The pandemic was a boon for Paper. In the two years since COVID-19 forced school closures across North America, the Montreal-based edtech company, which offers remote tutoring services for students, saw its user base increase from roughly 50,000 to more than two million, according to CEO Philip Cutler.

Investors took notice. In June 2021 Paper raised US$100 million in a Series C fundraising round led by IVP, followed eight months later by a $344 million round co-led by global tech investment giant SoftBank, famous for backing the likes of WeWork and Uber. 

Paper sells subscriptions to its platform directly to school districts, who pay an annual license fee per user. While its headquarters are in Canada and its tutors are based across North America, its customers are mainly school districts in the U.S.

In an interview this summer, Cutler discussed the company’s next steps, including expanded offerings that could include guidance counseling and college advising, its plans for acquisitions and its efforts to do more business in its home country. This interview has been edited for length and clarity.

You raised a big round of funding earlier this year. What are your plans for that money?

Part of the capital raise [is] focused on continuing to evolve education, and ultimately provide solutions that are better than what exists today in our schools. That takes lots of cash to build. We’re not a business that burns a ton of cash, to be honest. So a lot of it goes into the R&D, into innovation. We’re also looking at some potential acquisitions. A lot of really, really cool educational solutions exist out there. They on their own may not be that interesting. But you integrate that into Paper’s platform with millions of students and the access distribution we have, all of a sudden, you actually have something that could be really valuable.

What kinds of companies might be interesting for potential acquisition?

There’s probably two groups that we think of. One would be sort of horizontal offerings to what we currently do. Our main offering is academic support. Our goal is to build student confidence. There’s a lot that goes into that; mental health support is really, really important. College guidance counseling. College and career readiness in general is really interesting. After-school and weekend programming—things that school districts historically have not really been able to efficiently support their communities in.

What’s it been like having SoftBank as an investor?

One of the things that’s very nice about working with a fund like Softbank is global exposure. They really do know edtech. They’ve made a number of education investments internationally, so they see a lot of trends across the world. And that’s something that you’re not going to necessarily get from other investors. They have this global exposure that is really valuable for a business like us. They also get a lot of deal flow. So they see a lot of companies, [and] what’s happening in the market. They can really help us understand what’s happening from an M&A perspective, like, where is money flowing.

What are your expansion plans for new markets?

Right now, we’re definitely focused on the U.S. domestic market. We’ve got about two million students out of 60 million K-12, so a lot of opportunity to grow there. We think that there’s even more opportunity to expand our offerings within our existing customer base. International expansion is going to happen organically. But we’re not even in Canada. It doesn’t make sense. We should be in Canada. So that’s something that I think will come, hopefully sooner than later. 

Also, our platform’s available in English, French, Spanish and Mandarin. So Latin American countries, for us to move into those markets, it’s very natural. I think a lot of it is going to happen in an organic way. They’re going to see the success that we’re having in the U.S. market, they’re going to see the success we’re having in some of these high Spanish-speaking populations in the U.S.

Would you like to expand more in Canada?

You know, we tried. I’m not sure why it hasn’t stuck yet. I think a big part of it is technology adoption in schools just lags the U.S. We had conversations with a lot of the biggest school districts, and there’s a little bit more reluctancy. I actually think it’s harmful for the students. We have a solution that allows people to get access 24/7 to live support. And it’s just not picking up steam north of the border. Hopefully, it’s going to happen. I’m confident it will. But we go to where the market wants.

With the tech downturn, has there been pressure to reduce your burn and get to profitability more quickly?

The conversation is happening more often, not just within Paper, but within my network of CEOs. We talk about this stuff a lot more. I think it’s on people’s minds. As a business, we’ve always been very prudent about how we spend our money, how we invest every dollar of our investors’ capital that we bring in. We’ve never really been a business that has gone above and beyond our burn, so there weren’t a ton of ways for us to say, “Hey, we’re obviously spending money and we need to cut here.” There wasn’t a ton of pressure from that perspective. 

From a planning perspective, it’s very important to start thinking about, “Do we want to get to profitability sooner than we had anticipated? What does that look like?” We want to take control of our own destiny, as opposed to having to rely on funding rounds every 12 months.

How’s it been running the company from Montreal? With most of your employees based outside the city, would you consider moving the business closer to where your customers are?

Pre-pandemic, we were all in-office. We had an office in Montreal, about 25 employees. We had an office in Santa Monica with about five or six employees. Pandemic hits, everybody goes remote. And we have no idea how long this is going to last, what that’s gonna look like. And we saw the opportunity, we knew we’re gonna grow pretty quickly. So the question was, what do we do? We didn’t really hire for the first couple months. It was still chaos. March, April was wild. We started recruiting, because we’re anticipating growing.

We said, “Well, are we comfortable hiring all these employees without ever meeting them?” Well, whether we’re comfortable with it or not, it’s what we have to do. So we’re gonna have to get ourselves comfortable with it. We saw it as an opportunity to go and find the best people independent of where they were geographically. So now our team is just distributed, and it’s hard to go back from that. We grew from 30 to 500 employees. We still have 70, 75 in Montreal, it’s still the city with the highest population of Paperheads. But we’ve got folks literally everywhere.