The Online Education Boom: Why It’s the Best Business to Own
If you’re looking for a business model with low overhead, recurring revenue, and virtually unlimited scalability, look no further than online education. The sector is projected to grow to $370 billion by 2026, making it one of the fastest-growing and most lucrative industries in the world. Unlike traditional education, which is limited by faculty availability and classroom size, online education scales like a tech company. Whether you’re offering a single course or a full degree, your cost to service doesn’t grow at the same pace as your revenue. That’s a recipe for serious margin. Online education businesses often sell for 5 to 10 times EBITDA, thanks to their recurring tuition revenue and high demand from job seekers eager to reskill or upskill.
Dr. Robert Eler points out three dominant trends reshaping the industry: breadth, depth, and interactivity. Breadth refers to the expansion of course offerings—including classes once thought impossible to teach online, like science labs. These are now taught using home experiment kits and virtual tools. Depth has become a major theme too, with private universities now offering full degree programs through online platforms. And when it comes to interactivity, seminar-style formats with breakout rooms and live discussions are bringing back the engagement students missed during early, passive e-learning models. Hybrid learning is also gaining momentum. Post-pandemic, many students prefer the flexibility of online education with occasional in-person meetups to build community and enhance retention.
Maximizing the value of an online education business means addressing student engagement and building smart partnerships. Motivation is one of the biggest challenges—42% of online students struggle to stay focused. That’s where strategies like daily check-ins, interactive assignments, and routine communications come in. These small touches create accountability and help students complete courses. Growth also comes from partnerships. Tapping into networks of local schools, churches, municipalities, and businesses generates word-of-mouth referrals and builds community credibility without expensive advertising. And critically, online education businesses should adopt an online-first strategy. Brick-and-mortar learning centers, if used at all, should function more like fulfillment hubs—enhancing the digital model rather than replacing it. Think Amazon, not your local library.
Historically, education was seen as a public good, not a business. Universities were founded by philanthropists and viewed as a way for community leaders to give back. But today, higher education has evolved into a financial juggernaut. Many universities are among the largest landowners in their regions, with multi-billion-dollar endowments. It’s a wake-up call: education is no longer just about altruism—it’s big business. By removing the barriers of real estate and faculty limits, online education platforms are unlocking the next generation of opportunity in the learning economy.
And let’s not forget one of the most fascinating dynamics in education as a business: students are willing to pay more for prestige while hoping to exert less effort. It’s one of the few industries where the customer’s goal is to pay top dollar for the easiest possible path to a respected credential. That blend of high perceived value, minimal cost to serve, and recurring income makes online education the “holy grail” of business models, as Baratodia described it.
Whether you’re an entrepreneur, investor, or education executive, the lesson is clear: now is the time to scale into online education. The audience is global, the infrastructure is digital, and the margins are real. It’s not just the future of learning—it’s the future of smart business.
