EdTech Investment: SaaS Guidance Counselors Attract Funding

ApplyBoard Achieves Significant Valuation Increase

ApplyBoard, a company specializing in assisting international students with study abroad opportunities, has recently announced a substantial increase in its valuation. In just over a year, the company’s worth has nearly doubled.

The Ontario-based organization is currently valued at approximately $3.2 billion. This valuation follows a successful $300 million Series D funding round, spearheaded by the Ontario Teachers’ Pension Plan Board.

Revenue Model and Growth

ApplyBoard generates revenue through collaborative agreements with colleges and universities. A percentage of tuition is received by ApplyBoard when a student enrolls at an institution after utilizing their platform.

Importantly, the services offered to students – encompassing school search and application assistance – are provided without charge.

While specific revenue details were not disclosed by co-founder and CEO Martin Basiri, he verified a remarkable 400% year-over-year sales growth rate for 2021.

To provide perspective, ApplyBoard’s sales reached $300 million in 2019. This indicates that the company is currently generating at least $1.2 billion in sales this year.

Challenging Edtech Assumptions

These financial results challenge the previously dominant narrative within the edtech sector from the previous year.

The notion that higher education is declining! Students are losing interest in traditional college attendance! The gap year should be embraced as a permanent alternative! is being actively refuted.

The Value of University Support Systems

ApplyBoard’s success demonstrates the considerable profitability of the university technology infrastructure, particularly when considering aspects beyond mere content delivery.

Back-end marketing support plays a crucial role in this profitability.

Future Investment Trends

It is anticipated that startups focused on streamlining the institutional processes for students, thereby maximizing the value of their education, will attract increasing investor attention.

This trend is likely to be fueled by growing consumer demand for personalized and virtual learning experiences.

Investor focus may shift towards companies facilitating a smoother educational journey.

“Students desire a streamlined and uncomplicated application experience”

Recent capital raising activities by ApplyBoard highlight the company’s strategy to evolve into a technologically advanced educational advisor for the roughly 200,000 students it has assisted thus far.

In September, the company secured a $55 million extension to its funding round, welcoming Education Testing Services (ETS) Strategy Capital as a partner. ETS Strategy Capital represents the venture investment division of the world’s leading nonprofit educational testing and assessment organization.

This alignment prompted ApplyBoard to introduce ApplyProof, a service designed to aid admissions and immigration officials in verifying the documentation international students require for college applications globally. The current funding round similarly introduces a strategic investor, the Ontario Teachers’ Pension Plan.

Basiri stated that demand remains substantial even after the pandemic, with a significant, accumulated desire among students to pursue studies abroad. He emphasized that students seek an application process that is both seamless and effortless, alongside access to comprehensive information for well-informed decisions.

The executive cited two key trends supporting this observation. Firstly, students are increasingly seeking more affordable educational programs due to financial difficulties stemming from COVID-19, demonstrating the importance of options when choosing a college. Secondly, there was a 300% increase in international applications to U.S. universities compared to April 2020, indicating sustained interest. The company is actively expanding its operations in key destination countries, including the United States, the United Kingdom, and Australia.

While ApplyBoard offers a user-facing service connecting students with numerous institutions, another, newer startup aims to further reduce application complexities.

Concourse Global utilizes a matching-style interface, similar to Tinder, for college admissions. Students establish online profiles that are then reviewed by admissions representatives from participating universities, such as Colorado State, the University of Alabama, and the University of La Verne.

A “right swipe” from an admissions office signifies acceptance, and a reciprocal “right swipe” from the student initiates the enrollment procedure. In this manner, the company functions as an extension of a school’s guidance counseling department, assisting high schools in increasing college placement rates by creating a more accessible process, minimizing the risk of students being overlooked.

Concourse CEO Joe Morrison, in a February interview, described the conventional admissions process as “a massive assembly line that is both slow and difficult to manage.” Although Concourse’s operational details are more intricate, its existence suggests that universities may be approaching a more agile and targeted method for student enrollment.

He noted that “Ivy League institutions already benefit from ample resources; a dedicated ecosystem and marketplace often exists with tailored, specialized admissions procedures.” He continued, “For the vast majority of students not attending an Ivy League school, enhanced support beyond a standard website is essential.”

Leading Referral Platforms

Career Karma represents another emerging company within this growing industry, distinguished by its focus on building a strong community. Established in 2018 by Ruben Harris, Artur Meyster, and Timur Meyster, the company takes a unique approach to career advancement.

Rather than developing its own training programs, Career Karma assists students in identifying suitable bootcamps that align with their budgetary constraints and professional aspirations.

By functioning as a primary referral source, Career Karma avoids direct competition with numerous bootcamps. Its revenue model, much like Stackin, centers on successfully enrolling students in bootcamps that best suit their career objectives and financial circumstances.

To provide ongoing support, Career Karma organizes coders into small, collaborative mentorship groups known as Squads. These groups offer assistance throughout the program and during the subsequent job search.

This feature enables the company to cultivate extended relationships with students, evolving from a simple connector to a more sustained mentoring resource.

RaiseMe, which was acquired by CampusLogic last year, adopts a similar strategy by partnering with students throughout their educational journey. Founded in 2012, RaiseMe supports low-income and first-generation students by offering micro-scholarships earned during high school.

Students can accumulate funds for tuition through activities such as volunteering or achieving strong academic results. The company has also introduced an AI-driven digital assistant to simplify the financial aid application process.

Over 2 million students nationwide have utilized RaiseMe to secure financial assistance. Distinguishing itself from other companies in this sector, RaiseMe fosters ambition and financial literacy in students, with college exploration as an integrated component.

Universities with Lower Rankings are Adopting Digital Approaches

James Kim, currently a partner at Reach Capital with a background as a college admissions officer, nonprofit leader, and high school mathematics educator, believes that the future of higher education remains uncertain.

He explained that the majority of colleges and universities rely heavily on tuition revenue. They are currently navigating a challenging situation involving a consistent decline in the number of traditional college-aged students, coupled with growing doubts regarding the value of a conventional higher education.

This predicament, according to Kim, has fueled the emergence of startups that claim to offer a new avenue for attracting students that these institutions might not typically reach. These companies can assist domestic universities in expanding their global visibility, or aid less prominent colleges in enhancing brand recognition among demographics who may be unfamiliar with them.

“Given that Generation Z spends a significant amount of time on digital platforms and social media, it seems logical for enrollment officers at universities with lower rankings to investigate digital strategies,” he stated.

Despite the apparent logic of this approach, numerous college placement startups have failed. Kim attributes this to a flawed premise held by many: the belief that students choose a school based on personality fit or academic major, rather than institutional ranking. Data on college enrollment patterns demonstrate that students generally opt for the highest-ranked school to which they are admitted.

A simple application that matches students with opportunities through brief questionnaires and occasional content updates may not be sufficient to capture their attention.

“Our observations indicate that such an experience isn't compelling enough to encourage students to dedicate significant time, or even download and utilize the application,” Kim noted. “Without substantial student engagement, there is limited value to offer universities that they couldn't achieve independently or through resources like Niche.com or College Board publications.”

Simply offering placement services isn't particularly innovative or easily protected as a viable business model. ApplyBoard expanded into student verification and financial counseling; Concourse overhauled the admissions process; Career Karma focused on building a community; and RaiseMe incorporated financial incentives to attract students.

The evolution of these platforms indicates a shift in how higher education perceives students, recognizing them as more diverse, unconventional, and time-constrained than previously assumed.