Noodle Partners raises $4 million to help colleges deliver degrees online

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Noodle Partners Inc., a new education venture from the founder of The Princeton Review and 2U Inc., John Katzman, has raised $4 million in venture funding to help colleges and universities deliver high-quality certificate and degree programs online.

Philadelphia-based Osage Venture Partners led the investment in Noodle Partners and was joined by New Markets Venture Partners, 500 Startups and others.

Katzman tells TechCrunch that the challenge in delivering online education at the college and university level has changed dramatically over the last decade, and not just because of the rise of smartphones.

“People did not believe that higher ed could be as good online as a campus-based program. That’s because the first wave was full of for-profits that were just not very good schools. Today, there are many great schools online and we know the problem is not the medium. The new challenge is building and offering programs that are great, but also lower the cost of higher education,” Katzman said in 2008, when he co-founded 2U Inc. with Chip Paucek and Jeremy Johnson.

Trump University, and the University of Phoenix (owned by Apollo Education) are two famous examples of unscrupulous, for-profit online schools in that earlier wave. These organizations sold students on useless degrees and costly seminars that would leave them more in debt than anything else.

College enrollment in the U.S. has declined for five straight years, according to the most recent available data from the National Center for Education Statistics. That correlates with a 34% increase in the cost for undergraduate tuition, fees, room, and board at public colleges and universities, and a 25% increase at private non-profit institutions between 2004 and 2014.

Katzman believes that offering more of their degree programs online, and at a higher quality than ever before, will help colleges reverse that trend.

New York-based Noodle Partners offers colleges and universities help setting up an online degree program, instructional design for courses within the program, recruiting, tech support, and measuring student engagement along the way to course completion. The startup charges for setup and a flat fee per student.

Other companies doing this work (called “online program management”) will typically take a large percent of tuition they help schools generate from their online offerings, cutting into the school’s already challenged margins.

Competitors to Noodle Partners include 2U, the company Katzman started but with which he is no longer affiliated, Academic Partnerships, HotChalk, Keypath, Pearson Embanet, Wiley Education Solution and others.

Osage Venture Partners’ Nate Lentz said he backed Noodle Partners believing, “Something needs to change the cost curve in higher ed.”

The investor expects Noodle Partners to use its funding to roll out its OPM services and technology to top colleges and universities in the U.S., and expand enrollment in online programs at the schools where the company is already working today.

Featured Image: Prasit Rodphan/Shutterstock