Isaac, a platform that modernizes private schools’ financial operations in Brazil, has raised $125 million in Series B funding. General Atlantic led the round.
isaac, an all-in-one platform that offers schools a suite of services including payments, financial products, software, and communication tools to simplify school management, announced that it has raised US$125M in Series B funding, led by existing investor General Atlantic, a leading global growth equity firm. SoftBank and existing investor Kaszek also participated in the round. isaac’s mission is to enable school operators to invest their time and funds on their top priority: providing high-quality education to millions of Brazilian students.
isaac was founded in 2020 by David Peixoto and Ricardo Sales, lifelong friends that met in high school and have partnered in education endeavors twice before. In 2011, they founded Primeira Chance, an NGO that supports talented students from low-income families getting admitted to and succeeding at top high schools and colleges. Later in 2014, David joined Arco Educação (NASDAQ:ARCE) and led – as CFO and VP of Business Development – the construction of the largest edtechs in Brazil. Ricardo, who was at General Atlantic at the time, led the investment in the Company and joined the board of directors.
The 10 years spent in the sector allowed the duo to understand school owners main pain points. Between filing paperwork, keeping sound documentation, and maintaining finances, a lot must be done to keep a school running smoothly. School owners spend more than 70% of their time on non-pedagogical and non revenue generating activities.
isaac solves the problem for both schools and parents by bringing together payment and financial services through integrated software. The startup’s first product is a receivables management solution with an embedded revenue guarantee, through which it operationalizes payments and guarantees schools’ revenues. isaac then manages and automates tuition payments receivables, thus eliminating the financial risks for schools and providing a smooth payment experience for parents.
Parents pay tuition installments directly to isaac and at an established date the startup makes a single fixed guaranteed monthly payout to schools even if some parents default. isaac undertakes schools’ collection activities and provides them with cash flow predictability and time savings. Parents are delighted because they can make monthly tuition payments via credit card, Pix — the Brazilian instant payment scheme –, and boleto.
Brazilian schools are inherently a buy-now-pay-later business. School tuition here is paid in an initial down payment (enrollment fee) + 12 monthly installments and schools cannot cancel services from parents who are late in paying during the year. Some parents pay down the enrollment fee but end up delaying installment payments until the end of the academic year when they need to re-enroll their kids. This cash flow instability prevents schools from meeting their financial obligations and making investments such as expanding operations, improving infrastructure or upgrading to modern IT systems”, David Peixoto CEO and Founder points out. “With isaac’s revenue guarantee, schools are relieved of a massive administrative burden and can dependably process payroll on time and carry out improvement projects as scheduled.”
The Series B round will support isaac’s accelerated growth. In less than 12 months the startup has been able to transform the reality of more than 400 schools in 23 states of the country. Today, isaac serves more than 160 thousand students and guarantees over 900M Brazilian reais (~ 140 million USD) in tuition to partner schools.