2U (company)
   HOME

TheInfoList



OR:

2U is an American
educational technology Educational technology (commonly abbreviated as edutech, or edtech) is the combined use of computer hardware, software, and educational theory and practice to facilitate learning and teaching. When referred to with its abbreviation, "EdTech" ...
company that contracts with non-profit colleges and universities to build, deliver, and support online degree and non-degree programs. It owns
edX edX is an American For-profit higher education in the United States, for-profit massive open online course provider. It was founded by MIT and Harvard. It is a subsidiary of 2U (company), 2U. History edX was founded in May 2012 by the admi ...
. Kees Bol is its CEO.


History

2U was founded in 2008 by John Katzman. The company was originally named 2tor (pronounced "Tutor"). Katzman recruited Chip Paucek, and technology entrepreneur Jeremy Johnson to be co-founders. Katzman was the CEO through 2012, when he became chairman and appointed Paucek as CEO. Katzman funded 2U in 2009 through the launch of its first online teaching degree with the
University of Southern California The University of Southern California (USC, SC, or Southern Cal) is a Private university, private research university in Los Angeles, California, United States. Founded in 1880 by Robert M. Widney, it is the oldest private research university in ...
. In 2010, 2U partnered again with USC to offer an online degree in social work. Students of relevant programs sued both 2U and USC in 2022. In 2011, Georgetown University's School of Nursing and Health partnered with 2U to offer a degree program. The Kenan-Flagler Business School at the University of North Carolina started offering an online MBA through 2U the same year. In March 2011, the company raised a $32.5 million Series C, bringing its total funding to $65 million. In February 2014, 2U announced that Sallie Krawcheck, a former executive at Bank of America and Citigroup, and Earl Lewis, president of the Andrew W. Mellon Foundation, added to the company's board. On March 28, 2U went public and raised $119 million by offering 9.2 million shares at $13 per share. By July, other schools such as
Syracuse University Syracuse University (informally 'Cuse or SU) is a Private university, private research university in Syracuse, New York, United States. It was established in 1870 with roots in the Methodist Episcopal Church but has been nonsectarian since 1920 ...
,
Northwestern University Northwestern University (NU) is a Private university, private research university in Evanston, Illinois, United States. Established in 1851 to serve the historic Northwest Territory, it is the oldest University charter, chartered university in ...
, and the
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...
signed on with 2U to create online graduate degree programs. In March 2015, Yale University and 2U announced that they were partnering in order to offer a full-time, online master of medical science degree. By 2015, about 12,300 students were enrolled in 2U partner programs.


Growth through acquisition (2017-2021)

Starting in 2017, 2U diversified its strategy and acquired education companies GetSmarter, and later Trilogy Education, firms offering short-term non-credit training programs. In 2017, Paucek earned an MBA online from the University of North Carolina at Chapel Hill, through the school's partnership with 2U. In late 2017, former Obama administration official Valerie Jarrett joined 2U's board. In 2018, 2U launched the Harvard Business Analytics Program in conjunction with
Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...
. Students in this program had an average of 17.5 years of work experience, were an average of 42 years old, and paid $50,000 in tuition. In early 2019, 2U announced that it had entered a partnership with EGADE Business School at Tecnológico de Monterrey in Mexico to offer an online MBA program. 2U also partnered with Tecnológico de Monterrey and the Washington University School of Law to offer an online master of laws program. On August 6, 2U announced its first undergraduate program, offering a degree in data science and business analytics, as well as six other degrees, from the
University of London The University of London (UoL; abbreviated as Lond or more rarely Londin in Post-nominal letters, post-nominals) is a collegiate university, federal Public university, public research university located in London, England, United Kingdom. The ...
(UoL), with its member institution
London School of Economics The London School of Economics and Political Science (LSE), established in 1895, is a public research university in London, England, and a member institution of the University of London. The school specialises in the social sciences. Founded ...
(LSE). UoL, LSE and 2U planned to keep the cost of the three-year degree at $26,000, far lower than most of 2U's other programs. In September, 2U created a "Framework for Transparency", with a commitment to publishing transparent data on topics including university oversight and accountability, access, quality and outcomes. In 2020, Senators Elizabeth Warren and Sherrod Brown called for 2U and four other online program managers to disclose the terms of their contracts with colleges and universities to determine whether they were compliant with consumer protection laws. In June, 2U announced that it would offer $3 million in scholarships in increments of $2,500 to underrepresented demographics, and the recipients would have to demonstrate both need and merit. The scholarships could be applied to about 100 different programs with a strong emphasis on technical training. Later that year, 2U announced a partnership with Netflix and
Norfolk State University Norfolk State University (NSU) is a Public university, public Historically black colleges and universities, historically black university in Norfolk, Virginia. It is a member of the Thurgood Marshall College Fund and Virginia High-Tech Partnersh ...
to offer free online tech bootcamps to current students and alumni. In November, 2U published its first transparency report, which showed it had invested $1.3B in its non-profit partners' degree programs, and 72% of students graduate from those programs. 2U strongly benefited from the shift to online learning brought on by the response to COVID-19, with a large growth in gross revenue in 2020. The company also reduced its debt. 2U was servicing more than 275,000 students as of late 2020. 2U said that the pandemic also increased interest in its revenue-sharing pricing model from new and existing clients. Also in 2020, the London School of Economics agreed to expand its scope business with 2U to include two additional undergraduate degrees in mathematics and finance. In September, 2U and Columbia University's engineering school announced an expansion of their work together, where 2U would help launch the Columbia Artificial Intelligence Program, an online program targeted at working executives. Before the start of the 2020–2021 academic year, Boston, Massachusetts-based Simmons University announced that it would be delivering hundreds of courses online in order to cope with the COVID-19 crisis. The expanded agreement with Simmons also provided for the creation of additional degree programs aimed at non-traditional students, with lower tuition than in-person programs. Simmons received services from 2U on a revenue-share basis. In June 2021, 2U announced a strategic agreement with education assistance benefits manager Guild Education. The same year, 2U purchased
massive open online course A massive open online course (MOOC ) or an open online course is an online course aimed at unlimited participation and open access via the World Wide Web, Web. In addition to traditional course materials, such as filmed lectures, readings, and p ...
(MOOC) provider
edX edX is an American For-profit higher education in the United States, for-profit massive open online course provider. It was founded by MIT and Harvard. It is a subsidiary of 2U (company), 2U. History edX was founded in May 2012 by the admi ...
for $800 million cash. Also in June, Netflix and 2U announced an expansion of their boot camps for Talladega College, St. Edward's University,
Marymount University Marymount University is a Private university, private Catholic university with its main campus in Arlington County, Virginia, United States. It was founded as Marymount College in 1950. Marymount offers bachelor's, master's and doctoral degre ...
, and Edward Waters College.


Downsizing and reorganization (2021-present)

In October 2021, Valerie Jarrett resigned from the 2U board. In November 2021, an article in ''
The Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...
'' alleged that 2U often used aggressive means to recruit students for the University of Southern California’s master’s in social work and that "USC social-work graduates who took out federal loans borrowed a median $112,000. Half of them were earning $52,000 or less annually two years later." In 2022, the company was criticized for its online program manager contracts in which it licenses its courses, through a revenue-sharing agreement, to participating colleges and for its student recruitment practices. On May 16, 2022, Bloomberg reported that Indian education tech company Byju's was in talks to acquire 2U, along with fellow American education technology company
Chegg Chegg, Inc., is an American Educational technology, education technology company based in Santa Clara, California. It provides homework help, digital and physical textbook rentals, textbooks, online tutoring, and other student services. The comp ...
. In June 2022, it was reported that Byju's had put forward an offer of more than US$1 billion to acquire 2U. On July 28, 2022, Paucek announced that the company would layoff 20% of its workforce "across the board". In December 2022, a class action suit was filed against 2U and the University of Southern California "defrauded students by using misleading U.S. News & World Report rankings to promote the courses." In 2023, 2U sued the federal Department of Education for establishing new rules to provide more oversight of third-party servicers. The lawsuit asserted that the department exceeded their authority by bypassing the federal rule-making process by abusing regulatory guidance. The Department of Education rescinded their guidance on third-party services in October of 2024. On September 28, 2023, Chip Paucek announced organizational changes in the company that would require more layoffs. On November 9, 2023, USC and 2U announced a mutual decision to end the majority of its programs, including the social work program. 2U shares dropped 57 percent that day. On November 17, 2023, Paul Lalljie, 2U's CFO, replaced Chip Paucek as CEO. 2U's chief legal officer Matt Norden became CFO. On January 3, 2024, chief revenue officer Harsha Mokkarala resigned. Andrew Hermalyn was appointed president of the degree program segment and Aaron McCullough was appointed president of the alternative credential segment. As of 2023, 2U's largest outside shareholder was ARK Invest. As of 2023, 2U had never made an annual profit. On July 25, 2024, 2U filed for
Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...
protection which eliminated over $450 million of debt. As of 2024, the company planned to continue operating as a private company. On October 4, 2024, Paul Lalljie stepped down as 2U's CEO. Matt Norden then served as interim CEO until January 27, 2025, when Kees Bol became the current CEO.


Business model

2U has operated as an online program manager. As of 2024, 2U had about 250 clients including
Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...
,
Yale University Yale University is a Private university, private Ivy League research university in New Haven, Connecticut, United States. Founded in 1701, Yale is the List of Colonial Colleges, third-oldest institution of higher education in the United Stat ...
,
MIT The Massachusetts Institute of Technology (MIT) is a private research university in Cambridge, Massachusetts, United States. Established in 1861, MIT has played a significant role in the development of many areas of modern technology and sc ...
,
University of Pennsylvania The University of Pennsylvania (Penn or UPenn) is a Private university, private Ivy League research university in Philadelphia, Pennsylvania, United States. One of nine colonial colleges, it was chartered in 1755 through the efforts of f ...
,
Columbia University Columbia University in the City of New York, commonly referred to as Columbia University, is a Private university, private Ivy League research university in New York City. Established in 1754 as King's College on the grounds of Trinity Churc ...
,
Georgia Tech The Georgia Institute of Technology (commonly referred to as Georgia Tech, GT, and simply Tech or the Institute) is a public research university and institute of technology in Atlanta, Georgia, United States. Established in 1885, it has the lar ...
,
University of California, Berkeley The University of California, Berkeley (UC Berkeley, Berkeley, Cal, or California), is a Public university, public Land-grant university, land-grant research university in Berkeley, California, United States. Founded in 1868 and named after t ...
,
Rice University William Marsh Rice University, commonly referred to as Rice University, is a Private university, private research university in Houston, Houston, Texas, United States. Established in 1912, the university spans 300 acres. Rice University comp ...
,
University of North Carolina The University of North Carolina is the Public university, public university system for the state of North Carolina. Overseeing the state's 16 public universities and the North Carolina School of Science and Mathematics, it is commonly referre ...
, and
University of Texas The University of Texas at Austin (UT Austin, UT, or Texas) is a public research university in Austin, Texas, United States. Founded in 1883, it is the flagship institution of the University of Texas System. With 53,082 students as of fall 2 ...
. As of 2021, 2U signed long-term contracts, typically 10 years in length, with its client institutions. Students pay standard tuition as set by the partner university. Under this model, 2U got paid through revenue sharing.


Subsidiaries


GetSmarter

In early 2017, as its first acquisition, 2U acquired GetSmarter for $103 million and a $20 million earn-out. GetSmarter was founded in 2008 in South Africa by Sam and Robert Paddock. It offers short-term online courses in partnership with major universities. In 2016, GetSmarter had $17 million in revenue and roughly 400 employees. At the time of its acquisition, GetSmarter continued to operate as an independent firm.


edX

In 2021, 2U announced it would purchase edX, a platform created by MIT and Harvard in 2012. edX has since grown to offer other credentials such as professional certificates, MicroMasters, and MicroBachelors.


Recognition in the media

In May 2012, ''
Forbes ''Forbes'' () is an American business magazine founded by B. C. Forbes in 1917. It has been owned by the Hong Kong–based investment group Integrated Whale Media Investments since 2014. Its chairman and editor-in-chief is Steve Forbes. The co ...
'' named 2U one of the ten "Start-Ups Changing the World". In 2014, '' Inc. Magazine'' named 2U one of ten "Tech Companies Helping Humanity". In 2017 and 2022, 2U was listed as a "Most Innovative Company" by ''
Fast Company ''Fast Company'' is an American business magazine published monthly in print and online, focusing on technology, business, and design. It releases six print issues annually. History ''Fast Company'' was founded in November 1995 by Alan Webb ...
''.


See also

*
For-profit higher education in the United States For-profit higher education in the United States refers to the commercialization and privatization of American higher education institutions. For-profit colleges in the United States, For-profit colleges have been the most recognizable for-profi ...


References


External links

* * {{DEFAULTSORT:2tor Educational technology companies of the United States Educational software companies Learning management systems Companies formerly listed on the Nasdaq Companies based in Prince George's County, Maryland Lanham, Maryland Education companies established in 2008 2014 initial public offerings American companies established in 2008 Companies that filed for Chapter 11 bankruptcy in 2024