The price of a university degree in most English-speaking countries has very little to do with the cost of delivering the educational content. The content cost — faculty time, curriculum development, learning management infrastructure — is a fraction of total institutional expenditure. The rest is the bundle: campus facilities, student services, administrative overhead, and most importantly, the regulatory and reputational scaffolding that allows the institution to grant a credential that labour markets will recognise. The accreditation system is the mechanism that controls access to that scaffolding. And because accreditation is granted by national bodies under strict criteria, incumbents face almost no competitive threat from new providers who might deliver equivalent or superior educational content at a fraction of the cost.
In New Zealand, tertiary education is regulated by the New Zealand Qualifications Authority. NZQA approves providers, registers programmes, and maintains the New Zealand Qualifications Framework — the framework that determines which qualifications carry what recognition in the labour market. An online course that teaches the same skills as a NZQA-registered programme but is not registered on the NQF is, from the employer's perspective, a development activity with no formal status. In Australia, the comparable system is TEQSA for higher education and ASQA for VET. The cumulative effect of these regulatory frameworks is that market entry for a new accredited provider is measured in years, not months, and the compliance overhead is substantial enough that most EdTech companies serving the higher education market do so as platform suppliers rather than as degree-granting institutions.
The investment opportunity we find interesting is in what you might call accreditation infrastructure — companies that help existing accredited institutions extend their reach, or that create legal and regulatory structures through which new online providers can access accreditation without building the full institutional apparatus from scratch. Woolf, which we backed in 2024, is the clearest example of this model: they operate as a regionally-accredited university in a jurisdiction that permits a distributed college model, allowing online education providers to affiliate with Woolf and grant degrees under Woolf's accreditation umbrella. That's a fundamentally different business model than selling an LMS to a university. It's building the regulatory infrastructure that other providers depend on.
We should be careful about how we characterise the accreditation system. It is not simply a rent-seeking cartel protecting incumbent institutions. The system exists because credential recognition is a genuine public good — employers, graduate schools, immigration authorities, and professional bodies all need a common reference frame for evaluating qualifications. Abolishing the accreditation system would not benefit most learners; it would create a market in which unscrupulous providers could issue worthless credentials and unsophisticated learners could be misled into paying for education with no labour market value. The challenge is not to undermine accreditation but to find mechanisms that allow the infrastructure of credential recognition to extend to new delivery models and new institutional configurations at lower cost and with less time lag.
The companies that solve this problem well will have an enormous total addressable market, because the global demand for post-secondary education from people who cannot access residential campus programmes — due to cost, location, work commitments, or caregiving responsibilities — is very large and very underserved. Distance between learner and institution is no longer the primary constraint; the primary constraint is the accreditation and credential recognition system that makes a qualification legible to the people who need to evaluate it. The founders building in this space need both technical and regulatory sophistication — it is probably the highest-compliance founder environment in EdTech, which means it's also the most defensible once you've navigated it.