2U (company)

The company was founded in 2008 by John Katzman (co-founder of The Princeton Review), Chip Paucek (former CEO of Hooked on Phonics), and Jeremy Johnson as 2tor but later changed its name; In 2013, John Katzman left to start Noodle Partners, a similar company. As of 2019, Paucek continued to serve as CEO.[6] Paucek holds an MBA from the University of North Carolina at Chapel Hill that he earned online through that school's partnership with 2U.[7] 2U was started, in part, because its founders saw an opportunity due to the fact that few highly-ranked universities offered online instruction. 2U explicitly rejected the low-cost, low-quality business model of online education. 2U is the third company where Paucek was a founder.[8]

The founders of 2U self-funded until they reached their first deal to offer an online teaching degree with the University of Southern California (USC) in 2009. 2U's first enrollment form, for 120 students, was received from USC via fax in 2009. 2U partnered again with USC to offer an online degree in social work in 2010.[8]

After the USC deal but before its initial public offering, the company was backed by venture capitalists and raised $96 million.[9] The company went public on March 28, 2014, and raised $119 million by offering 9.2 million shares at $13 per share.[10]

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.[8]

A previous program. 2U's "Semester Online" for undergraduate universities was marketed as a platform for top-tier universities to offer online courses to paying students at participating universities. [lower-alpha 1] The company announced in April 2014 that Semester Online would end in the summer of 2014.[12]

Other schools such as the Syracuse University, Northwestern University, and the University of California, Berkeley have signed on with 2U to create online graduate degree programs.[13] 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. Such degrees are required in order to become a physician's associate. Yale's program has the same admissions requirements, curriculum, and tuition as the on-campus program. Degree programs managed by 2U offer exactly the same degree as their offline counterparts. As of 2015, about 12,300 students were enrolled in 2U partner programs.[14]

In late 2017, former Obama administration official Valerie Jarrett joined 2U's board. As of 2020, she remained in that position.[15][16]

In 2018, 2U launched the Harvard Business Analytics Program (HBAP) in conjunction with Harvard University. HBAP lasts nine months, is taught by faculty from Harvard's Business School, School of Engineering and Applied Sciences, and the Graduate School of Arts and Sciences. Graduates receive a professional certificate. Students in this program have an average of 17.5 years of work experience, are an average of 42 years old, and pay $50,000 in tuition.[8]

In February 2019, 2U announced that it had acquired a minority interest in Keypath Education. Keypath's services are similar to those of 2U. It was founded in 2014 and has 23 partner institutions in the United States, Canada, Australia, and the United Kingdom. 2U said its relationship with Keypath would allow it to offer its services to smaller and cheaper programs than it has in the past.[17]

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. The program started classes in the Fall 2019 and is taught in English. 2U also partners with Tecnológico de Monterrey and the Washington University School of Law to offer an online master of laws program.[17][18]

During a conference call with investors on July 30, 2019, Chip Paucek said the business wasn’t growing as he had hoped, and attracting large numbers of students was more challenging and more expensive than before. As a result, the company’s stock fell from $36.50 to $12.80 in 24 hours. Paucek said 2U would work to increase the efficiency of its marketing spending by reducing the number of programs it launches. He also said 2U would be more flexible with its pricing and offer hybrid pricing structures and fee for service in addition to its current revenue share model.[19] The net worth of the company fell from $4.7 billion in September 2018[20] to $1.35 billion in November 2019.[21]

In August 2019, the company announced that increasing competition was leading to a strategy based on non-degree programs having shorter courses, and development of technology “boot camps.”[6]

In August 2019, 2U announced that Catherine Graham, its chief financial officer (CFO), would retire from the company in October. Graham was replaced by Paul S. Lalljie as CFO. Lalljie worked at Neustar for nine years as CFO. In November 2019, Jennifer Ogden-Reese became 2U's chief marketing officer (CMO). Ogden-Reese was CMO of SeatGeek and has over 12 years of experience in senior marketing roles.[22]

On August 6, 2019, 2U announced its first undergraduate program. The program offers a degree in data science and business analytics, as well as six other degrees, from the University of London (UoL) with its member institution London School of Economics (LSE).[23] UoL, LSE and 2U aim to keep the cost of the three-year degree at $20,000, far lower than most of 2U's other programs. 2U usually focuses on high-tuition programs at selective universities. Starting in 2017, 2U diverged from this strategy. It acquired GetSmarter and later Trilogy Education. These firms offer short-term non-credit training programs.[24]

In 2020, Senators Elizabeth Warren and Sherrod Brown called for 2U and four other online program managers (OPMs) to disclose the terms of their contracts with colleges and universities in order to determine whether they were violating laws meant to safeguard consumers from predatory enrollment practices.[25]

In June 2020, 2U announced that it would offer $3 million in scholarships in increments of $2,500 to under-represented demographics. Recipients must demonstrate both need and merit. The scholarships can be applied to about 100 different programs with a strong emphasis on technical training.[26]

In late 2020, 2U announced a partnership with Netflix and Norfolk State University. They aim to create an online tech bootcamp with video lectures. The program will last 16 weeks. The first students will start classes in January 2021. Instructors will mostly be from Norfolk State but will also include guest lecturers from private industry. Staff from 2U's data science, engineering, and design groups will mentor students. The program will have three tracks: Java Engineering, UX/UI Design, and Data Science. Netflix is paying the costs for all students. Students will earn college credits.[27]

2U strongly benefited from the shift to online learning that was facilitated by the response to COVID-19. 2U saw large growth in gross revenue in 2020. The company also significantly reduced its debt. 2U was servicing more than 275,000 students as of late 2020.[28] 2U said that the pandemic also greatly increased interest in its revenue-sharing pricing model from both new and existing clients.[29]

In 2020, the London School of Economics agreed to expand its scope of business with 2U to include undergraduate degrees in mathematics and finance. 2U's CEO believes that this particular collaboration will help remove the negative stigma associated with online education.[28]

In September 2020, 2U and Columbia University's engineering school announced an expansion of their work together. 2U is helping launch the Columbia Artificial Intelligence Program. It is an online program targeted at working executives. The program takes nine months on a full-time basis and 18 months for part-time students. Admission will require programming and mathematical skills relevant to machine learning. The first cohort of students will start in 2021.[30]

Before the start of the 2020-2021 academic year, Simmons University announced that it would be delivering hundreds of courses online in order to cope with the COVID-19 crisis. 2U helped Simmons deploy all these courses. Simmons expanded its scope of work with 2U that already included six graduate programs with a total enrollment of 3,000 students. The expanded agreement with Simmons also provides for the creation of additional degree programs aimed at non-traditional students with lower tuition than in-person programs. Simmons receives services from 2U on a revenue-share basis.[29]

Amherst College used 2U's services to move some of its undergraduate courses online in the first semester of the 2020-2021 academic year.[29]

2U operates as an online program manager. It does not confer degrees.[31] Rather, it provides its clients with technology and other resources to create online classes and degree programs taught by the client institution's instructors with live video and recorded classes with multimedia presentations. The programs set-up by 2U and its clients generally have small class sizes and career services.[32] Students meet in a live video chat room with the professor and the other students.[33][13] This approach has led to a student retention rate of 84 percent.[34]

2U signs long-term contracts, typically 10-to-15 years in length, with its client institutions. Students pay standard tuition. 2U gets paid through revenue sharing.[35]

In May 2012, Forbes named 2U as one of the ten "Start-Ups Changing the World".[40]

In 2014, Inc. Magazine named 2U one of ten "Tech Companies Helping Humanity".[13]

In 2016, 2U was listed as a "Most Innovative Company" by Fast Company.[41]

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