Online education company TutorVista renowned for providing quality online tutoring to students across the world is in talks of being sold, in part or in full, by its parent firm, publishing and education giant Pearson. While Pearson India remarked that it had “no comments to offer”, two executives aware of the development said that an investment bank representing Pearson had approached them, in a similar fashion, with a proposal to sell one of the divisions of TutorVista- although not specifying which unit was up for sale. One of the sources is a senior executive with a publishing firm and the other a founder of an education-technology company.
“(TutorVista’s) revenues are down significantly and it is being sold at a fraction of what it was sold to Pearson,” the publishing firm executive mentioned.
One of the flag-bearers of the education industry TutorVista’s acquisition was completed in 2013 and started in 2005 by founders of GrowthStory, Krishna Ganesh and Meena Ganesh. As an addition to online tutoring, TutorVista caters to a large array of educational needs including the likes of test preparation services, homework assistance, supplementary tutoring and even customized-expert tutorials before tests and exams.
Krishna Ganesh mentioned that the holding company of TutorVista had multiple businesses with specialized arms for consumer and business markets on the internet; a BRB online business specifically aimed at the United States; and schools and tutorial businesses exclusive to India.
“The value of business was five different businesses added together,” said Ganesh. “Some of the businesses are relevant in terms of long term business and some of them are of less interest to them. The direct-to-consumer business in the US, which is a small portion of TutorVista, maybe on sale,” he remarked.
Former owner of the FT Group and The Economist, UK-based Pearson acquired a 17% stake in TutorVista only in 2009 and purchased another 59% in January 2011 for a whopping 577 crore. It later gained its controlling stake to 80% and finally acquired the entirety in 2013.
Naganand Doraswamy who is a managing director in Ideaspring Capital commented “There are many instances where people have bought other companies but they have seen that it is not a fit culturally or from a business perspective. So in that case they feel it is better to fork it out to somebody else who can make better use of the product. This is not something uncommon, it just means that there is a misfit somewhere. TutorVista was bought some time ago. Technology would have changed, the (business) model would have changed; hence there will be multiple different reasons for this.”