In this concise EdTech news roundup, Michael Horn reviews four major developments that could reshape online learning. First, he explains 2U’s $800 million acquisition of the nonprofit edX platform run by MIT and Harvard, highlighting edX’s pioneering modular credentials (micro‑masters, micro‑bachelors), its financial challenges, and how the deal gives 2U a massive consumer pipeline and a full suite of products from free courses to high‑touch degrees, positioning it against Coursera and emerging low‑cost partners. Horn then expresses strong skepticism about the role of artificial intelligence in education, warning that AI‑driven recommendations can damage learner confidence and that the technology’s high‑stakes context demands stricter guardrails. Next, he celebrates Duolingo’s upcoming IPO, praising its mobile‑first, active‑learning approach, low‑cost language instruction, and disruptive testing products, while noting the limits of purely digital conversation practice. He briefly notes Instructure’s decision to go public again after a previous privatization, suggesting it aims to capitalize on the surge in online learning demand. Finally, Horn discusses Age of Learning’s $300 million funding round at a $3 billion valuation, emphasizing its successful freemium, direct‑to‑consumer model (ABCmouse) that serves 50 million learners and its potential expansion into schools. Throughout, Horn offers a bullish outlook on the latter three stories and wraps up with a call to stay tuned for future content on virtual schools.
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Good morning, everyone. Just wanted to give a quick roundup on some of the big news happening in EdTech this week. It's just Wednesday in our ready, we've seen four major headlines. The big one that probably exploded your head if it was like mine was 2U acquiring the nonprofit run jointly by MIT and Harvard of edX. EdX, 39 million people, having learned on its platform reach of over well over 120 million, brings in over 80 million in revenue a year, but was losing some money. So what's behind this deal for each? From my perspective, if I look at it, you look at the nonprofit. EDX had really advanced some major things in online learning, such as the micro master's degree, micro bachelor's degree, this notion of stackability and interoperability, and really taking a degree and dismantling it into its component parts to make for a much more modular ecosystem. But while their traffic did explode during the pandemic, couldn't possibly keep up with a place like Coursera that was growing even faster. And because of its access to private capital markets, especially as it went public, just the price of keeping up went up and up and up. And at some point, I think if you're Harvard and mit, you're saying, what's the purpose of having just a growing entity for its own sake? Do we want to keep sinking in a lot of money? They put in roughly $80 million, which is not enough, and we're losing money on it year over year. Does this make the most sense in the world? And so for them, I think this was a productive way to say, hey, we've launched something really important in the world and we're going to go give it to an organization for, mind you, $800 million to allow us to do other research and development on the future of online learning. Come back to that in just one moment. But this feels like a win. And into you who acquired edX, tremendous for them because now it allows them to better compete with Coursera that was in essence positioning itself as a disruptor relative to 2U. Now, thanks to the EDX acquisition, you see that TU has a much bigger direct consumer pipeline. They have millions of people that will be coming that have been coming and will continue to come to the EDX website, fueled by incredible higher ed brands that they will be able to take and say, okay, do you want a degree? Do you want a certificate? Do you want a micro masters? Do you want a micro bachelor's? Going to dramatically lower the cost of acquisition for their bigger programs that 2U offers for its boot camps for its degrees and so forth and be able to better target essentially a lot of people. Online learning has been this game where you've seen a lot of costs move up and up and up over time and this changes that dynamic in many ways for 2U in some productive ways. It also gives them a full suite of products and services that really run the gambit from free, just hop on, explore, take an online course to the high priced and very high touch degrees. It's a really neat set of offerings that I think think2u has now and positions them better for the disruptive competition that's been coming along from frankly not just Coursera, but also Noodle Partners and some of these entities that have created very different cost structures. Really love this move for both of these entities, 2U and EDX and Harvard, MIT. I think everyone comes out a winner from this and really exciting one. Note that I'll just, I'll focus on, which is that from my perspective you may have seen some in the Harvard and MIT side, I'd say okay, we're going to take this money, have a nonprofit that's going to do research and online learning, advancing pedagogy, better able to serve people who are underserved by education opportunities. I think that's all well and good and exciting. One of the areas they said was artificial intelligence. I continue to be pretty bearish on artificial intelligence when it comes to learning and instruction in education because just if Amazon uses artificial intelligence to show me an advertisement that has nothing to do with my life at the moment, they show me a squash racket or something like that, say you should buy this doesn't really harm me or hurt me. It might not be something I click on and marginally they get a few percentage point boost. But, but in education, when you're recommending something or making a judgment about someone's learning ability, the downside is very important because you can undermine someone's confidence, sense of self efficacy, their sense that they can continue to do the education. And so I think AI in education, the bar for doing it is much, much higher. And these algorithms typically work on big data sets making on average adjustments and just improving at the margins over and over again. But amazing technologies. I think it's going to struggle in a lot of the education contexts in which it's applied and I have deep suspicion over that. So hopefully the researchers actually will help that along or at least help us understand the guardrails better. But I wouldn't be just bullish about oh gee, now we're going to have the research behind AI that's really going to transform the world. Okay, that's that deal. Second deal. Really exciting. Duolingo said that they're going to go public. I think this is really interesting. Duolingo has been self evidently a disruptive innovation relative to say the Rosetta Stones of the world and the way people learn foreign languages. Is it as good as having a conversation face to face? No, absolutely not. But it's a really low cost. Love the mobile learning platform, the active learning that it produces where people are constantly answering questions and responding to really immerse themselves as much as possible in a foreign language environment. You don't get to speak with that native speaker. Totally immersive research is very clear about the benefits of active learning. I love the mobile platform. I think that is the future of a lot of the learning and we should be looking increasingly toward mobile learning platforms and not video for a lot of this. Love where Duolingo is going and that it's taking it public I think is going to be tremendously interesting to keep an eye on. I also by the way, love their tests. Not as much of a percentage of revenue as they had hoped for, but still significant. I think their tests that Duolingo offers are very disruptive to the standardized ones that are out there on the market. Okay. Two more instructure filed to go public again. They were obviously the disruptive darling in the learning management system market many years ago. Disrupted blackboard, they're going to be. Then they were taken private. They're going to go public again. This seems trying to take advantage of an opportunity where online learning has grown significantly over the last 12 months and maybe it keeps growing. We'll have to see. Last one that I'll talk about Age of Learning, the company behind ABC Mouse, which my kids love. And I've had the director of curriculum on my YouTube live channel as well before raised $300 million at a valuation of roughly $3 billion. They are this rare edtech company that has really cracked the direct consumer channel, if you will, particularly in the United States, but also worldwide. 50 million learners. They strike me as disruptive relative to a lot of the things out there. This freemium model that really works when you get to have the scale of direct to consumer. And so I expect that this is going to fuel a lot of growth and advancements. And I'm bullish about the future of Age of Learning and ABC Mouse and a lot of the other products that they're introducing. And I'm curious to see what happens as they start to do more and more to get into schools themselves. It's going to be tremendously interesting, but four big deals just in the matter of a couple days. Two unedx Love the marriage there duolingo going to public disruptive story couldn't be clearer. You have Instructure coming back public. We'll have to see what that actually means in my mind. And then Age of Learning raising a lot of capital to grow more. I'm bullish about that one as well. Just a quick wrap this week before the 4th of July. Stay cool, stay safe. We'll be back next time on the Future of Education. And if you like this, remember, rate it, subscribe, tell others so that people interested in this content can find it. I'll be back later today with more about virtual schools, so stay tuned. Thanks so much.
