Former MIT-owned edX’s parent company goes bankrupt
On July 27, 2U Inc., the online education firm that acquired edX from MIT and Harvard for $800 million in 2021, announced its Chapter 11 bankruptcy filing.
Despite this significant financial move, the company assures that the decision will not disrupt students or courses. Before the bankruptcy declaration, the company faced severe financial challenges, including an 86% drop in stock value and several layoffs, leading to questions about the future of edX.
Founded in 2008, 2U has expanded its reach by partnering with over 250 universities worldwide. Harvard and MIT originally launched edX in 2012 to broaden access to education. This acquisition of edX in 2021 added 3,300 courses from 160 universities. While 2U is working through its bankruptcy proceedings, MIT and Harvard have moved forward by using the proceeds from the edX sale to establish Axim Collaborative, a nonprofit focused on educational innovation. Axim has already funded 15 partnerships with institutions, including community colleges and historically Black colleges and universities.
In an agreement with creditors, 2U's debt will be reduced by more than half, and the company is set to receive a $110 million cash infusion, pending approval by a U.S. bankruptcy court.