Inside Higher Ed: What Private Equity Needs to Know
Insights from inside one of America’s top public universities on how value is created—and misunderstood—in higher education.
The Misread: Universities Aren’t Businesses in Waiting
Suffice to say, higher education doesn’t operate on the same incentives as the private sector—not by a long shot. Universities balance multiple bottom lines—academic excellence, social mission, public accountability and financial stability.
Every department and program, even the unprofitable ones, carries symbolic weight tied to reputation, rankings and donor confidence. That means the “efficiency play” rarely works. Cutting low-margin programs can actually damage the brand capital that sustains philanthropic giving and student demand. Shared governance, accreditation and regulatory compliance make direct interventions slow, public and politically charged—especially in today’s environment which has reached a crisis pitch.
You can’t just “turn around” a university. You must understand its internal logic and who the major players are in decision-making.
The Real Play: Own the University Ecosystem, Not the Institution
Smart investors are buying what universities rely on: tech partners. It’s a sector ripe for private equity investment. For-profit and non-profit higher ed are sustained by a vast, fragmented vendor network of EdTech platforms.
These partners deliver digital learning and analytics; marketing and enrollment CRMs; financial and student success systems; marketing automation solutions and much more. In addition, evolving Online Program Managers (OPMs such as 2U , Everspring Online Learning , Academic Partnerships , Pearson , etc.) are shifting toward fee-for-service models as they come under greater scrutiny and face potential government regulation.
These vendors face their own growth constraints—long procurement cycles and mission-driven customers—but they also enjoy resilience and recurring revenue. When universities can’t move fast internally, they rely on partners who can.
That’s where private capital creates real leverage, not storming the Ivory Tower Don Quixote-style, but investing in the scaffolding around the Ivory Tower.
Some of the largest private equity deals in the higher education and related EdTech space recently (primarily 2023-2025) include:
These multi-billion-dollar transactions primarily involve companies that provide technology, software, and support services to educational institutions, rather than the direct acquisition of traditional universities. By comparison of scale, the largest proposed purchase of a for-profit university was the University of Idaho's planned acquisition of the University of Phoenix for $685 million, but the two institutions agreed to terminate the deal in June 2025.
Multi-billion-dollar private equity deals in the EdTech space range between 2X-8X larger than buying an entire university.
According to a recent report by ECA Partners: “The global education sector, valued at nearly $10 trillion, has evolved from a traditionally philanthropic space into one of the most dynamic investment frontiers for private equity. As we move through 2025, education has become a compelling asset class offering strong returns, long-term stability, and global scalability. Education investment trends are driving change.”
This latest trend indicates an increasingly strong investor interest in EdTech and related service providers, driven by increased digitalization and the need for efficient, scalable learning and administrative solutions.
A report by Global Services in Education calls higher education “the next frontier for private equity” and notes that EdTech is no longer a startup game: “EdTech firms have matured beyond experimental apps. Investors are now backing platforms that integrate with traditional schools to personalise learning, enhance assessment, and reduce operational overheads. The hybrid model of 'clicks + bricks' is here to stay.”
The Gatekeepers: Navigating University Procurement
Over my past 25 years at the University of California, Davis - Graduate School of Management , I’ve led multiple RFPs and vendor evaluations across marketing, communications and digital engagement, navigating one of the most complex procurement systems in higher education. Our third-party needs are driven by a lack of in-house expertise, inability to build internal custom solutions quick enough, and existing solutions that are better suited and proven industry best practices. Nothing unusual here. These are very common reasons to pursue third-party EdTech solutions.
Each deal is a balancing act and byzantine maze: compliance, IT, finance, security standards and academic mission all must align. It’s not always just about lowest cost, it’s about quality service, trust and fit. This process frustrates vendors and their investors alike. But those who respect it—who design flexible, compliant and transparent solutions—succeed and become embedded partners in the academic mission. Navigating procurement isn’t a bureaucratic hurdle; it’s a competitive moat. If you can make it through the process, you’ve already proven your staying power.
The Analyst’s Blind Spot: Asking the Wrong Questions
When diligence teams engage education experts, they often ask: “Which universities are growing fastest?” or “Which vendors have the best tech?" Those are surface-level questions.
The real insight lies deeper—in understanding how decisions are made and who controls the purse strings. In higher ed, budget authority and vendor selection are often decentralized. While large contracts are common for standardization and cost-savings at the university and systemwide levels (e.g. Adobe , Salesforce , Slate , Google , Microsoft , Amazon Web Services (AWS) , etc.), meanwhile the schools, colleges, centers, research labs and other units within the university are seeking vendors for a plethora of more customized needs—including GenAI solutions.
Not surprisingly, the red-hot AI sector has its eyes on higher ed. “As generative AI tools become more embedded in standard applications, investors are looking for companies that can effectively implement these technologies in educational settings,” the ECA Partners report said.
Procurement timelines are tied to student recruitment cycles, grant awards, governance and fiscal/academic calendars. Reputation risk can outweigh ROI. Regulation quietly shapes every market move even at private institutions.
The most valuable expert insight isn’t about market share—it’s about decision logic. Investors who grasp that see opportunities others miss.
The Takeaway: Translators Will Win the Future
Although higher education is facing many external challenges, it isn’t broken. It’s just built differently. It rewards patience, credibility and alignment with mission.
The future belongs to translators: people and firms who can interpret institutional culture for investors, and investor logic for institutions. Those who can bridge that gap—who can navigate the system rather than fight it—will unlock enormous, sustainable value in one of the most resilient sectors that drives the global economy.
About the Author
Timothy Akin is Executive Director of Marketing and Communications at the University of California, Davis - Graduate School of Management . He has led marketing strategy, brand development and vendor procurement within one of the nation’s top public university systems. His expertise spans higher education economics, brand equity, enrollment strategy, and institutional decision-making. He advises investors, consulting firms, and expert networks seeking to understand the dynamics of shaping the higher education sector. Prior to joining UC Davis, Akin served as the marketing manager for Paul Kagan and Associates, a global financial analysis and consulting firm focused on public media companies, serving institutional investors and industry insiders.
Engagement and Availability
Available for due diligence interviews, project-based consulting, and advisory discussions through leading expert networks including ProSapient, GLG, AlphaSights, Guidepoint, and Third Bridge. Typical engagement formats include investor diligence calls, market landscape analysis and vendor ecosystem evaluation.
Insightful post that goes past the clichés & asks the right question: Does the Capital align with Higher-Ed’s mission & expected outcomes? Worth reading for anyone thinking about investments and potential impact in higher ed.
Universities aren’t broken; they’re mismanaged. EdTech and private capital can optimize systems, but if institutions aren’t delivering real ROI and career outcomes for students, all the “translation” in the world won’t fix the problem. Accountability starts with results, not processes.
This is a very interesting and well written article, thank you for your insights Tim Akin ! I am currently working on a thesis on private investment in higher education and would love to ask you some questions on this subject when you are available.
Very nice article, Tim Akin!
Excellent article, Tim! I am impressed with your deep knowledge of the complexity of higher education.