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Former ApplyBoard CEO Martin Basiri, shown in Toronto in 2023, has struck a testing deal with Educational Testing Service that puts his new startup in competition with his former company.The Globe and Mail
Martin Basiri founded Applyboard Inc. with his two younger brothers to streamline the process for foreign students to apply for universities in Canada and elsewhere. Under his leadership, ApplyBoard became one of the most highly valued startups in Kitchener-Waterloo since BlackBerry Ltd.
For his next startup, the Iranian-born Mr. Basiri had an even higher-minded goal: to help foreign students who had the brains but lacked the means to study and work in Canada – and connect with financiers who could fund their journey. The four-year-old company, Passage Inc., raised $40-million in 2023, led by ApplyBoard backer Drive Capital, and initially helped more than 100 female students from Afghanistan land school and job placements in Canada.
But after the Canadian government pulled back on foreign student visa approvals and cut immigration levels in 2024, Mr. Basiri needed a new strategy. He assembled financial backing to buy two of the world’s best-known college and university admissions tests – TOEFL (Test of English as a Foreign Language) and GRE (Graduate Record Examination) – from Educational Testing Service (ETS), but the U.S. non-profit didn’t proceed with the divestiture.
However, Mr. Basiri had a backup plan, hatched last year. On Tuesday, that plan bore fruit as ETS announced in a release that Passage would be its “exclusive strategic AI and technology partner to extend the reach and utility of TOEFL and GRE within the education system.”
There’s one catch: Passage’s new plan looks a lot like what ApplyBoard, now led by Mr. Basiri’s younger brother Meti Basiri, already does. “In the early days, I would have said no,” Passage isn’t a competitor to ApplyBoard, Meti said in an interview. But now, “Yeah, I would categorize it as one of our competitors.”
Passage has developed a suite of AI agents that it calls Jackie, David and Ella, which it sells to universities and colleges. Jackie is a virtual counsellor that guides prospective students to apply to the right programs, answers their questions, walks them through applications and identifies scholarship opportunities, with around-the-clock, multilingual support.
David is Passage’s process controller, ensuring applications are complete with all required and validated documents, including English tests, passports and bank letters. It also detects fraud. Ella, meanwhile, is a virtual video interviewer that assesses skills and qualifications of applicants and produces structured evaluations for reviewers.
ETS stated that by combining its testing with Passage’s “advanced AI processing, matching and engagement capabilities, the partnership will help institutions more effectively identify and connect with best-fit students at scale. Students will gain a faster, more transparent path from discovery to enrollment.”
ApplyBoard also offers automated tools that streamline the application process for foreign students applying for postsecondary education. It has 1,500 institutional clients in Canada, the U.S., Australia, Germany, Ireland and Britain, and its shareholders include Ontario Teachers’ Pension Plan, Fidelity and Caisse de dépôt et placement du Québec. Like Passage, it matches students and schools and has leaned heavily into AI.
Asked if Passage competes with ApplyBoard, Martin acknowledged “from trying to make the application processing and the process of going to universities easier, it’s kind of similar.”
Meti noted that while his brother remains an ApplyBoard shareholder, he isn’t on the board, nor does he have access “to any information that could harm or disadvantage” the company. Many past employees have worked for competitors, and “we’ve had many competitors that have come and gone,” he added. “I don’t necessarily lose sleep over the next new competition.”
Besides, there are notable differences between the two, Martin said. ApplyBoard’s business was overwhelmingly concentrated in Canada until 2023 (its home country still accounts for close to 40 per cent of revenues) while Passage is “not about immigration to Canada. This is a global play.” While Applyboard focuses on streamlining applications, “one of the biggest things we do at Passage is assessment,” he said.
Both businesses operate in a challenged sector because of increasingly negative sentiments toward immigration in some markets and spending pressures across postsecondary institutions. ApplyBoard revenues have dropped to under $200-million from north of $250-million in 2023, and it has cut its employee ranks by 60 per cent from peak levels, to 600 people, although the business remains well capitalized and has been experiencing a pickup in bookings, Meti said.
The testing industry has also been challenged since some universities during the pandemic made graduate exams optional. Online language skills service Duolingo also offers a competitor to the TOEFL that students can take at home, rather than in a testing facility.
The brothers also share a mission of reducing barriers to mobility by international students, which they experienced when they came to Canada in the early 2010s.
“Are we in the same industry trying to solve human access for the benefit of students? Yes,” said Martin. “Does the growth of one company mean the other won’t grow? Absolutely not. It’s not a zero-sum game. The industry is so big that the growth of one company is not taking away from the other.”