Private equity firms can be ruthlessly quick and efficient in their quest to maximize profitability. So it’s no surprise that Hero K12, which recently received $150 million from BV Investment Partners with explicit marching orders to buy assets, has started splurging.
The Miami Lakes, Fla.-based company’s first acquisition is SchoolMint, a San Francisco-based developer of a mobile and web-based platform to help parents and districts manage the school application and enrollment process. Terms of the deal were not disclosed.
Hero K12’s flagship products include attendance, communication and behavioral management tools that it touts can help educators reinforce a positive school culture. Now it is actively looking to add other assets that capture data on the “student journey,” and help districts improve their backend operational efficiencies, says Oliver Wreford, the company’s chief product and strategy officer.
The company’s intention with its $150 million pot are clear. “We want to take the capital and deploy it on a platform that creates integrated administrative solutions,” says Wreford, “one that can help better connect student data and processes to create safer, more connected school environments.”
That student data trail, in Wreford’s eyes, starts with enrollment tools like SchoolMint’s. “That’s when communication starts and information is exchanged,” he adds. “It was a very logical starting point for us to expand our platform.”
Conversations between the two companies started “way before [Hero K12] announced the $150 million deal” in June, says Jinal Jhaveri, SchoolMint’s co-founder and CEO, who started the company when he and his wife (who is the COO) were frustrated after trying to find and enroll their daughter in preschool.
In 2013, they launched a tool that aims to help schools manage the entire enrollment process, which typically starts with marketing and outreach, and extends to running lotteries, managing applications and processing payments. SchoolMint’s technology is used by districts like Camden City School District to build “school chooser” websites where parents can fill in their address, select desired extracurricular activities and services and see a result of available schools that fit the criteria.
Already, many districts offer parents some choice as to where to send their kids, Jhaveri notes. Yet “this information is usually only available to families who might be ‘in the know.’” By providing some transparency in the school options available, he argues SchoolMint “levels the playing field in expanding equity and access.”
A graduate of the Imagine K12 accelerator, SchoolMint had raised a total $8 million from education-focused investors including Runa Capital, Reach Capital, Kapor Capital and Fresco Capital.
One key to SchoolMint’s success was the company’s decision to “prioritize a mobile first and multilingual solution (20+ languages) so that families of all backgrounds could quickly and easily enroll their children in school with a few clicks on a smartphone,” noted Reach Capital’s general partner, Shauntel Poulson in a blog post.
SchoolMint claims it serves more than 2 million students across more than 6,000 schools. Roughly 95 percent of those schools are public, Jhaveri shares, and of these, 60 percent are traditional district schools. (The other 40 percent are charters.) With a team of 80 employees, Jhaveri claims SchoolMint was “pretty close” to profitability before the acquisition.
Schoolmint will retain its brand, staff and headquarters. Being part of a bigger company with a big wallet will give his team more resources to grow—and capture a bigger slice of their target U.S. market, which numbers roughly 135,000 schools. Beyond the enrollment process, Jhaveri says his team has plans to add tools to support re-enrollment, field trip forms, and “other things that happen year-round” that require documentation.
There are no immediate plans to integrate SchoolMint’s technology with Hero K12’s offerings—yet. But expect more deals to come from Hero K12, Wreford teases. “We continue to have a lot of conversation and are very optimistic about other assets that help streamline the administrative processes.”
Like Lego-rich children, private equity-backed education companies are hastily assembling pieces to build the next edtech juggernaut. Others embarking on this “platform” strategy include Frontline Education, which has bought 10 companies since 2014. (It recently swapped private equity owners from Insight Venture Partners to Thoma Bravo.)
“We do feel the market is ready for some integrated solutions to help drive better experience and reliability and delivery at scale and cost efficiencies,” says Wreford. He was previously an executive at PowerSchool, which is owned by Vista Equity Partners. That company has purchased eight education companies since June 2015.
From the private equity sector, “there’s a lot more money getting poured in, and for companies that are generating revenue and solving high-impact problems, that bodes well for them,” Jhaveri adds.
