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2U acquires edX: End of a dream?

The news came through a week or so ago that 2U (one of ed-tech's astonishing success stories) and edX (an early pioneer in the world of MOOCs—Massive Online Open Courses) are to merge.


A more accurate description: 2U, a NYSE listed for-profit with a market cap of $3bn as of this writing, is acquiring edX, and thereby access to its nearly 40-million registered users.


Both companies mean a lot to me. 2U because I was consulting with a rival OPM (Online Program Manager) when they burst onto the scene, scaring the bejaysus out of my colleagues on the business side with their radical business model (more on that below).


And, as for edX, I'd developed a number of platforms using their open-source code-base—clunky as it undeniably was I'd become rather fond of it and worked on developing some (I thought) rather nice interactive widgets using their system of "X-blocks." I'm also an admirer Anant Agarwal, edX's personable and highly intelligent leader: he strikes me as a thoughtful and highly principled man.

"Disruptive" is an over-used term but, oh boy, it was merited in the case of 2U and their hyper-aggressive business model.

"Disruptive" is an over-used term but, oh boy, it was merited in the case of 2U and their hyper-aggressive business model. "Radical" is another highly appropriate word: to approach top universities saying "We will develop and manage your online courses and we will pay for it...in return for a hefty slice of the downstream fees." Pretty much risk-free for their partner organizations in other words. High quality production (and, spies tell me, laser focus on keeping costs down) led to a full NYSE listing in 2014, and continued growth ever since.


And so now 2U will add edX in its stable (following their acquisition of Trilogy Learning back in 2019). But it's worth remembering that this (edX) is an organization that was founded on a mission to educate the world, free of charge. The possibilities that edX (along with other MOOC providers) were offering led the New York Times to famously declare that 2012 was the "year of the MOOC."

"Educate the world for free" sooner or later raises the question: "Who's going to pay for it?"

Reality has intervened, and so here we are: for all the PR spin around the acquisition, the vision clearly hasn't quite worked out. The revenue side of things was always going to be a challenge for edX ("educate the world for free" sooner or later raises the question: "Who's going to pay for it?") and various attempts to sell certifications and business courses have clearly not provided sustainability. (Coursera, an edX rival, has done a much better job here.) Student completion rates have remained disappointing, seldom getting beyond 15% according to one recent study


It's a probably inevitable step, therefore, for edX to merge with an organization with sharper and more ruthless commercial savvy. We're told that edX will remain (and, by law, must remain) a "public benefit entity" and will continue—at least for five years—to offer free courses.


But this can't paper-over the fact that edX has not succeeded on its own terms. One can't help shedding at least a small tear for the demise of what was such a noble dream.