Vlada Lotkina and Jason Olim struggled at first to find investors for ClassTag, a SaaS tool enabling educators to communicate with families they launched in 2015.

After being turned down repeatedly in their first five years, the founders managed to attract $5 million in seed funding in 2020, then an additional $7 million.

Then they faced two more withering challenges: a global pandemic that affected the VC market and a war that displaced their Ukrainian team.

Yet by 2023, Lotkina and Olim were profitable with 7 figures in annual revenue, and they decided the best path was to join with a more established edtech player.

They sold ClassTag for 8 figures to SchoolStatus, a Mississippi-based education communication tools company.

Starting ClassTag to modernize school-parent communication

Both Lotkina and Olim caught the entrepreneurship bug early. Olim, a software engineer, started first wave online retailer CDnow with his brother in 1994 and took it public in 1998. Lotkina, originally from Ukraine, came to the United States at age 22 to pursue an MBA at the Wharton School.

“After graduating from business school, I was really keen on starting my own business within a year or so, but wasn’t able to. At that time, I really needed a visa sponsorship, so I decided to take the corporate route,” Lotkina explained in an interview for The Immigrant Founder Series on Medium.

She later had the inspiration (and the Green card) that led to ClassPass when her daughter started school. “I was shocked that parent-teacher communication was incredibly outdated. Messages came through paper notices transported in backpacks,” Lotkina explained in the same interview.

She teamed up with Olim, who was the father of another student at the school, to build a better tool for teacher-student communication, and ClassTag was born in 2015.

Finding investors for ClassTag

At first, Lotkina struggled to attract investors to build the tool, which allows educators to communicate with families through various channels, including text messaging, email and the app, and in whatever language they prefer.

“It was very difficult to find the first investments. About 100 potential investors told me no – all because the sphere of education, especially school, is considered very dubious from a business point of view: everyone knows that there is a strong bureaucracy in schools and there is no money,” she explained to Forum Daily.

Eventually, ClassTag was able to attract investors, including $5 million in seed funding in 2020. The company went on to raise $12 million in VC money in total, reaching five million users and 7 figures in revenue.

The company was profitable despite challenges. One of the biggest, Lotkina told They Got Acquired, was “going against the trend and monetizing through brand partnerships, which is a model that doesn’t have a blueprint in education.”

Another was the outbreak of war in Ukraine, where a number of ClassTag’s product team were based. The team scattered, with some leaving the country. Lotkina told Forbes she felt “astonished and proud” that her Ukrainian employees found ways to work in the middle of an invasion.

But while Lotkina and her team remained determined, the edtech sector as a whole faced headwinds. There was consolidation in the industry, Lotkina told They Got Acquired, and the company required further investment in building out an additional go-to-market strategy.

Lotkina said they needed to rework their strategy to reach school districts, which were increasingly deciding which communication tools to adopt, rather than individual schools or teachers deciding. Given the market conditions, Lotkina and Olim decided to look for a buyer for a ClassTag.

An advisor connects ClassTag’s founders with SchoolStatus

They looked to Chris Nyren, an education industry M&A advisor at Educated Ventures, for guidance. He connected them to SchoolStatus, a Mississippi-based education communication tools company.

SchoolStatus had previously acquired school newsletter company Smore and digital forms and workflow automation company Operoo – and now wanted ClassTag to add to its suite of complementary products for educators.

“ClassTag gives us the foundation for a family and teacher experience that centralizes the most relevant data about students for families in a way that is easy for teachers to use,” explained Russ Davis, SchoolStatus founder and CEO, in a press release. “We’re pairing this technology with our vast experience in data integration to power the most important messages home to families: How are students performing? Are they showing up to school? Are they on track?”

The 8-figure deal closed in August 2023. Since then, Lotkina has focused on mentoring other founders and building her personal brand, including through a new podcast. Olim moved over to SchoolStatus, where he is serving as CTO for the company’s Connect business, which leverages the ClassTag platform.

Lotkina’s biggest advice for other founders considering an acquisition is to stay focused and keep fighting. “Most deals fail,” she said. “Remember that having a thriving business is more critical than ever through the M&A process.”