Tuesday Jan 7, 2014 by Dennis Keohane - Senior Writer, VentureFizz
SimpleTuition was founded in 2005 as the go-to site for comparing and shopping for college loans. Over the years, the company expanded its services to include SmarterBucks, a rewards program that helps pay off student debt by shopping in its online marketplace or completing online surveys, and Valore Books, a textbook rental/buying/selling site that the company acquired in 2012.
At its heart, the company is trying to make the entire college experience more affordable, which is a noble vision. To become a brand that college students, graduates, and parents associate with helping ease the student debt burden, SimpleTuition will be making some big changes in 2014.
SimpleTuition, as it is known today, will be changing its name and rebranding in 2014, as CEO Kevin Walker said, "to reflect the broader company that it has become."
The company was founded seven years ago as a comparison shopping engine for student loans. As Walker explained, "Once the credit crisis hit-we still made money-but the opportunity in student loans wasn't as big as it once was."
The folks at SimpleTuition realized that they "had strong competencies in marketing directly to students and had built a big affiliate network of companies and brands that touched students," as Walker explained. "So we set about looking for new businesses that could leverage those capabilities."
That larger vision for leveraging the ability to connect with college students (and those who financially supported them) led to SimpleTuition's acquisition of Valore Books in 2012. As Walker said, they acquired the textbook marketplace company, and then "fully integrated Valore into what we do, but they are [currently] still a different brand."
The move was a success, as SimpleTuition's CEO explained, "In the first year after the acquisition we tripled the revenue of that platform, which really showed that our marketing [worked] nicely and that we could grow Valore's business."
In its current incarnation, SimpleTuition is a marketplace for many different things that students can use to earn money for college, as well as manage loans and debt. As Walker said, "We have a marketplace for student loans, we have a marketplace for scholarships, we have a marketplace for textbooks, and we have a marketplace for electronics."
"We let students find companies, sellers, providers, buyers, whatever the appropriate party is," he added, "in order to help the student save money or find information that will help them get through college at a lower cost and get more out of the experience."
"We are happy to help as many students as we do. This year we'll serve about 17 million people, mostly college students, but parents and high school students heading to college as well."
SimpleTuition has thirty-five employees in Boston, and had about $45M in revenue in 2013, as Walker told me. As he explained, the company is "right around profitable." "Some years we lose a little money, some years we make a little money," Walker said. "That's by design, we are continuing to invest in the company pretty aggressively. We are willing to give up some profitability in the short term to keep the growth ramp steep."
"Next year we can almost double the business," he added. He emphasized that they were in a full scale hiring blitz, looking for design talent, developers, and marketing folks.
SimpleTuition has raised over $21M in funding over the last seven years, with four different investment rounds from Flybridge Capital Partners and Atlas Venture, with North Hill Venture taking part in some of the later rounds. The last round was a $4.4M Series D last spring from Flybridge and Atlas. Flybridge's Jeff Bussgang and Atlas's Ryan Moore sit on SimpleTuition's Board of Directors.
(In 2012, the company also raised a $5M debt loan from Horizon Technology Finance to help with growth.)
The company is growing fast and tryint to take advantage of a huge market opportunity. As Walker commented, "There are about 50 million people (parents, students, etc) involved in the college system. Those people spend about $400 billion a year on colleges, tuition, study guides, electronics, travel to and from school, etc."
"All that spending," he added, "has led to about $1.2 trillion in student debt. We believe that the we can help students save money on things related to college. We can help them pay down student loans faster, save money on textbooks, save money on electronics, and in other areas."
"We have a very big opportunity because so much money is spent on higher education every year," Walker continued. "The problem of it being so expensive is one that the vast majority of families with kids in college-or about to be in college-are worried about. So positioning a business around solving that very extreme problem is avery big opportunity."
"We think of ourselves everyday as an entity that can take the edge off that $1.2 trillion problem."
The company, as a for-profit entity in the education space, is a big target for critics. At one point, SimpleTuition was featured in an unflattering piece in the Wall Street Journal about lenders giving gifts to college financial aid officials. While fishing for customers and favor among college loan officers is of questionable ethics, SimpleTuition's involvement (and the premise and lead of the WSJ piece) is a bit of journalistic sensationalism. (The author points to a Legal Seafoods gift of...wait for it... a couple of lobsters-which were the prize in a business card raffle-as the sign of SimpleTuition's evil handout practices.)
Obviously SimpleTuition is in the college loan industry to make money, which, looking back at some of the numbers Walker shared is a huge opportunity. In a world where everyone seems to want to avoid grey areas at all costs, is it possible to be a company that makes money and solves a problem that is spiraling out of control? Some who see things only in black or white might say no, but SimpleTuition's CEO Walker believes that being profitable and doing good can coexist in business.
"We are playing right to the American dream," he said, "and making it more possible and easier for people to accomplish what they want to accomplish in life, and not feel like they come out of the blocks with this big debt from college weighing them down."
With a year of success in the rearview mirror, and a road full of change ahead, SimpleTuition is a company to keep an eye on in 2014.