The financial difficulties faced by some of the original massive open online course (Mooc) providers show the “bubble may have burst” on the rapid expansion of the education technology sector in the face of increased competition and a harsher economic climate, according to commentators.
FutureLearn has announced plans to “significantly reduce expenditure” following losses of ?13.2?million in 2019-20, while the Open University – which has invested in the company since its inception in 2012 – has announced plans to sell its 50?per cent stake.
Neil Mosley, a digital education consultant, said the proliferation of online courses and platforms in recent years has cut Moocs’ enrolments from the thousands to the hundreds, with many of the big players seeing reduced financial returns as a result.
In response, FutureLearn attempted to diversify its offering away from Moocs to include degrees, microcredentials and business-focused training in a bid to become financially viable, but US competitors such as Coursera have been more successful, Mr Mosley explained.
“Very few UK universities have been willing or able to come with them on that journey by developing credit-bearing longer courses, as that wasn’t the basis for the majority of partnerships,” he said, pointing out that the many UK universities that have partnered with FutureLearn have “barely increased their course portfolios in recent years, and in some cases they have shrunk”.
Mr Mosley said FutureLearn’s efforts to find a viable business model had also been impacted by the departure of several “talented and long-serving” members of staff in recent years and, combined with the wider challenges in the online education environment, it now faces a “kind of perfect storm”.
“There are persistent rumours that much bigger companies are looking to offload the online education part of their business, and it simply doesn’t feel like the best time to be looking for an investor in an online education company that has yet to prove it can be financially sustainable,” he added.
Beyond FutureLearn’s troubles, US-based online learning platform Udacity has announced 55 redundancies and the departure of its executive chair, Gabe Dalporto, with founder Sebastian Thrun resuming control of the day-to-day running of the company.
Ben Williamson, chancellor’s fellow in the Centre for Research in Digital Education at the University of Edinburgh, agreed that the Mooc market “appears to?be on a drastic downturn”.
Although he was not familiar with FutureLearn’s specific circumstances, he said the “large financial rewards” garnered from the shift to remote learning during the pandemic appeared to be drying up for edtech firms and the “bubble now seems to be bursting”.
He said FutureLearn would likely need another big private investor to join Australia’s Seek group – which already owns 50?per cent of the company – to save?it.
But Simon Nelson, chief executive of FutureLearn until 2020, was more positive about the company’s future.
He said the market factors that had led to the creation of the company were still present, including the demand for quality higher education in developing countries, significant skills gaps in most global economies and the fact that many online courses do “little more than try to replicate classroom-based models on the web”.
Despite the difficulties Moocs currently face, they are “well positioned to deliver on critical initiatives that represent the future of education – lifelong learning allowances, microcredentials, stackable and flexible qualifications”, he said.
The increasing need for “sophisticated online pedagogic models” – especially given the context of the rising cost of living – and opportunities presented by the opening up of new markets mean “there remains scope for FutureLearn to thrive in these areas”, said Mr Nelson, chief executive of QA?Higher Education.
