US Online Tutoring Market Set to Grow $16.45 Billion Amid COVID-19 Boom

A child showing homework to her teacher over a video call.

Though most schools are beginning to return to in-person learning now, online schooling has been a major hallmark of the COVID-19 pandemic. This, in turn, has driven new interest to the online tutoring market, which is set to grow to over $16 billion by 2025 in the United States (US) alone, according to a new report from global technology research and advisory company Technavio.

Market Profile

Online tutoring is a diverse and fragmented market. It is made up of a number of big companies offering well-established courses, along with smaller entrepreneurial set-ups from individuals offering their own tutoring services. 

The two key categories in the online tutoring market are on-demand tutoring and structured online tutoring. On-demand tutoring offers a personalized platform, helping students progress based on their abilities. Structured online tutoring requires real-time interaction between students and tutors. 

The online tutoring market was valued at around $4.8 billion globally as of 2019, according to a separate report from Grand View Research published in October 2019. North America dominated that market by accounting for more than 35% of the share globally, a dominance attributed to the “availability of a large customer base” and “well-established” providers.

Growth Projections

The Technavio report puts forward projections for the US market, which is also the biggest market globally. In 2021 alone, the online tutoring industry in the US will expand by a compound annual growth rate (CAGR) of 11.60%, according to Technavio. Growth will then “accelerate” to over 12% between 2021 and 2026, the report says. This will amount to incremental growth of $16.45 billion. 

Notably, the consumer discretionary sector will see a “negative impact” due to the COVID-19 pandemic. However, the market overall will have a “positive impact” due to the pandemic. 

There will be a similar level of growth reported globally, too, according to a report published earlier this year. That analysis projects that the global online tutoring market will advance from $150 billion in 2020 to nearly $280 billion by 2026, tallying a CAGR of 10.82% between 2021 and 2027.

Reasons for Growth 

Within the US, the growth is attributed to a number of factors, including “the increase in tutoring support for test preparation services,” which is expected to “offer immense growth opportunities.” “The surge in tutoring support for test preparation services and flexibility offered by online tutoring has been instrumental in driving the growth of the market,” the report explains. 

Furthermore, the COVID-19 pandemic is playing a big role — particularly due to the lack of personal connection students now feel. This change is driving many to “unorganized private tutors,” a now-growing section of the online tutoring market.

Major Players

As highlighted above, the US’s online tutoring market is highly fragmented. Furthermore, the degree of fragmentation is only expected to accelerate over the forecast period. While individuals are expected to play a bigger role in the market in the near future, some of the biggest companies in the industry are ArborBridge, Chegg, Club Z!, Fleet Education Services, Pearson, TutaPoint,, and Zovio. 

A reflection of how the pandemic has benefited this industry, Chegg saw its total revenue grow 57% in 2020 to over $640 million. This nearly $200 million year-over-year increase was achieved due to a massive 67% uptick in subscribers to 6.6 million for the year.

Jemima McEvoy

Jemima is a journalist who enjoys reporting on business, particularly small business and entrepreneurship.

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