The 2U edX Acquisition: OpenCraft's Take

This blog post was written by team member Fox Piacenti.

Travel’s been rare over the last year. Recently, our CEO Xavier and I flew into Cambridge and sat down with several clients and community members. It was the first time in a long time. Over the course of two weeks, each order of coffee came with a splash of the same question. Everyone wanted to know: what does the 2U edX acquisition mean for the Open edX community?

It’s a difficult question to answer— until the close of the deal was announced publicly, the details of the acquisition were hidden. When we met with our clients, they were still up in the air. Now we have a few more details. The things we know so far give us reason to be hopeful.

How Can a For-Profit Entity Acquire a Non-profit like edX?

If you’re like me, you wondered how a for-profit acquires a non-profit company. When a for-profit company buys another one, they pay the shareholders in exchange for their stake in the company. With an $800 million price tag — who gets all that money?

Nonprofits don’t have shareholders. At least, not in the traditional sense. Anant Agarwal, founder of edX and now Chief Open Education Officer at 2U, told us he “could not so much as buy a bicycle” with that money. When a for-profit company buys a non-profit company, the for-profit gets some or all of the assets of the non-profit. In this case, it included things like the contracts edX has with different institutions and the employment of edX’s current staff.

In exchange, the money from the transaction directly funds the nonprofit, reorganized, that will continue under the leadership of edX founders Harvard and MIT. This ensures that the money is not used to enrich specific individuals, but is put toward a purpose in line with the organization’s original goals.

In the case of the 2U edX acquisition, the non-profit will be in charge of the Open edX platform (distinct from the edX brand— as has always been the case). They also get ownership over the code and associated repositories. They can use the income to pay off any debts and hire team members to oversee the project, as well as fund other projects related to online education.

What Will Be the Fate of the Open edX Platform?

We don’t know the full impact. No one knows the answer to many questions about the non-profit. A common concern we’ve heard about the 2U edX acquisition is this: Will the Open edX project now be in the hands of a for-profit company with interests at odds with the community?

In our opinion, no. For one, the non-profit will be in charge of the platform going forward. In fact, this change helps resolve a long-standing conflict of interest where edX had to choose between investing time and resources into edX.org or the Open edX community. To understand why, it’s important to know how edX currently operates.

While almost all content on edX is available for free, edX offers learners the opportunity to pay for a certificate of achievement at the end of a course or program to demonstrate the knowledge they have gained from the content. The courses and programs are provided by Major institutions, along with the guidance of their instructors, through edX.org.

edX open sourced their platform early on and our CEO, Xavier, was the first to open a pull request— on the very day the platform was opened! We’ve been key players in the Open edX community ever since. While edX has been engaged in the community they’ve built around the platform, there has also been some friction.

How the 2U edX Acquisition Could Solve Long-Standing Collaboration Issues

edX has a model that includes both a free and paid track for courses in order to continue funding their mission to “Increase access to high-quality education for everyone, everywhere”. That means the thrust of their focus has been on achieving this goal. The open source project and its community continued to fuel vibrant contributions to the edX platform and mission. However, despite both edX and the Open edX community wanting to increase focus and investment in the development of Open edX, it could not be the first priority for the organization at the time. Even if it is ‘non-profit’, it still required revenue to run.

As a result, edX focused the platform on its specific use case. The non-profit could change this. With the $800 million price tag of the 2U edX acquisition, the nonprofit will have the resources to last for a long time, perhaps indefinitely, without needing to worry about funding.

With a dedicated team that has a major goal of pushing the platform forward, the entire community stands to gain. This team will not have the same pressures to prioritize edX-specific goals for the codebase over other teams. We still expect 2U to have major (perhaps the largest) influence over the codebase. After all, they will be the biggest users and contributors. But this layer of separation will put organizations from the rest of the community on more even footing.

Our Hopes Going Forward

As a member of OpenCraft, I’ve enjoyed working on the Open edX platform. edX’s work has allowed us to build a thriving business making Open Source software— a job many developers long to have. The signs I’ve seen talking with edX team members, and members of the community at large, make me hopeful.  The Open edX project is about to get a large boost from the arrival of a well-funded non-profit focused on the project and the community, as well as a new, large contributor with 2U. We gladly welcome both in the growing Open edX community.