From ‘Payments Dive’ | Jonathan Berr | Published July 19, 2022
Demand for ClassWallet’s education digital payments tools increased during the coronavirus pandemic, and that rise has continued this year in the company’s signing of new state contracts.
Demand for education technology surged during the coronavirus pandemic, when school districts sought funding to combat “learning loss” students faced when switching from in-person instruction to remote learning, ClassWallet CEO Jamie Rosenberg said.
That unleashed an increase in demand for ClassWallet’s digital payments tools tailored to the educating sphere.
“Given the expediency needed to accomplish those goals, it really brought to light the lack of technology solutions that the school districts and states had in order to achieve that,” the CEO said in a July 18 interview.
In its latest state government contract wins, ClassWallet this month signed separate agreements with the each of the Missouri Department of Elementary and Secondary Education and the Missouri State Treasurer’s Office to “track, report and facilitate the distribution of funds for two educational support programs that will benefit non-public schools and families in the state,” according to a ClassWallet press release.
In May, the company won a contract with the Georgia Department of Education to oversee the distribution of $112 million in federal and state funds. Georgia renewed a separate contract with ClassWallet in April regarding the distribution of $71 million in funds from the federal government’s American Rescue Plan Emergency Assistance to Non-Public Schools (EANS II) program to help non-public schools address the educational disruptions caused by the COVID-19 pandemic.
The company also signed a contract with Minnesota Department of Education in February to distribute up to $55 million in federal funding to “manage the continuing disruptions caused by COVID-19,” according to a ClassWallet press release.
ClassWallet is currently being used by 27 states, 19 state agencies and 6,200 schools serving 4.1 million students. The company manages approximately $150 million in funds for Texas, Oklahoma, Idaho, Arizona, New Hampshire, Georgia and North Carolina.
It offers a variety of wallets, including one that allows teachers to purchase school supplies and another that enables families to pay tuition. Other wallets help districts purchase supplies for maintenance and manage the disbursement of government aid.
ClassWallet’s net revenue tripled for the fiscal year ending July 31, the company said in an October press release last year, without detailing the dollar amount. The company also said it processed $227 million in payments for the period, a nearly threefold increase from the previous year.
The company will perform as well, if not better, in the current fiscal year as the previous one, Rosenberg said, without elaborating.
“What we’ve been able to do is break down that gridlock and let the funds flow with flexibility and with efficiency, reaching the end users,” Rosenberg said.
ClassWallet earns revenue from license fees and transactional revenue. While states are clients in contracts with ClassWallet, those contracts are mutually exclusive from contracts that school districts sign with ClassWallet.
Rosenberg said the company is profitable but he declined to provide specific revenue and net income figures.
ClassWallet moved into a bigger headquarters office last year and opened a new location in Raleigh, North Carolina, where the company’s sales department is based. The company’s current headcount has nearly tripled over last year and now stands at about 143.
“What we’ve been able to see in a much brighter light certainly the last few years is the use of our technology to unlock the gridlock that’s really stopping funds from reaching their intended users,” Rosenberg said.