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Will Zovio Succeed with its Realigned Focus on Higher Education Delivery?

22 Dec Will Zovio Succeed with its Realigned Focus on Higher Education Delivery?

TutorMe, a part of Zovio Inc (NASDAQ: ZVO), has been named the best in family-friendly media, products, and services by the The Mom’s Choice Awards® (MCA). The award follows other similar accolades such as HowtoLearn.com’s 2020 Parent and Teacher Choice™ AwardTimmy for Best Tech for Good in LA and a National Parenting Product Award.

TutorMe is a round-the-clock tutoring service that uses video chat, screen sharing and whiteboarding to provide subject matter assistance in over 300 areas in less than 30 seconds. Students can get personalized assistance in any subject, at a time convenient to them, and is an invaluable tool for parents of high-school and college students. The facility is also available for employees who want to get the best out of their employee learning journey. The platform has tutors from institutions of repute such as University Of California, Berkeley, University of Southern California, Massachusetts Institute of Technology, Princeton and Yale.

Myles Hunter TutorMe Co-founder and CEO commented,

“We are thrilled to earn the Mom’s Choice Award Honoring Excellence Seal of Approval. We know all the great things the MCA does to connect consumers, educators, and caregivers with the best products and services available for families.” 

The news follows on the heel of Zovio’s completion of its sale of Ashford University to University of Arizona. Zovio will be providing innovative education technology services to Global Campus, an independent university in affiliation with the University of Arizona, through a long term strategic agreement.

The sale establishes Zovio as a leading education technology services company and will help the Company pursue diversified growth by offering its innovative services to higher education institutions and corporations.

Zovio Inc (NASDAQ: ZVO)

Market Cap: $130.99M; Current Share Price: 4.07 USDChart
Data by YCharts

Education Technology is a burgeoning industry owing to a rise in internet penetration and use of smart phones. There is a growing acceptance of e-learning and many governments are providing impetus to e-learning initiatives. The advancements witnessed in the smart phone technology have revolutionized the delivery of education, with more and more people opting for digitized content. According to a report by EdTechXGlobal, the education technology market will grow by 17 percent per annum to reach $252bn by 2020.

Furthermore a report by Grand View Research estimates that the smart education market will reach $680.1 billion by 2027, growing at a CAGR of 17.9 percent from 182.8 billion in 2019. The emergence of a need for distance learning tools owing to COVID-19 will provide further impetus to the market.

The growth in the market will primarily be driven by population growth, with an estimated 2.7 billion students worldwide by the year 2035. The educational needs of such as large population cannot be addressed through conventional learning institutions, due to scarcity of resources to accommodate such a large population.

These numbers have grown exponentially since the escalation of the pandemic, as educational institutions and even corporate; have been compelled to use e-leaning mediums to continue their operations. In some cases governments are providing encouragement by facilitating the purchase of devices essential for imparting education and knowledge through online learning mediums. In addition, leading educational providers are looking for newer avenues to market their courses and services to a wider audience base worldwide.

As globalization and automation transform the face of the workforce, with a rising number of repetitive low-skilled jobs being automated, employees will need to add to their qualifications and skills. According the report, by 2025, 50 percent of the current jobs will not exist; thereby the demand for re-training will see people resorting to educational technology. The industry witnessed a record fundraising of $1.45 billion in 2018 and has seen the emergence of leaders, with investors concentrating on relatively fewer firms.

Image Source: Company

Zovio uses predictive data and analytics to address learning needs of educational institutions as well as corporations, by offering comprehensive solutions encompassing higher education enrollment, retention, academic and tuition and employee learning, retention and engagement solutions. The Company creates customized learning solution by using data analytics to factor in clients individual experiences. The use of predictive analysis enables the Company to predict and provide reliable outcomes based on past and present courses opted for Zovio was earlier known as Bridgepoint education and has recently completed the sale of Ashford University to the University of Arizona.

The Company is focused on redefining the interaction between faculty and students, by empowering them to streamline feedback and analyze course curriculum, through use of analytics and technology. Zovio offers Faculty Management Systems (FMS) that simplifies the process of faculty on boarding, scheduling, payroll, professional development and faculty credentials along with a Faculty Score Index (FSI), which can track the performance of the team and also help improve faculty performance.

In addition, it can also populate course health dashboards (CHD) that can assimilate student and faculty performance for evaluation of course effectiveness. Furthermore, the Company also provides feedback tools such as Waypoint outcomes that are essential for understanding learning outcomes, student skills and conform to regional and professional accrediting bodies.

Constellation, a digital interactive ADA-Complaint platform, primarily developed for Ashford University, can automatically sync to the cloud and provide access to coursework material and notes, and also suggest pre- and post-test evaluations link for learners in areas of improvement. The Company also runs a technology bootcamp named FullStack Academy and [email protected] that curates courses for professionals based on their specific career goals.

Key Takeaways

  • The sale of Ashford University aids the Company’s transformation into a technology-driven education services company. Ashfords’s University student enrollments have been experiencing a steady decline from 85,000 students in 2011 to 34,700 students in 2019. The updated federal rules resulted in stringent vigilance and monitoring for for-profit educational institutions, which prompted the change of status of Ashford University to Not-for-profit. The divestiture from a heavily regulated industry augurs well for the Company, allowing it to focus on its edutech offerings. The acquisition saw the rebranding of the university into University of Arizona Global Campus (UAGC).
  • Zovio’s strategic agreement allows it to earn 19.5% of revenues, in addition to being reimbursed for providing services such as student recruitment and retention marketing, financial services, and technology support. The agreement is for a period of 15 years, with the initial term being for 7 years and will entail guaranteed revenue of $225 million for UAGC that includes $37.5 million in upfront payment from Zovio.
  • The COVID-19 pandemic has led to schools and colleges being shut down and institutions looking towards online resources to offer their courses. Associated with a brand of repute bolsters the chances of Zovio to make similar strategic arrangements with other institutions that may want a reliable source of innovative, data-driven technology. The Company has added University of Illinois, Colorado State University and Emory University through its FullStack program and is on track to closing the year with 12 partners and acquiring more than 22 to 25 university partners by 2021.
  • The TutorMe platform has proven to be an award-winning remote learning tool for students looking to online options for education during this pandemic. The platform recently landed the Allendale County School District and will provide free online tutoring to over 1150 students. With this the total number of its partners stands at 176, out of which 60 were added during Q3, 2020.
  • Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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