Bridgepoint Education is getting a makeover. This week, the publicly traded owner of online for-profit Ashford University and provider of online program management services announced a new name, new headquarters and new acquisition.
Now called Zovio, the company has bought Los Angeles-based TutorMe, a provider of online tutoring services that connects students with experts for live, one-on-one sessions. According to a U.S. Securities and Exchange Commission filing, Zovio has agreed to pay $2.79 million in cash and about 310,000 shares of the company’s common stock as part of the deal.
The deal also includes Zovio paying $1.05 million in cash as a transaction bonus to certain TutorMe service providers and about 294,000 performance-based restricted stock units to certain continuing service providers.
Founded in 2015, TutorMe claims hundreds of thousands of students in the U.S. and Canada use its platform for 300 subjects. Students can pay on a per-minute basis, or as a monthly subscription that ranges from $39 to $119 per month. The company also claims it has worked with 800 schools to make its service available to students.
Per the terms of the deal, which is expected to close later this month, TutorMe will maintain its brand and operating model. This acquisition is the latest in a series of changes for the company formerly known as Bridgepoint Education, which was founded in 1999 as TeleUniversity. Less than a month ago, it bought Fullstack Academy, a coding bootcamp.
These moves are part of a broader shift for Bridgepoint, which built its brand around for-profit online university Ashford University. In recent years, those names have been associated with scrutiny, as the company has been under investigation and litigation over allegations of misleading marketing practices.
Zovio explained its new name as a reflection of its “strategy and transformation to an education technology services company.” Its previous ticker, BPI, will cease on April 12, according to a regulatory filing. Replacing it is ZVO, which will go live on Nasdaq on April 15.
The Fullstack and TutorMe deals align with Zovio’s desire to shift from solely operating its own university to becoming an online program manager (OPM) that works with other schools to create online offerings, according to Trace Urdan, a managing director at advisory firm Tyton Partners. He says the online tutoring platform is a novel service Zovio can use to pitch its OPM business to potential university partners.
Efforts are also underway by Zovio to convert Ashford into a nonprofit institution, separate from Zovio. That process is awaiting regulatory approval.
Other operators of for-profit, online universities have been making similar moves. Last summer, for-profit Grand Canyon Education spun off Grand Canyon University as a separate nonprofit. Later that year, Grand Canyon Education acquired Orbis Education to expand into the OPM market.
For Zovio, having coding bootcamp and tutoring services under its belt offers “a way to distinguish themselves” from a crowded market of OPM providers, Urdan says. He sees an opportunity for Zovio to focus on undergraduate programs that are underserved by existing OPM companies.
Zovio will also move its headquarters from San Diego to Chandler, Ariz. The move will relocate about 800 jobs and be finalized in the next 18 to 24 months. The company will maintain a presence in San Diego, Denver and Clinton, Iowa.
