Dive Brief:
- Ocelot, a texting and chatbot company for higher education institutions, announced Wednesday that it has raised $117 million from K1 Investment Management, which focuses on funding software firms.
- Before K1’s investment, Ocelot had not taken outside funding. The investment will be used to fuel growth, develop new services for colleges and improve existing products.
- The investment comes a few years after Ocelot pivoted toward using artificial intelligence to create chatbots and texting services for students. Before that, Ocelot got its start by creating financial aid publications and videos for colleges.
Dive Insight:
The large investment comes at a time when ed tech funding is slowing down. Ed tech companies are expected to finish the year with around $17.4 billion in venture funding, down from about $20.8 billion last year, according to a recent estimate from HolonIQ, a market analysis firm.
"K1 has deep experience investing in EdTech and we are empathetic to what universities and students experienced during pandemic-related shutdowns the last few years," Brian Beard, vice president at K1, said in an emailed statement. "We strongly believe in supporting as many students as possible and Ocelot’s platform enables all students to navigate university systems."
Ocelot has shifted its focus throughout its two decades. Today, the company is focused on texting and chatbot services powered by AI. Colleges can use the company’s platform in several ways, including informing students about their financial aid options, contacting them about important deadlines or connecting them to live advisers.
The platform offers two-way texting with students, along with chatbots that integrate with college systems. The company counts more than 500 institutions as clients, including the University of Florida and the University of California, Los Angeles.
“We’re proud of how we have grown in the past 20 years to become a communications leader and a platform, and it’s worked very well,” said Talin Andonians, Ocelot’s CEO. “We’ve been able to fuel our growth with our own internal cash flow. This funding allows us to accelerate that growth.”
Ocelot is already focused on student support, including financial aid, enrollment and admissions. But Andonians said there is more work to do “across the student lifecycle.”
The investment comes at a time when enrollment is falling across higher education. The number of students taking classes has fallen around 7.4% since the pandemic began, representing about 1.3 million people, according to the latest figures from the National Student Clearinghouse Research Center.
“The pain continues to exist, and we will need more innovation in the future,” Andonians said. “We are positioned really well to do that and to continue to serve the market.”
