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

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

Pandemic learning loss is real and kids need help to catch up, education experts say | CBC NewsEvery summer, children forget some of what they learned during the previous school year, but now experts are warning that because of school closures and other disruptions during the pandemic, students will have a lot more lost learning to make up for.

(Reed, 2021)

What Parents Should Know About The Drop In Kids' Test Scores During The PandemicYes, kids are behind, and the most vulnerable were hit hardest. But we now have more evidence that schools work, and they can help all kids recover.

(Holmes, 2022)

6 things we've learned about how the pandemic disrupted learningAs a third pandemic school year draws to a close, new research offers the clearest accounting yet of the pandemic's academic toll.

(Turner, 2022)

From the Cover: Learning loss due to school closures during the COVID-19 pandemicSchool closures have been a common tool in the battle against COVID-19. Yet, their costs and benefits remain insufficiently known. We use a natural experiment that occurred as national examinations in The Netherlands took place before and after lockdown ...

(Engzell, Frey & Verhagen, 2021).

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)
- Clark county: 375 public schools serving 315,646 students.
- Florida Hillsborough: 311 public schools serving 218,505 students.
Other clients include
- Chicago's Franklin Park District
- Val Verde USB

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.

Ontario Launches Largest Tutoring Support Program. Highest Investment in Learning Recovery, Mental Health & Public Education.
(Government of Ontario, October 2022)

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

Ayoub, S. (2021, November 21). The race to ace: how mass tutoring risks children’s mental health and entrenching inequality. The Guardian. https://www.theguardian.com/australia-news/2021/nov/22/the-race-to-ace-how-mass-tutoring-risks-childrens-mental-health-and-entrenching-inequality
Clark County School District. (2022). Public School Review. Retrieved from https://www.publicschoolreview.com/nevada/clark-county-school-district/3200060-school-district
DeClerq, K. (2022, September 23). Ontario boosts funding for parent direct payments, but details still sparse. CTV News Toronto. Retrieved from https://toronto.ctvnews.ca/ontario-boosts-funding-for-parent-direct-payments-but-details-still-sparse-1.6081379
Engzell, P., Frey, A., & Verhagen, M. D. (2021). Learning loss due to school closures during the COVID-19 pandemic. Proceedings of the National Academy of Sciences, 118(17). https://doi.org/10.1073/pnas.2022376118
Global Private Tutoring Industry. (2022, October). ReportLinker. Retrieved from https://www.reportlinker.com/p0552740/Private-Tutoring-Industry.html
Hillsborough School District. (2022). Public School Review. Retrieved from https://www.publicschoolreview.com/nevada/clark-county-school-district/3200060-school-district
Holmes, M. (2022, September 23). What parents should know about the drop in kids' test scores during the pandemic. HuffPost. Retrieved from https://www.huffpost.com/entry/test-scores-kids-covid-pandemic_l_632c7182e4b0572027b04c55
Mascarenhas, N. (2021, July 1). Paper gets $100M worth of venture-backed paper for B2B edtech. TechCrunch. Retrieved from https://techcrunch.com/2021/07/01/paper-series-c-ivp/
Ontario Launches Largest Tutoring Support Program. (2022, February 16). Government of Ontario News Release. https://news.ontario.ca/en/release/1001623/ontario-launches-largest-tutoring-support-program
Polaris Market Research (2022, April). Private Tutoring Market Size Global Report, 2022 - 2030. https://www.polarismarketresearch.com/industry-analysis/private-tutoring-market
Reed, A. (2021, October 18). Pandemic learning loss is real and kids need help to catch up, education experts say. CBCnews. Retrieved from https://www.cbc.ca/news/canada/toronto/learning-loss-covid19-1.6214714
Rogers, B. (2021, July 1). Phil Cutler builds paper to democratise private tutoring-lands $100 million series C financing. Forbes. Retrieved from https://www.forbes.com/sites/brucerogers/2021/07/01/phil-cutler-builds-paper-to-democratise-private-tutoring-market/
Simpson, M. (2022, February 15). Paper secures $343 million CAD with US schools drawn to its remote tutoring tech. BetaKit. Retrieved from https://betakit.com/paper-secures-343-million-cad-with-us-schools-drawn-to-its-remote-tutoring-tech/
Turner, C. (2022, June 22). 6 things we've learned about how the pandemic disrupted learning. NPR. Retrieved from https://www.npr.org/2022/06/22/1105970186/pandemic-learning-loss-findings

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