July 22, 2022

Byju's Purchasing 2U! What Does This Mean for Colleges?

B Bloomberg reported late last month that Byju's, an Indian ed-tech behemoth, has put more than $1 billion on the table to buy 2U, a web programme manager. 2U is one of the largest online-program managers, or OPMs, in the United States, known for scaling up online-degree programmes and collaborating with over 130 American universities, including Arizona State, New York, and Syracuse Universities. It is also the parent company of the online-course provider edX.

A question on everyone, from students to stakeholders’ minds is what happens if the company that runs online college programmes changes hands? As a foreign educational technology company attempts to acquire 2U, higher education leaders are asking themselves this question.

…colleges are concerned that if Byju's wanted to cut costs or focus more on short-term products at the course level, it would reduce the "high-touch" model that many institutions have come to expect…

Scenarios in which an international supplier seeks to acquire an American company that is not in direct competition is highly unusual in the industry. And it's already raising concerns among colleges about what this means for the scope and quality of 2U's services.

According to experts, colleges are concerned that if Byju's wanted to cut costs or focus more on short-term products at the course level, it would reduce the "high-touch" model that many institutions have come to expect. In exchange for paying $2 million through tuition-sharing agreements We are also concerned about the temporary disruptions that can occur when a company undergoes a reorganisation, a stakeholder said.

University leaders are concerned that Byju's intention is to use foothold and cash flow to achieve another goal, and that 2U customers will not be prioritised. Airing his fears, Clay Shirky, vice provost for educational technology at New York University, who works with 2U, said, "That's what worries us." when asked about what the Byju's takeover of 2U will mean.

While the bidder is unexpected, industry experts note that poaching 2U is not, given the drop in the listed company's market value. They see this offer as a sign of the changing nature of the ed-tech market.

Posted in News and tagged News, USA, Byju's, 2U, American Universities, edX, High-Touch Model
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