2. Disclaimer
The control of this promotion has not been approved by an authorised person within the meeting of the Financial Services and Markets Act
2000 (“Act”). Reliance on this promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of
losing all of the property or other assets invested. Any individual who is in doubt about the investment to which this document relates should
consult an authorised person specialising in advising on investments of the kind in question.
The purpose of this document is solely to provide information to persons who have expressed an interest in investigating the possibility of
providing finance for the development of Tute Online Limited (the “Company”). It is not intended to form the basis of any financing decision,
does not constitute an offer to subscribe for or purchase shares in the Company and no contract may be entered into on the basis of the
information contained herein.
The information in this document has been supplied by the Directors of Company and has not been independently verified, Neither the
Company, nor any of their respective officers, agents or employees, give or have any authority to give any representation or warranty (express
or implied) for the accuracy and completeness of this document or any other written or oral communication transmitted or made available to a
prospective financier, nor shall they be liable in any way for any inaccuracy, omission or misleading statement herein. Only those
representations which may be made to any party in an appropriate legal agreement, subject to such limitations and restrictions as may be
specified therein, shall have any legal effect.
This document has been provided to interested parties for information purposes only and upon the express understanding that such parties will
use it for the purposes set out above. In providing this document the Directors undertake no obligation to provide the recipient with access to
any additional information or to update this document or to correct any inaccuracies therein which may become apparent and reserve the right,
without advance notice, to change the procedure for the finance raising or terminate negotiations at any time prior to the signing of any binding
agreement for the financing. In no circumstances will the Company or the Directors be responsible for any costs or expenses incurred by
potential financiers in connection with the proposed finance raising.
Certain statements in this Document may constitute forward-looking statements relating to matters such as projected financial performance,
business prospects, new products and services and similar matters. A variety of factors could cause the Company’s actual results and
experience to differ materially from the anticipated results, beliefs or other expectations expressed in any such forward looking statements.
2
3. Disclaimer (continued)
The contents of this document are private and confidential and are being supplied to you solely for your information and may not be
reproduced, redistributed or passed on, directly or indirectly, to any other person or published in whole or in part, for any purpose except to
your professional advisors under duties of confidentiality.
This document does not constitute or form any part of, and should not be construed as, an offer, an invitation, an advertisement or any other
solicitation, an advice or recommendation to purchase or subscribe for any securities or interests, including any potential interest in the
Company. Without limiting the foregoing, this document does not constitute nor contain, and under no circumstances should be construed
as, a public offering of interests in the Company in the Hong Kong or elsewhere. If the distribution of this document in or to persons in a
jurisdiction is restricted by law, anyone in possession this document should inform himself/herself about, and observe any such restrictions.
Any failure to comply with such restrictions may constitute a violation of the laws of that jurisdiction. Offering of interests in the Company will
be made, if it all, solely through the offering memorandum.
No reliance may be placed for any purpose whatsoever on the draft information, statements or opinions contained in this document, and no
liability is accepted for any such draft information, statements or opinions. Neither the Company nor any other person makes any guarantee,
representation or warranty, express or implied, as to the accuracy, completeness or fairness of the draft information, representations and
opinions contained in this document, nor does the Company nor any other person, to the maximum extent permitted by law, accept any
responsibility or liability whatsoever for any direct or indirect loss howsoever arising from any use of this document or its draft contents or
otherwise arising in connection therewith. While the Company believes that such information is accurate, you should undertake your own due
diligence and conduct your own evaluations of the Company and the information contained in this document. Nothing in this document
should be treated as advice relating to legal, taxation or investment matters and you are advised to consult your own professional advisors
concerning any potential acquisition, holding or disposal of any interests in the Company.
If the Company decides to establish and offer interests to investors, it may or may not offer or invite you to subscribe to interest in the
Company and the features of the Company finally offered to investors may not be the same as what is described in this document. All
investors will be subject to the terms of Companies constitutional documents.
No action has been taken to permit an offering of interests in the Company to the public in Hong Kong. This document has not been
authorized by the Securities and Futures Commission of Hong Kong or reviewed by any other regulatory authority in Hong
Kong. Accordingly, no advertisement, invitation or document relating to the interests in the Company, whether in Hong Kong or elsewhere,
shall be issued, circulated or distributed which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong
Kong other than (i) with respect to the interests in the Company which are or are intended to be disposed of only to persons outside Hong
Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571) of Hong Kong (“SFO”) and
the Securities and Futures (Professional Investor) Rules made thereunder, or (ii) in circumstances that do not constitute an invitation to the
public for the purposes of the SFO.
3
4. Executive Summary
• Tute Online will deliver a customised tutoring platform which connects teachers with students
who require help in learning up to date information on specific subjects that suit your
personal situation.
• Tute Online is a premium educational company connecting Asian based children (aged 5-18)
with UK-based tutors and teachers through an online platform
• The platform will be used by children to supplement their current schooling through One-on-
one Tutorials or via groups lessons with up to 7 children to one tutor.
• The platform will also provide UK university entrance assistance, interview preparation,
personal statement advice, UK schools and university advisory service and a UK schools
marketing and entrance service.
• Tute Online is partnering with Tute.com, an established and highly successful online
education company in the UK. Tute.com has a proven delivery platform, sector leading
content, Oxbridge, Russell Group and other top UK university-educated tutors as well as 60
qualified full-time teachers in the UK.
• Tute Online will deliver consistent quality and exceptional service to capture the enormous
demand of the growing Asian middle class to supplement their children’s schooling.
• Service will be charged using a subscription model.
4
5. Investment Summary
With direct funding of £180,000 from its founding directors and a platform
that will be ready to launch in Q3 2015, Tute Online is now seeking to raise
up to a further £400,000 in return for 17.6% of the company. (For investors
with UK tax liabilities, relief may also be available under the Enterprise
Investment Scheme EIS)
This investment will be used help us scale the business.
• Recruit and build out the educational team including the hiring of an
academic director and commensurate sales and marketing operations.
• We propose to capture 1% of the Hong Kong International School
Students market within 8 months
• We propose to become cash flow positive and in growth stage within 8
months
5
6. The Background and the Problem
The company’s founders have identified a gap in the Asia market to provide teaching and other educational
services from the UK utilising a well-established and high quality online platform.
Face to face
• Traditionally offered in physical format, extra-school tuition is purchased by over 90% of all families in Hong
Kong, Singapore, Korea and several other Asian markets.
• Face-to-face tutoring companies exist in Hong Kong; their services are in demand and the companies providing
them are in most cases profitable and growing.
• Fragmented market with no established brands
• The quality of tutors and the content they use has no consistency.
• The high cost of living in Asia makes Tutor recruitment very challenging; there are very few truly professional
career tutors. Many tend to have arrived in HK looking for a job elsewhere and use tutoring as a stop-gap.
Online
• Today’s children enjoy learning online and this medium is becoming more widespread in Europe and the USA.
• Asia, with its technological background, and high quality internet service, whether fixed line or mobile, is well-
suited to this medium.
• To date, however online tutoring has largely been conducted over video-calling apps such as Skype; this has
considerably limited the quality of the service.
6
7. The Solution: Turning “Online” into the “Premium
Subscription Purchase”
• TuteOnline will provide an online platform that can deliver quality Tutorials 24*7 in subjects aligned to
the educational needs of children aged 5-18 years.
• change this through its acquisition of exclusive rights to the sector leading platform and the educational
content of Tute.com, a company providing online lessons to over 422 schools in the UK.
• The proven platform and higher quality content / learning support material create an “eco-system” of
choice for tutors and teachers alike as well as for aspirational parents and students.
• Tute Online will take tutoring and teaching to a more advanced level by means of a constant quality of
service delivery.
• Its key differentiating features are:
o A market-leading purpose built online teaching platform. This is already used in select British
schools and universities, approved by various government agencies and now adapted for the
tutoring market.
o Exclusive access to an existing digital library of teaching materials and lesson aids. High
quality in-lesson content greatly improves consistency of delivery, the learning experience and
outcome. Research shows no competitors are using this approach.
o High quality professional tutors from the UK’s leading universities and fully-qualified teachers
who will use the Tute Online system (platform and content) to deliver their lessons.
7
8. TuteOnline Core Services
• One-to-one lessons: customers will be able to determine what they wish the lesson to
cover. They will be able to select their tutor from the tutor search page. This service will
have a standardised price.
• Group lessons: small groups lessons with a maximum of circa eight students. These
lessons are more likely to involve more qualified teachers as the costs are shared.
Price per student will depend on class size and teacher.
• Rock Star Webinars: lend themselves to revision but can also be used for primary
learning. These webinars will be characterised by one-way communication due to the
high number of students. High profile tutors will generate interest and attract attention.
These events will be well publicised and can be used as a marketing tool.
• Virtual Academy: like Tute.com's equivalent, set lesson times and topics will be posted
online. This will allow customers to spread the cost of the lesson, even if they are not
able to organise their own group lesson. Likely to involve more qualified tutors and
costs will be standardised. Can be used for both revision and primary learning.
8
9. Why target Hong Kong and Asia?
• Compared with European markets, the use of tutors to provide extra tuition is almost universal in Asia.
• In 2013, 85% of secondary students in Hong Kong took, on average, 5 extra hours of extra tuition per
week.
• The Asian market provides a significant opportunity because of Hong Kong and Singapore’s strong
cultural and historical links to the UK as well as an education system based around the British model
and in many cases British courses.
• Asia has a technological infrastructure and a mindset that makes online learning accessible and
acceptable.
• There is a growing awareness that Asian students need something more than an education based
around “rote learning”.
• As a result significant numbers of Asian students want to go abroad to study in the “West”.
• There is a well-grounded perception of British education’s world class quality, and hence that it is a
service worth paying for.
• There is huge existing demand for quality supplementary learning especially provided by UK educated
tutors.
9
10. Tute Online - Differentiated Features
Tute online will succeed through
• Entering into business with experienced partners
• Leveraging the right Technology in the right way
• Great Execution of business plan
• A culture of Excellence running through the company
• Excellent up to date and qualified content
• Professional and enthusiastic tutors
• Delivering a trusted platform
• A sticky service that provides a unique value to the customer
• Repeat business as students become familiar with the platform and extend their tutor hours
across multiple subjects.
• Social and Viral
• Cross sell other educational services from special “Rock Star webinars” (using academic
leaders from Oxbridge and other premier universities to deliver revision classes in specific
subjects) to personal statement and application assistance and beyond.
10
11. Partnering with Success
The founder directors of Tute online have been researching the potential for online education for two years.
Tute.com was approached as a potential partner with a robust technology platform.
The focus on content and educational sector focus provides TuteOnline with the perfect partner for success.
Tute.com’s core UK business is growing rapidly and despite the merits and attractions of rapidly expanding international
markets, the board of Tute.com has elected to pursue opportunities outside its core home market through a joint venture with
Tute Online. By taking a 25% stake at Tute Online’s inception, Tute.com is leveraging its existing technology and content to
enter new markets and partner with experienced Asian business leaders.
Tute.com
• Tute.com was founded in 2012 by Sean Gardner, (CEO), and James Fawcett, (FD) and is based in Wrexham, Wales.
• UK’s market leader in online classroom teaching and social learning, serving schools and local authorities.
• Tute.com has delivered lessons to 228,000 pupils and 22,157 group lessons to 422 schools across the UK.
• The company operates 60 full time, dedicated teaching staff
Partnership Set-up
• Cloudthing is an outsourced IT arm for tute. com
• CloudThing has a 25% equity stake in Tute Education Limited (UK)
• Tute.com is owned by Tute Education Limited (UK)
• Tute Education Limited (UK) have taken a 25% founder shareholder stake in TuteOnline.
• In return for its 25% shareholding in TuteOnline, Tute.com is providing a number of the key elements for not only setting
up TuteOnline, but also for ensuring its success once it is established and entered the marketplace:
• Tute will benefit from the equity growth and future software investments that TuteOnline maybe able to bring.
11
12. Partnering with Success - Note - we need features of
site
• Tute.com, in addition to its focus on technology and on the continual
development of best teaching content is developing new products that will
redefine the e-learning proposition
• Social Spaces, a social network style platform that will enable students
and teachers to have a centralised communication forum.
• Tute Online will have access to all of these new features.
• (?? - CR note = this slide needs some work)
12
13. What Tute.com is providing to Tute Online
The Online Platform
• Tute Online has paid £80,000 for a perpetual licence over Tute.com’s proprietary and sector leading
technology platform (www.tute.com) that currently delivers its entire service suite to its users in the UK.
• This licence will include access to all the content
• The founding directors of TuteOnline have also financed a further £75,000 for software adaption to suit
the particular requirements of the tutoring business.
• This development has been defined in a scope of work between all parties and will be delivered and
managed by CloudThing.
• This software will be owned by TuteOnline
• The platform is structured to deliver 300,000 concurrent tutorials with up to 8 participants in each
• The platform will allow full booking, billing, scheduling, and the delivery and recording of the lessons
themselves
• The platform will allow TuteOnline to follow up with the students to upsell and cross sell services.
• The adapted Tute Online platform will be available for launch by September 2015.
13
14. Partnering with Success
Partnership
• The directors of Tute Online believe the ability to access the experience of Tute.com staff will significantly enhance the Tute Online offering
as well as simultaneously reducing business and execution risk.
• Tute.com is a 25% shareholder in Tute Online and incentivised to work in the common interest of the two companies wants to make sure
that Tute Online is a great success.
• In positively electing to adopt similar brand identities both entities are staking their brand and reputation by making Tute Online closely
linked to tute.com
• In addition and subject to capacity at any time Tute.com has offered for its teaching staff to be used in the provision of tutorials on Tute
Online when they are not actively teaching tute.com classes. This service will be offered for Tute Online at a cost plus 10% margin.
• Whilst Tute Online will have its own tutor base, based on a freelance model, the ability to use fully qualified and experienced teachers will be
invaluable, especially at the outset, not only to run early lessons, but also to help newly-recruited tutors gain experience and knowledge of
the Tute.com library and teaching methods.
The two companies have:-
• Established a culture of co-operation and support with the sharing of information and ideas.
• Built a close working relationship.
• Support, guidance and experience of Tute.com executives and staff
• Agreed and documented a transaction, including a perpetual licence, platform re-design requirements, hosting arrangements and ongoing
maintenance.
• Signed terms for a regional licence of Tute.com’s platform for Hong Kong
• Defined the sharing of content and the requirements for the platform enhancements delivered by Cloudthing
Business Set up
• Established Tute Online Limited in the UK and established a 100% operating subsidiary based in Hong Kong.
• Lined up key staff for Tute Online, so that they are ready to join the company and help execute the business plan
• Been working with external consultants to plan the PR, Marketing and Sales execution ready for soft launch.
• Researching the potential tutor population and looking at the provision of content.
14
15. What Tute.com is providing to Tute Online
Benefits
• The directors believe the new TuteOnline platform represents one of the most
advanced educational platforms today and think it has been procured at a fraction of
the cost of a newly built structure.
• The joint venture achieves significant operational and structural advantages for
TuteOnline
• The Joint Venture removes over 12 months of technology development and improves
time to market without many of the technological risks associated with a startup.
• To develop this platform from scratch would cost upto £500,000 in technology spend
and much more than that in terms of risk weighted investment costs.
• By tapping into Tute.com’s technology, expertise and guidance, the company
significantly reduces a number of inherent risks of any startup business.
• TuteOnline, its shareholders and staff bring over 30 years of experience in operating
and running Asian businesses.
• Tute.com who is already a leading market participant in the UK will supply the tools, the
educational expertise, the content, knowledge and experience and will save us
considerable academic acquisition costs
15
16. Bespoke content access and digital library
The teaching materials and content of Tute.com
Tute.com’s full-time teaching staff have created a valuable digital library of bespoke and
ready to use teaching materials designed to aid in the teaching of the wide range of
curriculum subjects offered in its program.
• This library is added to on a continuing basis as the teaching staff add topics
• The content is owned by and is exclusive to Tute.com and its teachers.
• Through its agreement with Tute.co, Tute Online has secured unlimited use of and access
to this unique digital library for its teaching staff as they deliver educational sessions over
the platform.
• To protect the intellectual property and ownership of the content that can be
instantaneously tapped into, the Tute Online community can only access this digital
content via the Tute Online platform.
• The directors believe access and provision of content in support of the tutoring process
provides a significant advantage over the company’s potential competitors and further
differentiates Tute Online from sites which may look to act as a “marketplace” simply
matching tutors with potential students without added value, functionality or content
16
17. Current Timetable
Timetable and objectives:
• May:- Legal documentation including signing of shareholders agreement and license agreement
will be completed.
• June:- Finalise key hires for Tute Online including the CEO and graduate support staff will be
finished
• June:- complete trials / testing for Tutors on the TuteOnline platform
• July:- Cloudthing’s work on the TuteOnline platform will be completed.
• August:- Platform testing
• August:- recruitment of Phase 1 tutors; training of initial tutors with help of Tute.com’s trained
staff (including familiarisation with Tute.com’s content and teaching approach using this content);
preparation of marketing launch
• August:- Marketing / Beta Client invites
• September:- Run Beta Trial tutorials.
• October:- Cloud Thing make final changes
• October:- Soft launch of TuteOnline with first live pupil tutorials (feedback and making
alterations).
• November:- SOW Delivered - UAT sign-off. Software development finished
• December:- Hard launch of TuteOnline into the HK market.
17
18. Strategy and Marketing
• Tute Online will pursue a multi-segment marketing strategy, initially targeting all
segments of the International Schools submarket in Hong Kong. The similarity of this
group’s education to that of the UK, plus its higher disposable income, makes it a suitable
initial target.
• Once it has the necessary skills and material, the company will then target domestic
school students in Hong Kong although they may come to the platform as a result of
marketing.
• The company will position itself as ‘accessible premium’. Its services will be viewed as
high quality yet still accessible to anyone. The marketing strategy will aim to reach across
socio-economic groups and appeal to the broadest possible market.
• The brand will be portrayed as young and professional and this image will complement
the original and high quality nature of our services.
• It will associate itself with academic excellence, notably the UK’s leading universities and
schools.
• Rock Star Webinars have the potential to be a very powerful marketing tool that should
quickly benefit the company’s other services.
18
19. Competition in Hong Kong
• Most competitors use Skype or similar platforms for e-tuition; this means the service creates no value once the
student and tutor have met.
• No competitor has a comprehensive content bank that covers a meaningful amount of any education system’s
syllabus.
• Incumbents usually focus on either local or international school students.
• Tute Online is aiming for a price point which will be slightly under the main competition for one to one tuition
(HKD$ 500 – 600) per hour with a gross margin of about 50% – 55% but for group lesson the gross margins
will be significantly higher.
The Competition
• Bridgepoint Tutors: Similar service. Not all teachers are qualified teachers and is very expensive (HK$690-
HK$1000). We will provide a higher quality service for a lower price. Lessons take place over Skype.
• British Tutors: Mostly face-to-face. Information only provided upon request and payment of HK$1500
introductory fee. Tutoring is 880 HKD/hr and Skype is used for e-tuition.
• Appedu: Mobile learning apps. Students can message tutors if they want a question explained. This can be
viewed as a indirect competitor.
• A-Square Education Centre: Mostly face-to-face. Provides tutoring and revision courses for both local and
international schools. Class sizes are usually between 2-8.
19
20. Key Staff
Planned key initial hires for Tute Online:
CEO
• Candidate identified and has verbally agreed to join; already shadow working with the Founders on the venture.
• Once legal agreements are signed (by end of May) the candidate will resign from his current post in the IT industry
with a 3 month notice period (June, July and August) to be ready to become full time in September; coinciding with
Phase 1 launch.
• UK national, based in HK with HK domicile. Long and successful career in the technology industry, mid 30s.
Academic Director
• Candidate identified, currently in full time employment at a leading UK public school.
• Teacher and administrator throughout her working career, now mid 50s and looking to retire from full time school
role and sees Tute Online as an exciting new challenge.
• Will be used to shadow the work of Tute Online during notice period.
• Ready to join full time in in late 2015 or early 2016.
Graduate
• Candidate identified who has agreed to join.
• Currently finishing assignment for British Foreign Office in China.
• Fluent Mandarin speaker and in mid 20s
20
21. Board Members
The three Founders will be the initial members of the Board of Tute Online. The CEO will join the Board in
September 2015 when he officially joins (post notice period). Other non-execs may be added from our
second round funding investors.
Executive Chairman
Richard Howorth, based between HK and UK, will be the executive chairman of Tute Online, working
closely with the CEO. He will have particular responsibility for the marketing and promotion of Tute Online
in HK and the building of strategic relationships with universities, schools and governments. Richard is a
founding partner of the Cannizaro group, an alternative asset management and advisory business which
invests globally, but specialises in the Asia-Pacific region including Australasia. After graduating from
Balliol College Oxford (M.A. Oxon), Richard spent his early career with Arthur Andersen Plc& Co, Akroyd
and Smithers Plc, and Nikko Securities Ltd. He joined BZW Securities Ltd in 1987 followed in 1994 by LG
Securities International Ltd. After joining Lionhart Investments Ltd in 1998, Richard moved to Hong Kong
in April 2001 to establish Lionhart (Hong Kong) Ltd, a subsidiary of Lionhart Investments Ltd which he and
his partners subsequently bought out to become Cannizaro (Hong Kong) Ltd. Cannizaro (Hong Kong) Ltd
managed at its peak USD $800 million in an Asian multi-strategy fund. Richard remains based in Hong
Kong and is managing Director and Chief Investment Officer of Cannizaro (Hong Kong) Limited. In 2012
he received a distinction in a Diploma in Financial Strategy from the Said Business School, Oxford
University. After many years in Asia Richard has an extensive network of contacts at all levels of the
corporate, financial and governmental world in a multitude of industries including education.
21
22. Board Members
Other Board Members:
The two other founders, Guy Hayward-Cole and Alistair Altham will be non-executive
directors of Tute Online and will continue to be as actively involved in the strategy and
direction of Tute Online as they have been to date. (Full CVs of the founders can be found
in the Appendix)
Guy Hayward-Cole is based in London and is a Managing Director at Nomura International
plc, a member of Nomura’s Management Committee in EMEA and amongst other
responsibilities, is in charge of Nomura’s Technology, Media and Telecom’s (TMT)
business in EMEA.
Alastair Altham is a partner in Cannizaro Capital Partners LLP and based in the United
Kingdom. Previously an Executive Director of Morgan Stanley Alternative Investment
Partners Alastair has nearly 30 years of venture capital, investment management and
business management experience across a range of investment related and commercial
enterprises. He is also currently Chairman of J.W. Greaves and Sons and a director of
Sond Wellbeing Limited.
22
24. Investment Details
• The three founders have capitalised Tute Online with its initial start-up capital of £180,000
and approximately six months work in return for 75% of the initial shares of Tute Online.
• The £180,000 start-up capital is being spent as follows:
o £80,000 payment to Cloudthing for the establishment of the Tute Online platform.
o £80,000 payment to Tute.com for the perpetual license to use the Tute brand and
the use of the Tute.com’s platform adapted to Tute Online use.
o £20,000 start-up costs, including legal fees, initial market research and time costs
for a graduate who has been assisting the Founders in various functions.
• Tute.com will receive a 25% shareholding in Tute Online in return for their support,
ongoing help, access to Tute.com’s digital content, teacher expertise and other support.
24
25. Investment Sought
• Tute Online is now seeking to raise Second Round Funding from Friends and Family
investors.
• A detailed business plan has been built with the input of the CEO in-waiting and this is set
out in the next sections.
• The plan shows that that cash flow break for Tute Online can be achieved within 9
months of targeted Phase 1 launch in September 2015.
• Tute Online is seeking to raise up to an additional £400,000 in the Second Round
Funding so that, with the £180,000 invested by the Founders, a total of £580,000 is
raised.
• The objective is for this to fund the company to allow it to scale to its cash flow break
even point cost (targeted for May 2016) i.e. 9 months after September launch and to
provide cover for one year's costs.
25
26. Valuation of Second Round Funding
Initial capital raise by Founders:
Founders: £180,000 75% Cash investment
Tute.com: £ 80,000 25% Investment in-kind
£260,000 100%
Pre-new money valuation of Tute Online in Second Round Funding: (£1,500,000)
New % ownership
Founders( 75%): £1,125,000 59.2%
Tute.com (25%): £375,000 19.7%
Second Round Investors: £400,000 21.1%
£1,900,000 100%
26
27. Exit and Returns
Exit possibilities
The base case thesis for a 3-4 year investment period is as follows
Case A Exit:
• Tute.com acquires the shares it doesn’t own in Tute Online as it seeks to take ownership
of the international arm of Tute.com. We would seek to negotiate the option of receiving
cash for the shares sold or to roll them into Tute.com (depending on individual
shareholder preferences).It is likely that Tute.com will seek its own exit at some stage
subsequent to this period through a sale to a strategic buyer, PE buyer or IPO.
Case B Exit:
• Should Tute.com not wish to acquire 100% ownership of Tute Online (and given they are
minority investors with drag rights over their shares), Tute Online would look for an exit to
a strategic buyer PE buyer in the same time horizon.
27
34. Global Market
• E-learning has become a key feature of modern education.
• Market research firm Global Industry Analysts forecast the global private tuition market to
surpass $102.8bn by 2018.
• GIA found the e-tutoring piece of this market to be worth more than $12bn. This sub-
market is undergoing a tech-fuelled expansion that is driven by demand for its convenient,
inexpensive and effective services.
• Asia-Pacific (notably Hong Kong, Singapore, South Korea, China and Japan), the United
States and Europe are responsible for over 90% of the global private tuition market.
• Hong Kong Market
• In Hong Kong the average school child has 5 hours of private tuition a week.
• Research from 2012 showed that 51% of HK students spend more than HK$1,000 per
month on tutoring
• Government budget cutbacks have further decreased the ability of schools to
accommodate the needs of their students.
• As the education environment has become more competitive, parents have turned to
private tuition to compensate for the shortcomings of public education.
34
35. Asia Pacific Market
• Singapore, South Korea and Hong
Kong have some of the world’s
highest per capita expenditure on
private tuition.
• Forbes estimates the South Korean
after-school learning market to be
worth $17bn annually.
• Singapore’s Department of
Statistics’ 2012 Household
Expenditure Survey found that
families spend $1.1bn annually on
tuition.
• These countries have generally
recognised that their education
systems need to encourage more
creativity and dynamism; this has
increased demand for Western
style education.
35
0%
25%
50%
75%
100%
All Singapore South Korean PrimaryHong Kong Secondary
2013 Private Tuition Statistics
Don't Use Private
Use Private Tuitio
36. Hong Kong Market
The (HKFYG) Private Tutoring of Students in Hong Kong Survey http://bit.ly/1A3ocXs) carried out a study
of Primary and Secondary students in Hong Kong in 2012. the study of 524 random students in Primary 5 to Secondary 6 was carried out for
3 week. The following Assumptions were made:-
• Since 2009 the average time spent in private tuition has risen rapidly from just over 3 to almost 5 hours per week.
• The percentage of students in Hong Kong who receive private tutoring has almost doubled since 1996, from just over 34% to over 63%
• 72.5% of all students do Private Tuition to supplement Hong Kong Primary Schools education
• A very significant increase was found in respondents who say they want such tuition in order to achieve their best possible academic
performance rather than just to improve.
• 51.9% of these students spent more than HK$1,000 per month
36
38. Demand:- Hong Kong Market
Indicators of Youth Values 2013 in Hong Kong
• Hong Kong youth are not satisfied with their language skills
• Indicating a market to teach english online to improve Language Levels
38
39. Demand: - Why Hong Kong students?
Strong demand:
• Asian Development Bank study found
that 85% of secondary school children in
Hong Kong received private tutoring in
2013.
• This large market is highly fragmented
and unstructured.
• Aspirational culture means parents are
relatively price insensitive towards
education.
Short supply:
• Hong Kong has large net student
emigration and this had created a tutor
deficit. Estimated 75,000 HK nationals
studying abroad.
39
15000
17500
20000
22500
25000
200000
265000
330000
395000
460000
525000
2003 2005 2007 2009 2011 2013
Numberofstudents
Hong Kong Primary School Enrolment statistics
2013
Local Enrolment
International Enrolm
40. Supply:- Why UK tutors?
• UK’s world class reputation in education.
• Large number of university students wanting
additional income creates a tutor surplus.
• Asia is is the largest source of foreign
applicants to UK universities.
• 26% of Hong Kong’s 75,000 students studying
abroad study in the UK. This reflects the high
regard in which UK education is held.
• Native English speakers are able to teach in the
world’s most popular language.
• HK students get tutored in the afternoon and
the time difference would allow UK tutors to
work in the morning.
• Matching Hong Kong’s excess demand for
tutors with the UK’s excess supply.
40
8575
10719
12863
15006
17150
HongKongStudents
Year
Students enrolling in Higher
Education courses in the UK
from Asia
From Hong Kong
From China
41. Why Online?
Better for Students:
o Students view the online experience as
fun and engaging; they enjoy it more.
o Convenient and easy.
o Larger selection of tutors.
o Easy to organise group lessons and
spread the cost.
o Out of class support.
o All online activity is monitored and
recorded, providing the safest possible
learning environment.
Better for Tutors:
o Convenience of tutoring from
anywhere.
o Save time and money not having to
constantly travel.
o Support of in-lesson resources.
o Increases the service’s market, which
increases its pricing power.
o Association with a professional and
recognised organisation.
41
42. Why Online?
Better for Students:
o Students view the online experience as fun
and engaging; they enjoy it more.
o Convenient and easy.
o Larger selection of tutors.
o Easy to organise group lessons and
spread the cost.
o Out of class support.
o All online activity is monitored and
recorded, providing the safest possible
learning environment.
Better for Tutors:
o Convenience of tutoring from
anywhere.
o Save time and money not having to
constantly travel.
o Support of in-lesson resources.
o Increases the service’s market, which
increases its pricing power.
o Association with a professional and
recognised organisation.
42
43. Team foundersRichard Howorth
Photo
3 Bullet Points that
make you suitable
to this project
• 1
• 2
• 3
Guy Hayward-Cole
Photo
3 Bullet Points that
make you suitable to
this project
• 1
• 2
• 3
Alastair Altham
Photo
3 Bullet Points that
make you suitable to
this project
• 1
• 2
• 3
Chris Ransford
Photo
3 Bullet Points that
make you suitable to
this project
• 1
• 2
• 3
Editor's Notes
Tute Online is a premium online tutoring company
We are solving the problem of ?????
a customised education platform
Help users navigate school and university application
Access to advisors and consultants in educational advice
Access to tutors for meaningful knowledge gap improvement
We will provide Excellence in delivering online tutorial lessons from UK based tutors to Asian based school children
online tutoring services that will be conducted over the company’s online platform
charging via either a one-off payment or a subscription model designed to
academic course to schools in HK using qualified teachers from Tute.com .
enhance customer satisfaction and shareholder returns.
The company will offer both one-on –one lessons and group lessons.
superior online platform and in-lesson content.
provide ancillary services such as
UK university entrance assistance
interview preparation
English as a second language tutoring
professional teacher training.
school exhibitions
Tute Online will exploit the enormous demand of the growing Asian middle class to supplement their children’s schooling with out of hours private tutoring, provided by UK based tutors.
Tute Online is looking to raise GBP320,000 in return for 17.6% of the company. For investors with UK tax liabilities this will done under the EIS Scheme.
*The company does not initially plan to operate in China, but it does not rule-out this option.
