The Learning House, an online program management company, is acquiring Carnegie Mellon University spinoff Acatar in a bid to be more competitive among prestigious universities.
The acquisition, the terms of which were not disclosed, joins two companies that have taken different approaches to the online education market. One is big, established and offers a comprehensive set of services; the other, small, recent and specializes in a handful of functions.
Todd Zipper, CEO of the Learning House, said the acquisition represents a “new arrow in our quiver” to target prestigious institutions. The company mostly serves small- and medium-sized colleges and universities, he said.
“When you talk to elite universities, R1 universities, they are interested in your platform and how you work with faculty,” Zipper said. “At the end of the day, elite universities want to provide a high-end product. They want Hollywood-like production, animation. These are things that Acatar can facilitate.”
Colleges and universities partner with enabler companies -- sometimes at the cost of half their online tuition revenue -- in return for more than just help with moving their courses online. Some institutions rely on outside firms to handle services such as marketing, enrollment and student support, among others.
Unlike most other companies in the space, Acatar has taken a more technical approach. The start-up spun off from Carnegie Mellon in 2012. Since then, the 13-person team has focused almost exclusively on the course development process -- taking a professor’s course and his or her personal strengths as an instructor and translating them to a digital setting -- and building its online education platform.
The Learning House, in comparison, has been around since 2001 and employs nearly 300 people. The company can handle faculty development, lead generation, technical support and a host of other services, but it doesn’t have its own platform. Not every college or university needs a new platform to run online courses -- they can use their existing learning management systems -- but for those that do, the Learning House offers an instance of the open-source Moodle platform.
The different strategies have produced different client bases. While the Learning House targets an institution’s entire online degree offerings, working on an average of 15 programs per partner, Acatar’s promotional material stresses individual courses and a “faculty-centric” approach.
The Learning House’s average client, Zipper said, is a regional nonprofit with about 1,000 to 5,000 full-time students and some experience in the adult learner market. Maybe it has a long-running education or nursing program, but few -- if any -- programs offered online. Now the university has “hit a wall.” Its traditional student population has stopped growing, but the university can’t raise tuition, he said. The company works with about 75 institutions in total.
Acatar’s list of partners is smaller in numbers but includes big names. The company has worked with the University of Notre Dame, the Marshall School of Business at the University of Southern California and parent institution Carnegie Mellon, among others.
From now on, when the Learning House responds to requests for proposals from those and other elite institutions, Zipper said, “We are going to lead with Acatar.” He did not view the acquisition as the Learning House creating a presence in the learning management system market, however.
"I shouldn’t say never, but we are unlikely to ever be in the LMS game," Zipper said.
The Learning House expects to sign at least two elite universities a year as a result of the acquisition, according to a spokeswoman.
Matthew H. Cooper, CEO of Acatar, said he didn’t think the start-up’s decision not to be a comprehensive service provider served as a “disqualifier” in competitive bidding situations, but added that being able to offer both a platform and a full suite of services is “going to simplify the conversation considerably.”
He added, “If somebody was looking for a company that offered services and a best-in-class platform, I think we can now say that.”
The Learning House will keep the Acatar team in Pittsburgh, giving them additional resources to improve the platform, Cooper said. The platform is now a product of the Learning House, said Zipper, adding that he expects a new version should be released in six to nine months.