Credentialock China to Focus on International Student Verification Market
When we spoke to Royal Oak, MI-based startup Credentialock last spring, CEO Scott Slyfield told us he was in talks with an Ann Arbor startup called Educatrium to partner and focus on student document verification for the Chinese market. Called Credentialock China, that effort has formally launched and last month, it won the University of Michigan chapter of the China Entrepreneur Network’s China Business Challenge. Joining Slyfield and Educatrium co-founder Cheng Chen in the venture is Zubair Ahsan, Educatrium’s programs coordinator.
Slyfield says Credentialock China competed against more than 50 entrants to win the China Business Challenge’s $6,000 grand prize, access to capital, and mentorship. But perhaps more importantly, he notes, Credentialock China’s business model won an important validation from the market it hopes to serve—the parents of Chinese students who want to attend American schools.
Credentialock China combines Credentialock’s cloud-based document storage technology with the reach of Educatrium, an international tutoring and college prep firm based in Nanjing, China, and headed by Chen, U-M’s 2011 Entrepreneur of the Year. Educatrium also mentors Chinese students who want to study in America through the college application process, helping with school choices, course of study, and essay revision. As of 2012, it has 20 employees in Nanjing, Nantong, and Chengdu serving more than 1,200 clients.
Slyfield says the extra step of document verification is needed because fraud is a widespread problem in China, pointing to research by Zinch China that finds that 90 percent of recommendation letters are fake, 70 percent of essays aren’t written by the applicant, and 50 percent of high school transcripts are falsified. Credentialock China will also work with American institutions and admissions offices to verify admissions documents from Chinese students.
“There’s so much fraud in China that the integrity of a product, from a Chinese perspective, is more valuable if it’s a U.S. company,” Slyfield says, explaining why Credentialock China will be located in Michigan for the time being. “Parents will pay a premium for a U.S. brand.”
Slyfield says Credentialock China is going after high-net-worth individuals, part of China’s emerging upper class, who consider it a worthy investment to pay thousands of dollars to get their children into American boarding schools in the hopes of one day sending them to Ivy League universities. Data from the U.S. Department of State estimates that more than 200,000 Chinese students arrived to attend U.S. schools for the 2012-2013 school year. Slyfield says that at the Knox School in New York alone, where tuition costs up to $55,000 for first-year international students, more than 50 percent of the students are from China.
With this kind of money involved, Slyfield points out that recruiting international students is part of most universities’ business strategy—which gives him and his partners in Credentialock China confidence that theirs is a winning business model.