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January 14, 2007

Bangalore-based tutor startup striving for head of the class

By Becky Bergman

From the get-go, founder Krishnan Ganesh believed his online company, TutorVista Global, had the potential to change the U.S. education industry, one student at a time.

For a $100 monthly subscription fee, the Bangalore-based startup gives students, ranging from kindergartners to middle-aged execs, unlimited access to an assigned tutor.

Students and instructors talk to each other in real-time by using instant messaging, Webcast technology and an erasable "white board" function.

The entrepreneur says his lesson plan for successful learning will revolutionize the $15 billion U.S. and U.K. tutoring market.

In the process, TutorVista has also joined a growing list of Indian startups helping Silicon Valley investors unearth a new gold rush halfway around the globe.

Ganesh says many families can't afford between $40 to $65 per hour -- which most private providers and giant tutoring companies charge in the U.S. As a result, many children who need one-on-one instruction go without.

And while the federal No Child Left Behind Act upped the standard on what students should know at certain milestones, it hasn't made tutoring any less expensive or any easier to attain, according to Ganesh.

In fact, a 2006 government report shows that just 226,000 students, only 11 percent of the nearly 2 million students eligible for federally-funded tutoring under the No Child Left Behind law, actually received it during the 2003-2004 school year, the most recent figures available.

To help ease the burden, Ganesh's company announced recently it would provide free tutoring to kids in the 10 poorest rural counties in the U.S.

Ash Lilani, head of SVB Global -- the international consulting arm of SVB Financial Group in Santa Clara -- applauds Ganesh's efforts.

"He's a terrific CEO with a great vision," says Lilani. "He is making tutoring more efficient and cost effective. He's a bullish leader in the online tutoring space."

But when Ganesh started spelling out all the facts about the education industry to venture capitalists last year during his first fundraising, he admits he was surprised that partners at Sequoia Capital in Menlo Park didn't immediately invest.

Ganesh needed to prove U.S. parents were ready to outsource their children's education. Traditionally, tutoring has been a face-to-face interaction that can occur eight miles away from home, not 8,000.

Sequoia invested $2 million into TutorVista in June 2006 and again last month, along with Lightspeed Venture Partners and SVB Global, bringing the total amount secured to $12.75 million.

Though small change by Silicon Valley standards, the capital was enough to help the company grow to 2,500 students. While it mostly serves the U.S. market, a small percentage of its customers are located in the U.K., Korea, Singapore and Finland.

TutorVista will use the money for possible company acquisitions, to expand its services to include English-language instruction for Asian markets, and add test prep tutoring for SAT-takers, says company president John Stuppy, a former Sylvan Learning Centers exec.

"The funding is a solid endorsement on the company and its efforts to date," says Stuppy, who joined the company late last year. "It proves what we've always seen, which is India is an emerging market with huge potential."

The company is also looking to form partnerships with textbook publishers, schools and universities to package tutoring with educational services and products. It recently announced a deal with MSN Encarta, which will make TutorVista available to its customers through the MSN web portal.

TutorVista says it will also reach 10,000 students by the end of this school year in June and is on track to achieve profitability sometime during the 2007-2008 academic period.

TutorVista says it will keep costs down by continuing to minimize its overhead expenses.

The company is located in a government-sponsored incubator, the Orchid Software Technology Parks, in India. The use of incubators has flourished throughout the country, says Ganesh, who estimates that roughly between 30 and 40 firms in Bangalore are connected with such facilities.

TutorVista has 25 workers on site who handle software and technical duties while its tutors work from home or Internet cafes.

All of its 250 tutors -- retired teachers, stay-at-home moms, experts in a particular field looking to make extra money -- earn between $275 and $300 a week for 40 hours of work and have at least a decade of teaching experience and a master's degree in the primary subject matter they instruct.

The alternative to 10 years of teaching experience is five years and two master degrees, according to Stuppy, who adds that its requirements are more stringent than any state-mandated guideline for tutors.

2007 Silicon Valley/San Jose Business Journal

About TutorVista


TutorVista's mission is to provide world class tutoring and high-quality content to students around the world. TutorVista is the premier online destination for affordable education-anytime, anywhere, in any subject. Students access TutorVista from the convenience of their home or in school and use TutorVista's comprehensive lessons and question bank to master any subject with access to a live tutor around the clock. The TutorVista idea: help students to excel in school and at competitive examinations. The management team consists of professionals from education, training and Internet fields whose expertise spans eLearning, instructional design, technology-based learning, professional services management, and Internet technologies. For more information, go to www.tutorvista.com.