Melbourne-based edtech startup Compass Education has bagged $60 million in funding, after bootstrapping for eight years, and now looks to expand throughout Australia and beyond with the investment.
According to the report by StartupSmart, the funding round was closed in August last year, however, due to no media circus and no announcement, the news about the funding came to light only recently.
Compass was officially incorporated in 2010 by John de la Motte and Lucas Filer after they noticed “an identifiable gap” in the education technology space, according to the report. Motte says the startup was bootstrapped up until last year, though its business has been profitable every year since founding. However, the report said, at the end of last year, that growth story paid off when the startup secured a massive $60 million investment from private equity firm Advent Partners.
Compass now provides a one-stop shop for school management, providing a platform to make life as easy as possible for teachers in house, and to allow for easy communication with parents. Having started out in three schools, the startup is now in 1800, and has passed the milestone of two million users.
Since receiving the investment last year, Compass has opened offices in Brisbane, Sydney and Dublin. The startup is also planning on opening in Perth in the next four or five weeks. Compass has also signed its first flagship school in Canada. Its co-founder de la Motte sees the startup having a presence in the UK and the US as well in the next few years.
Commenting on the investment, how the startup was up until last year and how it wants to be in future, de la Motte said,
“That decision to take on investment after eight years of bootstrapping was very much an acceleration piece. We’ve gone on a hiring blitz. Up until 2018, the business didn’t have a sales or marketing team, achieving organic growth largely through word-of-mouth. We still want to be a company that is driven by the organic nature of sales. We needed to build out the product space ... and we also needed to be able to put people locally across different geographies.”
But do you know how Compass was in the initial years?
Initially, Compass was built as a system to remove the administrative burden on teachers, and to improve the home-school relationship. At the time, Software-as-a-Service was still a relatively new concept, and so the startup faced the challenge of explaining to schools why they should be paying for tech on a license basis. “There was a bit of uncertainty around this being the model,” explains de la Motte. StartupSmart reported that the founders spent a few years focusing on explaining the benefits of such a system, and eventually discovered the value of selling the platform’s security. “Compass is security compliant to the same standard as the big banks in Australia. That was a key part for us,” de la Motte was quoted as saying.
And why the news of funding came to light only recently?
Although the funding round was closed in August 2018, StartupSmart reported there were no media circus, no announcement, and no inclusion in December’s biggest-raise wrap-ups. The report further mentioned, it is due to the fact that Compass has never had a marketing team, let alone a PR team. It seems even three or four years ago, the startup’s website was a single page with just a phone number. “It didn’t even say that we were a school management company,” de la Motte was quoted as saying.
On why the startup didn’t raise capital in the initial years, the co-founders are said to have opted to focus on developing the core of the platform. “If we had gone down the path of an early cap raise ... I think it would have been a distraction from what we wanted to build."