Online education firm FutureLearn has been acquired by Global University Systems (GUS) in a deal that will see its original investor, the Open University, break financial ties with the company, Times Higher Education understands.
The deal – which was set to be formally announced imminently – will see the Netherlands-based GUS take control of FutureLearn, buying out the OU as well as the Australian Seek Group, which had both previously owned a 50 per cent share in the company.
It follows FutureLearn’s decision earlier this year to “significantly reduce expenditure” after suffering heavy financial losses. The company posted a £16 million loss in its accounts for 2021 and its shareholders were forced to invest a further £15 million in the platform in August after it became clear that it would not have sufficient funding in place for its requirements over the next 12 months.
One of the original massive online open course providers (Moocs), the UK-based FutureLearn has struggled to make its offering profitable in the face of heavy competition from larger US competitors.
It is understood that the deal with GUS will allow FutureLearn to expand into providing careers advice via access to GUS’ artificial intelligence career management system, which – it is hoped – will help it differentiate itself from its peers.
FutureLearn is also set to expand into developing countries, with territories including Africa, Asia, Central and South America and the Caribbean expected to be targeted. Despite selling its share in the company, the OU will continue to offer its courses via the platform.
GUS, founded in its current form by Russian entrepreneur Arkady Etingen, owns a number of for-profit higher education institutions in the UK, including the University of Law and Arden University.
It also owns St Patrick’s College and the London School of Business and Finance, institutions that came under close scrutiny in the mid-2010s after both rapidly expanded recruitment of students on public-backed loans studying sub-degree-level higher national certificate and higher national diploma courses. Both had their licences to recruit international students suspended.
GUS also owns a number of higher education institutions overseas.
Neil Mosley, an online education consultant, said that the deal was positive in that it would ensure the continued existence of FutureLearn, despite its “very challenging financial position”. He also pointed out that GUS was “not new to running online education businesses” and could add experience and expertise that could steer FutureLearn “to a place of financial viability and sustainability”.
But, he said, they would have to do this with a “much reduced team” because FutureLearn has recently been laying off large numbers of its staff and the deal could also prompt existing university partners to consider whether to continue their arrangements with FutureLearn, given it “might begin to look like a very different proposition in the future”.
After originally launching in partnership with 12 universities in 2012, FutureLearn currently provides services to more than 260 universities, brands and government departments.
It has tried to diversify its offering to include degrees, microcredentials and business-focused training but struggled to convince universities to invest in its longer courses.
Online learning platforms Udacity and Coursera have also recently announced plans to make redundancies, prompting some to speculate that the “bubble has burst” on the edtech sector’s rapid expansion.
Following confirmation of GUS' takeover of FutureLearn, the company installed former universities minister Lord Johnson of Marylebone as new chair of the board of directors. A new advisory board was also announced, chaired by former Labour education secretary Lord Blunkett of Brightside alongside former Quality Assurance Agency chief executive Douglas Blackstock, with further appointments to follow.
