by MIT and Harvard to create a new nonprofit organization with a goal of “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,” according to an edX press release.
Through the transaction, edX’s assets will be transferred to a public benefit company owned by 2U while still maintaining its name, course offerings, partner arrangements, and users. edX will continue to offer its existing free courses and certificates at a fee under 2U. 2U will also retain all current edX employees who do not join the new nonprofit organization.
“This is the early innings in the digital transformation of higher education today,” 2U Co-Founder and CEO Christopher “Chip” Paucek said at a media briefing on the deal. “The next decade will bring a massive shift online; the pandemic has not only accelerated the adoption of online learning, but also set higher education institutions firmly on a path towards a more digital.”
edX CEO and MIT Professor Anant Agarwal said during the briefing that as the number of edX users grew during the pandemic to over 39 million learners, MIT recognized that “now was the moment to find the right like-minded and mission-aligned partner” for edX and began a search last fall, resulting in the deal with 2U.
Acquiring edX will allow 2U to work with over 225 partners and offer more than 3,500 digital programs, an increase from 2U’s current services (around 75 partners and 500 online learning offerings).
Provisions lasting five years negotiated between edX and 2U for the transaction include that 2U will guarantee affordability of edX courses, protect intellectual property rights of partners contributing to the courses, ensure that participating universities can continue under their standing agreements with edX, and protect the privacy of learner data on the edX platform. Additional provisions include that 2U will expand degree programs of edX, work to improve Open edX source code, increase accessibility to non-English speaking markets and learners with disabilities, and continue to offer and maintain the quality of courses offered on edX.
The transaction is expected to close in the fall, following regulatory and governmental approval.
The nonprofit organization arising from the transaction will continue to enhance the Open edX platform with a new mission of researching challenges in online learning.
President L. Rafael Reif wrote in a June 29 email to the MIT community that the nonprofit could possibly “invest in the potential of AI and other tools to make online learning more responsive and personalized to the individual learner.” Additionally, MIT expects that the nonprofit will collaborate with organizations with a direct understanding of the learning needs of various communities.
In an interview with The Tech, Provost Martin Schmidt PhD ’88 said that through 2U’s and the nonprofit’s commitment to improving the Open edX source code, MIT’s ability to deliver learning experience through online platforms will be strengthened. Additionally, the nonprofit hopes to use resources from the transaction “to make further investments in building learning platforms that can make more personalized learning experiences” through the use of augmented reality, virtual reality, or machine learning.
Schmidt added that an additional focus of the nonprofit is to reach learners who are part of communities that “aren’t being well-served by online learning resources that are available today.” The nonprofit organization intends to democratize access to online learning through partnerships with organizations and other forms of engagement
MIT’s own massive open online courses (MOOCs), or MITx, will remain in place. Faculty with MITx classes can choose to continue offering them on edX, move them to a new platform called MITx Online, consider options such as MIT’s OpenCourseWare or Open Learning Library, or remove the classes. The new MITx Online platform will be built based on Open edX but host only MIT MOOCs.