Online education company Zovio is taking steps to liquidate its remaining operations and shut down, according to documents filed this week with the Securities and Exchange Commission.
Executives at the company, which once brought in more than $1 billion in annual revenue, also wrote that they weren’t sure they could sell Zovio’s latest major asset – Fullstack Academy, a coding and software bootcamp. mainly online data analysis – before ran out of money.
The news was first reported by Dive into higher education.
In his Filing with the SEC, the company’s board of directors announced an upcoming meeting of shareholders to vote on a dissolution plan. The proposal calls for selling Fullstack, repaying its remaining obligations and distributing the remainder – potentially up to $20.3 million – to shareholders.
Zovio estimates Fullstack, which the filing says has attracted interest from “strategic and private equity potential buyers,” could fetch between $34 million and $55 million, albeit with a sale price on the lower end. of this spectrum would leave nothing to shareholders. There is also uncertainty about the possibility of a sale before the company depletes its cash reserves.
“Management has determined that it may not be possible to complete a transaction with any of these potential buyers until the Company’s remaining cash is exhausted and has considered several sources of short-term financing or alternative transactions allowing it is up to the company to maximize the ultimate return for shareholders,” the filing reads.
At its peak, Zovio – which was founded in 2004 as Bridgepoint Education – operated two for-profit online colleges, including Ashford University, which it sold in 2020 to the University of Arizona. After this sale, Zovio continued to handle marketing and online program management for the renamed Arizona Global Campus, but ultimately sold its OPM business to the university in August after deciding it could achieve profitability.
Zovio in May sold an online tutoring division, TutorMe, for $55 million. The company has also faced a slew of legal challenges over how it marketed its programs to prospective students — it is currently appealing a $22.4 million fine against Ashford to a California judge.
Ashford and another former Zovio asset, the University of the Rockies, are also on a list of about 150 for-profit colleges with which the US Department of Education is negotiating a $6 billion settlement to settle the debts of former students.