About
2U (formerly 2tor) is re-imagining what online higher education can be by partnering with world-class research universities to deliver a truly exceptional student/faculty experience. 2U provides these schools with turnkey technology solutions to manage students from recruitment to enrollment to post-graduation job placement, as well as to develop and deliver curriculum in a purpose-built virtual environment. Students collaborate, learn, and interact with fellow students and professors in a way that enables the full degree experience while students are thousands of miles apart. 2U has already partnered with USC, Georgetown, UNC Kenan-Flagler, and Washington University (St. Louis) to grant master’s degrees in programs ranging from nursing to social work to business.
Thesis
2U allows the world’s great universities to enter the 21st century by re-envisioning what the online degree program can be. “Online” is no longer synonymous with lower quality—in 2U’s case, it actually means a superior experience for students, faculty and administrators. “School-as-a-Service” is the new SaaS.
People
2U is led by CEO and co-founder Chip Paucek and Chairman John Katzman. Paucek was formerly the CEO of Hooked on Phonics and brought the program to major U.S. retailers nationwide. Katzman founded The Princeton Review and oversaw its emergence as a leader in the test prep market. He is a luminary in the field of education innovation, technology, and reform.
Key Board Members:
- Paul Maeder (Highland Capital Partners)
- Rob Stavis (Bessemer Venture Partners)
- Tim Haley (Redpoint Ventures)
Management Team
- John Katzman, Chairman
- Founded and built The Princeton Review
- Rob Cohen, Chief Operating Officer
- Founder of largest Princeton Review franchise network
- Cathy Graham, Chief Financial Officer
- Previously CFO of Online Resources Corp.
- Jeff Rinehart, Chief Marketing Officer
- Previously Vice President of Marketing at Capital One
Product
2U provides institutions of higher learning with the tools, expertise, capital and recruiting they need in order to attain and retain high quality students. The Company helps develop marketing, curriculum and program management capabilities to enable delivery of a world-class educational experience. Students matriculate along the same standards, are taught by the same faculty, pay the same tuition, and receive the same degrees as their on-campus counterparts. The 2U platform makes extraordinary use of technology to bring the classroom to students anywhere in the world. Across every metric, students using 2U’s platform have expressed very strong levels of satisfaction with their online experience.
Potential
2U has the potential to disrupt higher education both in the U.S. and around the world. Only four years after its founding, the Company has already partnered with six universities for seven master’s programs, and aims to enroll nearly 3,000 students in 2012. 2U has identified over 20 different leading U.S.-based university partners in degree programs ranging from accounting to psychology.
Megatrends
- Internet
- Knowledge Economy
- Brands
- Outsourcing
- Globalization
How Big Can This Be?
2U can be the leading online educational platform in the world. Led by an exceptional management team, 2U has created the definitive online education platform for the world’s leading universities.
Predictability
2U’s business model has exceptional visibility, driven largely by very long-term contracts with university partners. In addition, the Company enjoys a strong revenue backlog driven by 18- to 24-month student enrollment cycles. Furthermore, 2U’s straightforward revenue share model with its best-in-class university partners enables the Company to mitigate pricing pressures being felt across other institutions of higher learning.
Risks
2U will face the typical challenges of scale, particularly as the Company invests heavily in sales and marketing over the near-term. In addition, the Company still faces the stigma of being a traditional online education company, which historically has implied lesser quality teaching, faculty and graduation rates. Overcoming this perception will require significant marketing spend and excellent outcomes in the Company’s existing degree programs.
