Fast-growing Montreal startup Paper raises US $ 100 million in SMS tutoring offer


Phil Cutler, CEO of Paper, Canada’s fastest growing software company, for tutoring kids examines their interface while working in Mont Tremblant, Que. On June 29, 2021.

Christinne Muschi / The Globe and Mail

A Montreal-based company that has become one of Canada’s fastest growing startups using instant messaging for student tutors has raised US $ 100 million, led by Silicon Valley venture capital giant IVP.

Paper Education Co. Inc. has been in the online private tutoring market for only three school years, but already has 100 US school districts as customers and is available to one million students. Paper says it is on track to hit $ 50 million in annualized revenue in 2021, up from less than $ 1 million in early 2019. Before the pandemic, the company had 100 guardians and 30 other employees; it now has 1,000 tutors and 130 employees.

“It’s not just good growth for an educational technology company or a Canadian company, it’s incredible growth for any company anywhere in any industry,” said Tom Loverro, general partner of IVP, which previously supported Coinbase, Netflix and Twitter. “Their growth shows the need for this product. If they can bring that to every public school district in America “- there are about 13,500 -” that could be a really big market. “

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Paper aims to transform tutoring by making the service fair and accessible to any student, who often needs help around the clock. The company does not sell to parents, but to school districts, who pay between $ 50 and $ 100. US per student per year. It is available free to students in English, Spanish, French and Mandarin, covering 200 subjects.

“I was always embarrassed that it was the students who could afford tutors who would use tutors,” said Cassie Parham, deputy superintendent of the Irvine Unified School District, a client of Paper with 42 schools near. from Los Angeles. “I like the idea of ​​providing tutors for free,” she said, praising Paper for the quality of its tutoring, accessibility and responsiveness. “There aren’t many companies that I would embark on an adventure for and support. Paper is one of them.

Philip Cutler, President and CEO of Paper, 32, grew up in privilege in Westmount, Quebec, the son of a real estate developer and owner of an art gallery. Her grandfather was a judge and her grandmother was May Cutler, author, former mayor of Westmount and founder of Tundra Books, which published The hockey jersey. Mr. Cutler attended private school and played football at McGill, where he earned a degree in education. In his twenties, he started summer camp and was elected to the Westmount council.

Despite his comfortable situation, Mr. Cutler was struck by inequalities in the classroom when he began teaching at two schools in Westmount. Only the wealthiest students got private tutoring, but “rarely the students who needed the help the most” got it, he said.

He also knew from his tutoring experiences that the process was ineffective. Students may only need a few minutes of help in a one-hour session. Or they might need more than an hour, or help when it wasn’t available. So he left teaching to start Paper, initially called GradeSlam, with developer Roberto Cipriani, the company’s chief technology officer. They ran the company through a local accelerator to test whether students would respond well to text tutoring, which they did.

The service uses the Socratic teaching method, which means that the tutors do not provide answers but invite the students to find them themselves. Rather than sitting down with one student at a time for fixed sessions, tutors manage four to five simultaneously and are available on request. Paper uses artificial intelligence to match students and the best available tutors, and to predict optimal staffing levels based on demand. “We have eliminated a lot of inefficiencies; it allowed us to pass those savings on, ”Cutler said.

The paper also allows students to perform first drafts of essays by tutors. Teachers can monitor all interactions between students and tutors.

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Paper has spotted school districts that were early adopters of the technology, but found no takers in Canada, which Cutler calls “disappointing … but we need to focus on who wants to work with us.”

That turned out to be the districts in California – which represent 75% of Paper’s customers – starting with the Laguna Beach Unified School District. “The first time I saw [Paper] I was like ‘why didn’t I think about it,’ says Michael Morrison, district technology director. In a neighborhood of 3,000 students, users registered a total of 1,470 times last year, which is higher than expected. Laguna Beach also referred other local districts to Paper.

Mr Morrison attributed Paper’s success to a pent-up demand for fair tutoring, as well as the flow of US federal funding to schools to help them scale up their digital learning efforts, especially during the pandemic. “I know a lot of used quarters [federal funds] to do it, ”he said.

The funding was also backed by former investors Framework Venture Partners, Bullpen Capital, Reach Capital, Birchmere Ventures, Salesforce Ventures and BDC Capital.

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