The money came fast. Perhaps too fast.
In February 2022, Montreal-based Paper—a digital tutoring platform serving American K-12 schools—closed a $270 million Series D that catapulted the company to unicorn status with a $1.2 billion valuation. Sapphire Ventures and SoftBank Vision Fund 2 co-led the round, joined by IVP, Salesforce Ventures, Framework Venture Partners, Bullpen Capital, Reach Capital, BDC Capital, and Red House Education. The financing, which included both primary capital and secondary sales, brought Paper's total raised to roughly C$496 million, according to deal counsel Fasken.
What made the round particularly striking: Paper had raised $100 million just seven months earlier.
That kind of rapid-fire fundraising isn't unusual in venture capital's hotter moments. But the timing here tells a more specific story—one shaped less by typical startup hypergrowth than by an unprecedented surge of federal relief dollars flooding America's public schools. And those dollars came with an expiration date.
A Once-in-a-Generation Spending Spree
By early 2022, U.S. school districts were sitting on billions in Elementary and Secondary School Emergency Relief (ESSER) funds—pandemic aid Congress authorized to help schools recover from COVID-19 disruptions. The catch? Districts faced a September 2024 deadline to obligate the money or risk losing it.
Paper found itself in the right place at precisely the right moment. The company, which offers unlimited 24/7 tutoring through a text-first chat interface, had expanded to serve nearly 2 million students across roughly 30 states. Its team grew 300 percent year-over-year, according to company figures—a blistering pace even in venture-backed EdTech.
Districts from Clark County, Nevada, to Hillsborough County, Florida, to Columbus City Schools in Ohio snapped up contracts for Paper's all-you-can-learn model. Weeks after the Series D closed, Mississippi announced a $10.7 million statewide deal funded entirely through ESSER. The pitch was straightforward: fixed-price licenses, no per-use fees, round-the-clock access to live tutors who respond via messaging apps students already know how to use.
"Digital adoption in education has accelerated the demand for new tools that help close the equity gap," Ram Trichur of SoftBank Investment Advisers said at the time. "Paper is widening access to critical tutoring resources."
It was the kind of statement investors often make—optimistic, mission-driven. What it didn't address: what happens when the stimulus spigot shuts off.
From GradeSlam to Growth Machine
Phil Cutler and Roberto Cipriani founded the company in 2014 as GradeSlam. Cutler, a former teacher, understood the structural problem: students struggling with homework often had nowhere to turn after the final bell. Traditional tutoring, with its premium pricing and scheduling constraints, remained out of reach for most families. Paper's answer was to bundle live tutoring with asynchronous writing feedback, practice exercises, and reading comprehension tools—all delivered through a platform districts could license for flat annual fees.
The company rebranded to Paper in March 2020, raising $7.5 million in the process. Then came the pandemic, which didn't just create an immediate crisis for schools. It also unlocked a torrent of federal funding that made even reluctant superintendents receptive to digital tools they might have otherwise viewed with suspicion.
Paper capitalized aggressively. In June 2021, IVP led a $100 million Series C. Eight months later, the company was back with an even larger round—a reflection of both investor enthusiasm for EdTech and the urgency districts felt to deploy relief funds before deadlines forced their hand.
Rajeev Dham of Sapphire Ventures framed the Series D around Paper's mission of equitable access, a theme that resonated across the funding announcement. The subtext, though, was harder to ignore: investors were betting on a company that had become expert at navigating procurement cycles supercharged by temporary government spending.
What Comes After the Boom
Paper said it would use the capital to accelerate growth and expand operations—typical post-funding language. The real question, one the company didn't answer publicly at the time, was how it planned to sustain momentum once ESSER funds dried up.
The EdTech sector has seen this movie before. Companies that scale rapidly on government contracts or grant-funded programs often struggle when budgets normalize. Some pivot to direct-to-consumer models; others lean harder into adjacent revenue streams. A few simply become cautionary tales about mistaking a temporary tailwind for a permanent market shift.
For Paper, the Series D represented both validation and a bet. Validation that its model worked at scale—2 million students is no small feat. But also a bet that districts would find room in baseline budgets for services they'd grown accustomed to during the stimulus years. Whether that bet pays off may depend less on the quality of Paper's tutoring than on the financial realities facing American schools once the federal money runs out.
The deadline, after all, is fixed. And unlike venture capital, Congress doesn't typically authorize follow-on rounds.
