As we congratulate TCV portfolio company Nerdy on its first day trading as a public company (NYSE: NRDY), we wanted to take a look back at what has been a remarkable growth and innovation story in the online education market.
We first met Nerdy founder and CEO Chuck Cohn in St Louis in 2014. At the time, Nerdy (doing business then as its flagship brand Varsity Tutors) had 90 employees and no physical offices, operating effectively as a fully-remote company. Sensing an opportunity to disrupt the legacy tutoring market, Chuck had incubated Nerdy as a college student at nearby Washington University in St Louis a few years prior. Over time, it morphed from Chuck’s “side hustle” into his full-time mission. All the while, Chuck had not taken traditional institutional venture capital, choosing instead to bootstrap the business while driving high-revenue growth.
We were immediately impressed by Chuck’s vision for Nerdy and his views on disrupting the legacy tutoring market. Historically, tutoring was a cottage industry – one that was very fragmented and in the billions of dollars in size in the United States. The professional side of the market was physical center-based businesses (in the mall next to the grocery store) that generally had franchise models characterized by high prices and questionable outcomes and satisfaction. And of course there were individual tutors (think former teachers or college students) that used Craigslist, parent’s group lists, bulletin boards, or local relationships in schools to find students. Chuck believed there was a way to empower individual tutors and match them with students that they were uniquely qualified to help.
Chuck’s model sought to more deeply understand the skills of a tutor and the needs of a student and facilitate connections between expert tutors and parents and students across thousands of subject areas regardless of geography. Chuck’s emphasis on quality and product innovation proved prescient as online learning steadily gained importance. As online learning grew, Chuck decided that in order to scale his platform it made sense to bring on an institutional partner for the first time. We were honored to have the opportunity to partner with Chuck, leading a funding round in November 2015. Chuck chose to partner with TCV given our combined expertise in consumer business models as well as our focus on education technology.
Since our initial investment, Nerdy has grown significantly, assembling what we believe to be an all-star management team. The addition of Ian Clarkson and Heidi Robinson opened up a new product center of gravity in Seattle, and added the “been there, done that before” capabilities required to scale a business. We’ve had the opportunity to connect executives from the TCV network to assist in the mission, most notably Erik Blachford (TCV Venture Partner and former Expedia CEO) who joined as an early Board member, and Adam Weber who joined as CMO after leading marketing at Dollar Shave Club (another prior TCV portfolio company).
As COVID swept the globe, Nerdy’s offerings took on a heightened importance, forcing parents to contend with serious issues like learning loss and isolation. Nerdy and other digital providers stepped in with personalized solutions. The unwavering focus on building the best product has enabled Nerdy to become a comprehensive learning destination with over 3,000 subject areas for education and enrichment while maintaining very high levels of student satisfaction. We think this is the winning strategy over the long term.
We congratulate the entire Nerdy organization on a momentous occasion and look forward to working with the team in continuing to transform how people learn!