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Dive Brief:
- ClassWallet, a digital wallet that allows purchasing and reimbursement services for public funds, finished raising $95 million last week, according to an Aug. 15 press release.
- Guidepost Growth Equity led the funding round with participation from Education Growth Partners and Lazard Family Office Partners, per the press release.
- The funding will support the company’s ongoing growth in enabling government agencies, particularly those in education, to digitally manage their finances. ClassWallet supports government agencies across 32 states in reducing fraud, tracking expenses and ensuring compliance, the Aug. 15 release said.
Dive Insight:
The Hollywood, Florida-based digital wallet startup provides services that let state agencies and school districts better manage their public funds by aiding them in disbursements.
ClassWallet’s latest funding round builds on prior financial support from Guidepost Growth Equity, which invested in the company earlier this year as well. This round is the company’s “first institutional growth capital funding,” according to the release.
Guidepost made another investment in this latest round to help ClassWallet expand its reach in the public fund management market, Gene Nogi, Guidepost General partner, noted in a statement. “By adopting ClassWallet, state agencies no longer have to struggle with the cumbersome, manual processes that have plagued public fund distribution,” Nogi said in the release.
In recent years, ClassWallet has landed contracts with more government agencies. Last year, the company signed deals with the Missouri Department of Elementary and Secondary Education, the Missouri State Treasurer’s Office, the Georgia Department of Education and the Minnesota Department of Education. This year, the company entered into a contract with the Virginia Department of Education and the Georgia Department of Early Care and Learning, according to announcements on its website.
Compliance in managing money for government programs is difficult and is often the cause of those programs stagnating, ClassWallet founder and CEO Jamie Rosenberg contended in the release. State governors and policymakers fund programs based on their perception of demand, but then find months or years later that funds were unspent due to compliance-related bureaucracy, he argued.
“There are significant complexities to ensuring public funds reach the right people and are used for the right purpose,” Rosenberg said. “ClassWallet is solving this problem.”
ClassWallet has enlisted major retailers to sell their goods and services, such as lesson plans, furniture, toys and software, to its public institution clients by way of its e-commerce platform.
Those retailers include Office Depot, Amazon, Home Depot, Staples and Michaels, according to its latest funding round announcement. In July, ClassWallet added Best Buy to that e-commerce marketplace, according to a press release at that time.
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