market analysis: tutoring services

The Market Opportunity for Online Tutoring

Forbes

"Private tutoring is a large and fast-growing global trend, representing a $47 billion market in 2020 in the US and expected to reach $218 billion globally by 2027, according to ReportLinker."
(Rogers, B., 2021).

ReportLink

"China, the world's second largest economy, is forecast to reach a projected market size of US$62.4 Billion by the year 2027... Among the other noteworthy geographic markets are Japan and Canada, each forecast to grow at 5.1% and 6.8% respectively over the 2020-2027 period."
(Global Private Tutoring Industry, 2022).

Polaris Market Research (2022)

Post-pandemic effects on schooling and academic learning

  1. Students have experienced learning loss during the pandemic due to a variety of factors. This phenomenon has been widely covered by both academic researchers and news outlets.

  2. Efforts and investment will be needed from governments and educational boards to help students "catch up" to meet local and international standards.

Market Opportunity: Why this Venture?

Investing before an IPO

Paper.co is still a privately-held company. This means that investors that buy in at early stages of the company have the opportunity to make big gains if the company reaches an IPO - Initial Public Offering, to begin to be publicly traded.

Solid growth in staff and revenue

"Today the fast-growing, Montreal-based Paper has over 1,000 professional tutors available on its platform, providing 24/7 services to all grade levels on 200 topics in four languages." (Rogers, 2021)

"Paper grew its staff from 30 employees to 130 employees. It has also grown 40x in revenue over the past two years, which Cutler said is mostly fueled by strong renewals and the network effect within school districts." (Mascarenhas, 2021)

Backed by top VCs

Paper.Co has a very good pedigree when it comes to its investor pool. It has been backed by some of the most well-known and established VCs in Canada, including

  • Birchmere Ventures

  • BDC Capital (< Part of the Pipeline!)

  • Framework Venture Partners

  • Institutional Venture Partners (IVC)

  • Softbank Vision Fund II

  • Sapphire Ventures

  • Salesforce Ventures

  • Bullpen Capital

  • Reach Capital

  • Bullpen Capital

  • Red House Education

(Simpson, 2022)

A growing list of clients

Paper has managed to secure deals with some of the largest US school districts.

  • "Paper is currently working with 350 school districts that span nearly 30 states. But the market opportunity for Paper is huge, with more than 13,000 schools districts in the US alone." (Simpson, 2022)

  • "Paper works with a variety of school districts, ranging from some of the largest – like Clark County in Nevada and Florida’s Hillsborough County – to smaller districts as well." (Simpson, 2022)

  • Other clients include

Ontario funds tutoring

Ontario has unveiled unprecedented investments for tutoring services to help students "catch-up" in their studies after the pandemic. Although most Paper.Co's clients are in the US, the changing landscape in Ontario may allow them expand in the Canadian market.

Post-Pandemic Trends

"Cutler claimed that, pre-pandemic, around 60 percent of school districts in the US were one-to-one with tech devices for students, but by August 2020, that number had risen to 95 percent." (Simpson, 2022).


Market Risks

  • The company faces large and established competitors such as Kaplan, Sylvan and the Princeton review as well as international competitors like Kumon.

  • Competitors are emerging that replace "expert" tutors with peer-to-peer tutoring models, such as Skooli and italky.

  • Instructors and teachers could have reservations about joining tutoring platforms as they often feel this erodes the value of the profession and negatively impacts full-time employment within School districts. (Ayoub, 2021).

  • "But the push toward private tutoring comes with a number of considerations and concerns, namely the further entrenchment of learning inequalities, a lack of regulation, and the effect of all this extra study on a child’s mental health." (Ayoub, 2021).

References