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SMS and chatbot company Ocelot raises $117 million

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Dive Card:

  • Ocelot, an SMS and chatbot company for higher education institutions, announced Wednesday that it has raised $117 million from K1 Investment Management, which focuses on funding software companies.
  • Prior to K1’s investment, Ocelot had not taken external funding. The investment will be used to drive growth, develop new services for universities and improve existing products.
  • The investment comes a few years after Ocelot invested in using artificial intelligence to create chatbots and texting services for students. Before that, Ocelot started out creating financial aid publications and videos for colleges.

Dive Insight:

The big investment comes at a time when ed tech funding is slowing. Ed tech companies are expected to end the year with about $17.4 billion in venture funding, down from about $20.8 billion last year, according to a recent estimate from HolonIQ, a market analysis company.

“K1 has deep experience investing in EdTech, and we empathize with what universities and students have experienced during pandemic-related shutdowns in recent years,” Brian Beard, vice president at K1, said in an email. “We strongly believe in supporting as many students as possible and Ocelot’s platform enables all students to navigate university systems.”

Ocelot has changed its focus over its two decades. Today, the company is focused on SMS 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 counselors.

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’ve grown over the past 20 years to become a communications leader and platform, and it’s worked out very well,” said Talin Andonians, Ocelot CEO. “We have been able to drive our growth with our own internal cash flow. This funding enables us to accelerate growth.”

Ocelot is already focused on student support, including financial aid, enrollment and admissions. But Andonians said there is more work to be done “across the entire student life cycle.”

The investment comes at a time when enrollment in higher education is falling. The number of students taking classes has fallen by about 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’re really well positioned to do that and to continue to serve the market.”

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