Monday, January 7, 2008

Sapient vets build student test-prep site

By Christopher Calnan

Three former Sapient Corp. executives have built a dot-com in a market dominated by long-time test-preparation companies with an Internet-based learning tool targeting both students and independent tutors.

North Andover-based Omnisharp Inc. began beta testing its Socrato.com test-prep website in October and plans to begin a controlled study with nearly 500 students for the Massachusetts Comprehensive Assessment System, or MCAS, now through May, CEO Raju Gupta said.

Also this month, Socrato is scheduled to close on an undisclosed amount of financing from friends and family, he said. The company, which has yet to generate revenue, is considering venture capital or angel funding in late 2008, Gupta said.

In addition to state tests, such as the MCAS, Socrato plans to roll out testing tools for the SATs and other standardized tests. An estimated 1.4 million high school students take the SATs each year. And Gupta estimates that the total test-taking market serves 2.5 million students.

At Cambridge-based Sapient, a business consulting and technology services company, Gupta worked in business development and support. He founded Omnisharp in 2006 with Sapient co-worker Mike Oates and a third executive, whom he declined to identify.

Although The Princeton Review Inc. and Kaplan Inc., both based in New York, dominate the standardized test-prep market, Gupta said Socrato plans to generate business by developing a platform for not only individual students, but also independent test tutors looking for online tools.

"That's an unsupported marketplace right now," he said. "The way we're going to market is by leveraging the small, mom-and-pop tutoring sector."

Omnisharp is also planning to patent Socrato's software, which develops tests tailored to a student's strengths and weaknesses based on previous scores. Gupta said the company hasn't decided on a subscription price yet.

In 2005, the total test preparation market was worth more than $4 billion. Spending on private online tutoring totaled $115 million during the 2005-06 school year, according to Eduventures Inc., a Boston-based market research firm.

Karan Goel, CEO of Chicago-based PrepMe Inc., said Princeton Review and Kaplan combine to capture about 50 percent of the test-prep market. But several others are targeting the online portion of the business.

In 2005, Boston online learning company Acadient Inc. launched Boston Test Prep, which developed a digital-audio SAT prep course. Both Barron's Educational Series Inc. and the College Board, which administers the SAT, offer online test-prep courses.

None of the pure-play online test-prep companies have attracted enough adoption to win major market share, Goel said. "Online is still in its infancy," he said. "It's not there yet."

PrepMe, which launched in 2005, has served about 20,000 students, Goel said.

In February 2007, PrepMe began providing free online courses, with a subsidy from a philanthropist, to all high school juniors in Maine after the state required juniors to take the SAT each spring starting in April 2006.

Goel said the biggest obstacle facing the adoption of online test preparation is a generational one.

"Kids get it," he said. "It's a matter of their parents getting it."