Montréal-based EdTech startup Paper has closed $123 million CAD ($100 million USD) in Series C financing, as the company looks to scale its educational support software for K-12 students.
“There’s a ton of resources available for the families with means and hardly anything available for everybody else.”
The investment was led by United States venture firm Institutional Venture Partners (IVP), with participation from returning investors Framework Venture Partners, Bullpen Capital, Reach Capital, Birchmere Ventures, Salesforce Ventures, BDC Capital, and ETW.
To date, Paper has raised nearly $150 million CAD ($121 million USD). As part of the deal, Tom Loverro, general partner at IVP, has joined Paper’s board of directors.
The Series C financing is Paper’s third round closed in the last 18 months, and also follows a year of growth for the startup, which has managed to increase its user base 20-fold. With the new funding, Paper is looking to continue scaling its offering to support more stakeholders in the education sector, which has seen dramatic changes since the onset of the COVID-19 pandemic.
Founded in 2014, Paper (formerly known as GradeSlam) offers an educational support system targeted toward K-12 students. The mission of the startup is to provide students with equal opportunity to succeed academically and to help school districts cost-effectively support learning at scale.
Paper’s educational support system provides students with high dosage tutoring, which generally refers to one-on-one tutoring, or tutoring in very small groups, at least three times a week. The startup partners with school districts in Canada and the United States (US) and for a fixed cost, students can access homework help, writing feedback, and study support. Teachers can also personalize tutoring with virtual teaching assistants.
Paper was founded by CEO Philip Cutler, who worked as a teacher in the K-12 school system, and recognized an equity gap in the education system for students that needed help academically.
“I spent a little bit of time analyzing what options were available for these families, and came to the conclusion that there’s a ton of resources available for the families with means and hardly anything available for everybody else,” Cutler told BetaKit.
The COVID-19 pandemic brought a sudden and global shift away from the physical classroom. E-learning and other education technology startups have risen to prominence during this time, as many sought new ways to educate students remotely.
Though the pandemic was a windfall for startups in the EdTech sector, such as Toronto-based Top Hat, it has also highlighted several challenges associated with K-12 remote learning, most notably how students can receive personalized support.
According to a 2020 working paper, the average student will return to school having retained only 63 to 68 percent of learning gains in reading and as little as 37 to 50 percent of learning gains in math compared to a typical year.
Tutoring provides an opportunity to fill that gap and help students better understand and retain information from personalized academic support. The typically high cost of tutoring is generally assumed by parents, particularly those that can afford such services. For those that cannot, students are more likely to fall behind.
Paper seeks to fill this gap. The startup claims to have seen marked growth over the last year, particularly following the major disruptions to education caused by COVID-19.
In 2020, the startup’s user base sat at 50,000 students. Now, Paper claims to have supported more than one million students. The support system is currently used by 100 school districts and the startup has grown its tutor base from 100 to 1,000 tutors. Paper’s corporate team also exploded in the last year, growing from 30 to over 130.
Cutler noted that, unlike many e-learning companies, Paper did not directly benefit from the closure of schools due to the pandemic, and claimed the firm was growing rapidly prior to COVID-19.
What did change, Cutler said, was a surge in investment in hardware and network infrastructure for schools. With the infrastructure in place, Cutler said the next step for schools is to effectively deploy this new technology, which is where Paper has benefited.
The CEO said the pandemic also highlighted the equity gap that exists for students, which Paper is looking to tackle. He noted that Paper aims to make tutoring available not only to the families that can afford it, but all students in a given district.
“This whole idea of being able to support students and do it in an equitable way hasn’t been front and centre,” Cutler said. “Districts have been well aware these gaps exist but they never were forced to really make these changes. Now, with everything that’s gone on, they’ve really invested in it.”
With the new funding, Paper is looking to continue scaling and investing in its educational support system. Cutler plans to keep working collaboratively over the next few months with school districts to ensure each district and student can benefit from Paper’s offering.
“This is a very significant investment in EdTech, especially in the Canadian EdTech ecosystem and in the K-12 Canadian EdTech ecosystem, which is practically unheard of,” Cutler said. “It’s a pretty big step forward and hopefully will inspire a lot of other companies in Canada and even elsewhere to see that you can really build huge transformative businesses in education.”
Image source Unsplash. Photo by Giovanni Gagliardi.