Amy Jenkins left her post at Outschool, a marketplace for live online classes for kids, when the company decided to focus more on consumers and less on the enterprise — a shift that included numerous rounds of layoffs at the richly backed education unicorn.
Now, Jenkins is the COO of Meadow, a platform that aims to make it easier for college students to pay tuition and for universities to stay compliant with financial transparency requirements. Meadow recently announced that it raised $3.5 million in venture funding — a round that Jenkins said, to her surprise, came together pretty quickly over six weeks. Plus, the round was three times the size of the founding team’s original target.
Part of the startup’s win may have been in the framing of its vision beyond traditional edtech.
“I think a lot of our investors would look at us as an edtech company that is in the higher education space, and that there’s an incredible opportunity there to think about,” Jenkins said. “When students are entering college, they’re really at the beginning of their financial life. And we can support them and prepare them from the beginning.” The company’s early products help students better calculate the cost of attending college, balancing different factors like housing and financial aid.
Jenkins said that being a hybrid company, toeing the line between edtech and fintech, did help with closing investors. Many of Meadow’s investors cut checks in the fintech space, “but also consumer, and also social impact — so we were able to hit all of those themes for these investors in terms of high potential working in this fintech space but really having a consumer lens because we’re thinking so deeply about what students need.”
Meadow isn’t alone in balancing two sectors as a competitive advantage in fundraising: Once-crypto-specific companies are shifting their pitch to be more fintech-focused, and some health tech companies are leaning on well-known financial instruments as a disruptor. “Every company is a fintech company” is a common adage, but in today’s environment, the reasoning behind that shift may be more around survival and savviness than serendipity.
Take Ankur Nagpal, for example, who recently launched Ocho. At its core, the company wants to reinvent personal finances through fintech tooling and educational material. The company launched with the former, only to bring in the latter recently. Nagpal told me that most of Ocho’s edtech product is largely being built by part-time staff and non-employee experts — he’s focused on scaling it slowly.
He added that Ocho isn’t putting much money behind paid marketing for at least the first few years so as to avoid the mistake other startups made around acquiring customers for “unsustainable amounts” of cash.
Edtech and fintech have mixed in the past — a good example is NerdWallet, a recently public personal finance platform that offers product recommendations atop a high-margin content business. But the industry wants to do more than tout credit card recommendations or make money off of referral fees; an edtech-meets-fintech boom in 2023 could be an opportunity to focus more on reimagining personal finance tools, top of mind amid a downturn and, ideally, rooted in transparency following a crypto backlash.
Parthean founder Arman Hezarkhani, who is building a personal finance platform, doesn’t buy it. He notes that edtech has suffered from fundraising difficulties because of individual issues within each of its subsectors, whether it’s engagement struggles with DTC edtech or slow sales cycles for K-12.
“I don’t think edtech companies will have an easier time raising money by slapping ‘fintech’ on their decks. We’re towards the end of a fintech cycle that’s claimed a lot of company deaths, so investors have become aware of unsustainable CACs and that’s decreased their appetite,” he said. “So without a well-thought-out GTM, fintech is just as bad as edtech.”
He added, “Both sectors suffer from urgency, though. So pushing unique ‘why now’ value props are how folks will break out if they choose to use this model and, in turn, most companies will die for not having that.”
Five months ago, I asked top edtech investors which sectors they see edtech overlapping in an opportune way. Unsurprisingly, I heard specific excitement around futuristic opportunities in web3, climate and gaming.
Months later, though, it’s clear that the present may look closer to the more established finance sector.
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