Kitchener-Waterloo startup ApplyBoard has secured a $100-million CAD credit facility to “triple down on growth,” CEO Meti Basiri told BetaKit in an exclusive interview. To do that, the educational technology company will place less emphasis on English-speaking countries.
RBCx, the tech banking and innovation arm of Canada’s largest bank, issued the credit facility to the EdTech startup in the second quarter of 2024, but the company held off the announcement until Sept. 17, Basiri said. Terms of the loan were not disclosed.
“English-speaking countries will continue their fair share [of international recruitment], but the pie itself is getting bigger.”
—ApplyBoard CEO Meti Basiri
“We’re thinking about student mobility and how it’s going to change over the next decade. So how can we set ourselves up for more expansion?” Basiri said of the financing.
Two days after the company announced the financing, media reports indicated the company laid off four percent of its global workforce, which are located in Ontario. On Wednesday, the federal government announced it would implement further reductions and restrictions on international students and post-graduation work permits.
ApplyBoard, which reached Unicorn status during the pandemic, was founded in 2015 by Basiri and his brothers Martin and Massi. Inspired by their experience emigrating from Iran to study in Canada, the trio launched an artificial intelligence-enabled software platform that helps international students apply to more than 1,500 post-secondary institutions across Canada, the United States, United Kingdom, Ireland, and Australia.
Tony Barkett, head of banking and capital at RBCx, said when he partners with tech companies, he looks for disruptive technologies that are “defensible,” a growth story and revenue trajectory, and a strong management team. If the company is backed by venture capital he looks at the investor group.
“If I take that idea and put it on the lens of ApplyBoard, they’re positioned very well,” Barkett said in an interview. “They’re at a size and scale in Canada that is only matched by a handful of other companies. There’s not a lot of Unicorns in Canada.”
Since its $375 million CAD Series D round in 2021, ApplyBoard has expanded its product offerings to cater to the needs of international students. In May, it partnered with TD Bank to allow users to open guaranteed investment certificates through its platform and accrue interest before landing in Canada (ApplyBoard also has a deal with RBC to offer GICs). A month later, it launched a GPT-based AI chatbot agent called Abbie that provides support and guidance about any step of the post-secondary application process in any language.
Basiri said the company will use the $100 million CAD to expand beyond English-speaking countries to 20 new destinations, with a particular eye on bringing European and Asian schools to the platform by 2030. Currently, ApplyBoard has beta launched in Germany with plans to bring it fully online by early next year. Within two years, the company plans to add another 10 countries to the platform.
The debt facility could also be used for future mergers and acquisitions, Basiri mentioned briefly, but he said the focus is on research and development and growth.
ApplyBoard is targeting non-English-speaking markets because those countries are realizing the advantages international students bring to their economy, the CEO said. What’s more, countries in Europe are facing population declines and one possible solution to solving the crisis is by bringing in international students, he said.
“You bring someone into your country, they get a degree from your school and you embed them into your workforce. They become far more successful than immigrants with foreign credentials,” Basiri said, adding that countries like Japan, Korea, Italy, and France are increasingly warming up to bringing in more international students.
“English-speaking countries will continue their fair share [of international recruitment], but the pie itself is getting bigger, so new players will have bigger portions of [it],” he said.
The focus abroad comes as the need for ApplyBoard’s services lessens at home. At the beginning of the year, the Canadian government announced a cap on student visas, citing increased pressure on housing, healthcare and other services. Basiri said the move negatively impacted ApplyBoard’s Canadian business, but the company is focused on its international expansion.
According to an ApplyBoard report, the number of new study permit applications processed by the federal government dropped 54 percent in Q2 this year compared to the same period in 2023. The report projects that the number of applications will drop 47 percent from 436,600 approved last year to just over 231,000 in 2024.
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“What we would have maybe achieved in 10 years, now we’re going to achieve it in six years. So there is always upside and opportunities in any of these challenges,” he said.
Currently, ApplyBoard generates revenue from the schools on its platform and test providers, such as ones that offer language proficiency certifications. Long-term, Basiri said he wants the company to evolve into a platform that helps international students beyond their post-secondary applications, such as helping them decide where they will bank or find accommodations. He also mentioned the possibility of one day helping students get their mortgages through the ApplyBoard platform.
Whether ApplyBoard gets there by raising another equity funding round or going public, Basiri didn’t say. For now, he’s satisfied with where the company is at and its trajectory.
“We have a huge run rate and we don’t have challenges,” he said. “We’re focusing on the next phase of our work.”
Feature image courtesy ApplyBoard.