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Salesforce Ventures 1also participated in the financing, along with existing backers Allen & Company LLC and former AOL CEO and chairman Tim Armstrong. The latest raise is more than triple the $9.8 million raised by Pittsburgh, Pennsylvania-based Niche in its Series A and B rounds combined.
Founded in 2002 by Carnegie Mellon graduate Luke Skurman, Niche’s original name was College Prowler. The company rebranded to Niche.com (Niche for short) in 2013 as a platform aimed at helping people find “the right schools and neighborhoods.”
The company says it “rigorously” analyzes dozens of public data sets and millions of reviews to produce comprehensive rankings, report cards and profiles for every K-12 school, college and neighborhood in the United States. Over time, the site has evolved into more of a platform that matches schools to students. It now claims to be “the go-to recruiting tool for the nation’s education market.”
Currently, Niche’s website and native app feature over 130,000 in-depth profiles on colleges and schools and over 140 million reviews and ratings from students, parents and alumni. The company says it provides “powerful user search tools and resources” to use during the school selection process.
2019 was a good year for the company, according to CEO Skurman. Over that 12-month period, he said, Niche increased its annual recurring revenue by over 100 percent, and its client base by more than 60 percent, year over year. It was also cash-flow positive for the majority of 2019, he said.
“Over the past 12 months, we picked up 600 new clients,” Skurman told Crunchbase News.
Also in 2019, Niche’s platform had over 100 million visits. The company claims that more than one in two college-bound high school seniors are registered on the site. Additionally, during the year, Niche grew its headcount by 60 percent to 70 employees. Today, employee count is up to about 115, according to Skurman. The company plans to also use its new capital in part to do more hiring of product, engineering, marketing and sales talent.
As a two-sided platform, Niche has over 1,400 school clients including Carnegie Mellon University, Harvard Westlake School, Boston University and k12.com. Those schools pay Niche for a suite of services on an annual subscription basis to help them recruit students. Part of the company’s goal with its new capital to “partner” with thousands more schools.
Another way the company makes money is through advertising from companies offering things like student loans, tutoring or test prep, for example.
“We connect people to offers while they’re doing research on schools,” Skurman told me. “Schools can also pay to elevate their brand on our site, but that has no bearing on their grade or rankings.”
The company believes its opportunity to grow is huge.
“In the U.S. alone, we think there’s 40,000 schools we ultimately can be working and partnering with,” Skurman said. “So, from that respect, we’re still in our very early days.”
Modernizing a category
Skurman also points out that, historically, the education sector has underspent on digital offerings. Niche, he said, is helping modernize the category “in a meaningful way” by ultimately helping schools have better results and with efficiency.
“Millenials and Gen Z in particular are mobile first,” Skurman said. “Schools are having to adapt because certain approaches are not always working in the way they had been.”
This is even more crucial considering that due to shelter-in-place orders as a result of the COVID-19 pandemic, millions of students nationwide are doing their classwork exclusively online. School tours also went virtual for the foreseeable future.
In response to COVID-19, Niche says it accelerated the rollout of several new free features to support schools that have been impacted by closures. For example, it is updating its platform to better clarify for students which schools offer online classes and degrees. The company is also giving schools the opportunity to include links to their virtual tours on their site profiles to allow students to virtually explore campus life. Skurman said Niche has also extensively surveyed over 50,000 students and parents to track how school communities and students’ academic progress and college plans are being affected by COVID-19.
Gaddy told Crunchbase News that New York-based Radian only makes a few investments a year, committing a large portion of its fund to each investment. It does that, he said, because it focuses on capital-efficient companies such as Niche “that haven’t overcapitalized the business by raising a ton of money relative to the size and scale of the business.”
“Niche has grown in a very deliberate way since its founding, raising less than $10 million over a long period of time, which aligned well with Radian’s philosophy,” Gaddy added.
Indeed, the company’s Series A round was raised in two tranches in 2004 and totaled $1.2 million. Niche then took a break from fundraising. Its Series B round closed in two tranches starting in 2018.
Radian is also attracted to companies with deep structural advantages, Gaddy said, “that have been steadily built … primarily through unique data, ‘stickiness’ of its tools, or liquidity built on a marketplace.”
Niche, according to Gaddy, has all three.
“Unlike competitors that simply provide lists, either of schools or students,” he noted, “Niche’s platform is a true tool that is used throughout the educational search journey.
Last week, we covered the $30 million raise of another Pennsylvania company, collaborative knowledge management startup Guru, and the rise of Philadelphia’s startup scene. Also, in 2018, I took an in-depth look at Pittsburgh’s startup scene, which you can check out here.
Illustration: Li-Anne Dias
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