• Zovio, an EdTech services company, announced that it sold its tutoring services business TutorMe, to GoGuardian, a software-as-a-service (SaaS)-based K-12 student security company, for USD 55 million in cash consideration. 

• The company sold TutorMe following the announcement that it was exploring selling parts of its business due to ongoing legal battles that have increased expenditure. Zovio used the sales proceeds to repay USD 31.5 million in debt financing raised in April 2022. The company was fined USD 22.4 million in civil penalties following a lawsuit filed against it in 2017—the plaintiff accused Zovio, the former parent of Ashford University (now known as UAGC), an online college, of misleading students regarding the cost and career opportunities of its educational programs. 

• At a segmental level, Zovio reported that TutorMe and Fullstack Academy recorded combined revenue growth of 29.5% YoY to USD 9.3 million in Q1 2022, while Zovio’s contractual revenue with UAGC had declined 24.9% YoY to USD 52.3 million during the same period. The decline in contractual revenue was mainly attributable to the university’s past afflictions that have resulted in lower levels of student enrollment.  

• GoGuardian is a provider of student security software solutions to help educators identify learning patterns, protect students from harmful and distracting content, and support students at risk of self-harm and suicide. As of November 2020, the company partnered with more than 10,000 schools in the US, covering more than 22 million students.

• Founded in 2004 as Bridgepoint Education, Zovio is an EdTech services company that partners with higher education institutions and employers, using data and analytics to enhance learning experiences and outcomes. The Zovio network includes Fullstack Academy and TutorMe (both acquired in 2019) and Learn@Forbes. For employers, Zovio offers debt-free higher education solutions. Firms can create corporate tuition plans and benefits, providing learning opportunities for their employees.

<ul><li> Analyst QuickTake : Zovio encountered legal woes due to its connection with Ashford University in 2017, which led the company to sell the subsidiary to the University of Arizona in December 2020. Subsequently, Ashford University was rebranded as the University of Arizona Global Campus (UAGC), where Zovio entered into a 15-year contract with the online college to provide its services (marketing and recruitment) in exchange for a revenue share—it is also reportedly Zovio’s largest client under contract. However, in March 2022, the legal proceedings against Zovio came to an end with the judge ruling in favor of the claimant, which resulted in the sharp decline of its share price—Zovio’s share price has dropped below USD 1 per share for 30 consecutive business days, and the company was warned that it is in danger of delisting from Nasdaq if it is unable to close its share price above USD 1 for 10 consecutive trading days by the end of October.</ul>