Business of teaching the world attracts investors, students alike

Business of teaching the world attracts investors, students alike
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First Published: Sat, Mar 17 2007. 01 00 AM IST
Updated: Sat, Mar 17 2007. 01 00 AM IST
Bangalore: Scorecard of the class 12 examinations, which her daughter is appearing for, is not the only one that Neeta Chaturvedi will track this summer. The 43-year-old maths tutor from Noida, a Delhi suburb, is keeping an eye out for the end-of-term school grades to be announced in Australia, the UK and the US. And it’s not out of mere academic interest.
Chaturvedi logs on to her computer at 4am every day to impart lessons in algebra, geometry and arithmetic to students in the US. As her day progresses, students from grade 5 to grade 9 in Australia and the UK hear and watch her teaching online.
“I am anxious to know how they fared,” she says.
Chaturvedi is among the 25 teachers employed by e-tutoring start-up Vienova, which currently provides online tutoring services to 100 overseas students. “By the end of 2007, we expect our customer base to grow to 2,000 students,” says Parikshit Jain, who raised capital from the Delhi-based angel investment group, Band of Angels, to launch Vienova around the end of last year.
Jain is part of a growing band of entrepreneurs building businesses that offer online education services from India.
Education Market Research, an agency that tracks education services in the US, estimates the ‘K-12 market’—kindergarten to grade 12—that includes both online and offline tutoring services, is valued at $2.2 billion (Rs9,680 crore).
The market is growing fast—doubling, according to some industry insiders—after a federal government mandate that state-funded schools in the US should have no failures by 2014.
Tutors in the US charge as high as $40 per one-hour session, while e-tutoring companies based in India offer college-level tutors like Chaturvedi at rates ranging from $7 to $10 an hour—one reason why parents and school authorities, keen to raise academic standards, are looking at online tutoring models.
Start-ups in India are using a variety of business models to reach this growing customer base. In Chandigarh, Harman Singh, founder of AuthorGen Technologies which builds software that e-tutoring companies use to link students with tutors online, is now keen to enter the business directly.
This month, AuthorGen will launch a beta version of an online portal that enables e-tutoring services that links students from anywhere in the world with a tutor of their choice listed on “A student in India can pick a tutor in Argentina based on the profile we list on our portal,” says Singh. Students pay no fee to WiZiQ while the tutors have to share a percentage of their earnings with the portal.
Venture funds think the global market for e-tutoring is large enough to accommodate start-ups. “I think there is a fairly serious opportunity in e-tutoring, large enough for Indian companies to not have to unnecessarily quote low prices to gain business,” says Saurabh Srivastava, chairman of Indian Venture Capital Association, who is helping two such start-ups.
Typically, e-tutoring start-ups that focus on overseas markets have to factor in the cost of customer acquisition, estimated to be close to 80% of the project cost. “As this is an end-retail customer business, building a brand will cost between $10 million and $15 million over a five-year time frame,” says Vienova’s Jain.
In 2006, Bangalore-based Tutor Vista raised $12.75 million in two rounds of funding from Sequoia Capital and Lightspeed and now has a customer base of 2,200 students spread across the US and the UK. HeyMath, an online math-learning website launched by Sankhyaa Learning in Chennai, also focuses on students in US, Singapore and, increasingly, in India.
The India focus is increasingly seen at e-tutoring companies that want to build a scalable business model. Educomp, a Delhi-based e-learning company that has built a robust overseas business, is now looking to address the Indian market with their specialized portal,
“The challenge for e-learning businesses that address the retail consumer is to make sure that they get a large enough base of customers at the right price,” says Rishi Navani, founder partner of Matrix Partners, a  $150 million fund that invests in consumer-led businesses in India.
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First Published: Sat, Mar 17 2007. 01 00 AM IST
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