2U’s Upcoming IPO: Filing estimates $533 million company value

One month ago 2U filed its registration for an IPO in 2014. 2U is an online service provider that helps traditional universities develop fully-online programs, currently based on 9 customers at the master’s level (see here for summary of revenue per student and per customer). On Monday the company set the terms for the IPO, as described by Bill Flook in the Washington Business Journal.

2U Inc. on Monday set terms for its upcoming initial public offering. The Landover-based ed-tech company plans to sell 8 million shares at between $11 to $13 apiece. Selling stockholders plan to offload another 1.17 million shares in the offering.

Altogether, the IPO would raise a total $110 million, assuming the 2U prices at the mid-point of that range. The company plans to list on the Nasdaq under the ticker symbol “TWOU.”

The updated S-1 filing is here. Based on the document and per Nasdaq, the company would be worth $533 million if it hits the midpoint of pricing at $12 per share. As a reminder, the company currently makes $83 million in revenue at a loss of $28 million, with almost a 50% per year revenue growth rate.

2U financials

 

With all of the recent investment in ed tech, especially since 2010, I would expect more examples of investors looking to get payoff via IPO or via corporate acquisition. The 2U IPO will be a real bellwether on how well the market will value ed tech companies, especially after Chegg’s disappointing IPO and subsequent trading.

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About Phil Hill

Phil is a consultant and industry analyst covering the educational technology market primarily for higher education. He has written for e-Literate since Aug 2011. For a more complete biography, view his profile page.
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