Higher education, at its best, aims to be less elitist and more accessible to people from all walks of life. Today, a startup called Ocelot is announcing a big round of funding to build more tools to help in that effort. The company, which provides an AI-based platform to facilitate easier communications between universities and their students around applications for financial aid and other services, has raised $ 117 million, money that it will be investing in expanding its products, which today are already being used by some 8 million students and close to 500 colleges and universities, which in the last year alone have seen some 12 million questions get asked and answered through their Ocelot-based services.
K1 Investment Management, a big name in later-stage SaaS investments, is the sole investor in this round, which is Ocelot’s first-ever outside funding. Prior to this, the Boulder, Colorado-based startup was completely bootstrapped, and as such has been profitable from the start. It’s not disclosing its valuation, nor any other financial terms of the deal.
Ocelot’s rise in academia comes in tandem with a wider growth of customer engagement in the wider world of enterprise.
Engagement has become one of the most important metrics in our digital world because it’s become all too easy for people to lean back, or be totally turned off, in situations where an online / digital experience is either too busy, too complicated, or they simply get too distracted by something else. Measuring and improving engagement have become two of the key ways that businesses understand out how well something is working.
Similar, as more and more services get digitized, an opportunity has opened up for tools to make those services easier to use.
The digital divide in academia is a particularly acute problem, which only grows as universities and colleges get less affordable, and as institutions aim to be more inclusive of people from demographics that might have traditionally be excluded from the halls of higher learning.
Ocelot cites research that notes that among first-generation students, for example, no less than 33% drop out within three years, versus 14% among those coming from non-first-generation families. Of course, why that happens is down to a complex set of reasons, but Ocelot’s bet is that one of the biggest is money. So, better facilities to communicate options to those first-generation students could help close that gap.
Ocelot was founded by Damon Vangelis back in 2003, years before AI, chatbots, and frankly even the concept of “customer engagement” were of any concern to businesses, and but it was nevertheless setting out to fill an engagement and discovery gap that already existed in higher education: getting a college degree costs a lot of money in the US, and while students and their families can always find a route to paying for it, sometimes those roads are not that easy to discover. Ocelot’s first iterations were focused on collating materials for getting aid from schools and other organizations, and making it easier for it to be discoverable.
Talin Andonians, who took over as CEO of Ocelot from Vangelis in 2021, said that this database formed the basis of what turned out to be a useful resource, which grew over time to cover other kinds of services around student applications and registrations. AI and chatbots were a natural progression for bringing in better discovery and easier, first-level customer service-style interactions between students and their institutions.
Today, Ocelot provides a range of services that universities use to manage engagement with their “customers”. They include texting, chatbots, live chat interfaces, video libraries, and counseling interfaces for financial aid offices to better assess student progress against aid awards (known in the industry as SAP, or satisfactory academic progress).
The funding will help not only to expand those tools for financial aid-related interactions, but to potentially bring in more services around that that form the wider universe of how an institution interacts with its student body.
“Ocelot’s platform is critical to improving student retention and enabling successful outcomes for students and universities alike,” said Brian Beard, VP at K1, in a statement. “Helping both parties stay closely connected provides clarity and consistency to an otherwise complex and confusing student experience. We are excited to partner with Ocelot to support its continued growth as the company revolutionizes student engagement and communications. “