With ESAs Soaring, Tech Platform Odyssey Emerges To Help Families Access State Funding

As the pandemic interrupted schooling throughout the country, an increasing number of parents from a variety of walks of life began seeking new schooling arrangements and educational opportunities.

Eager to support all families looking for better choices for their children that match the priorities and realities of the parents and caregivers, many states have stepped forward with a range of education savings accounts (ESAs) and microgrant programs to enable families to afford different choices.

But even as states from Arizona to West Virginia and from Florida to New Hampshire and Idaho have moved in this direction, a critical challenge has been the bureaucracy and complexity of administering these programs and dollars and helping more families navigate these opportunities.

To tackle that problem, edtech startup Odyssey, a platform that helps connect families to public funding and education services, has raised a $4.75 million seed round from a top group of investors, including lead investor Andreesen Horowitz through its American Dynamism practice that invests to solve important national problems, as well as Village Global, Bling Capital, John Danner, and more.

The problem Odyssey is solving is not a small one. Distributing millions of dollars to thousands of parents presents a dizzying challenge for states. Making good on the promise of ESAs hinges on addressing inadequate fraud protection and administrative transparency, complicated application and verification processes, and—as a result—a lack of participation from both parents and providers.

Odyssey’s plan is to partner with states to smooth the implementation and ensure all eligible families can benefit.

Joseph Connor, the founder and CEO of Odyssey, is in a strong position to help. The founder of Schoolhouse, a marketplace that helped match educators to families; a former teacher; and a lawyer, his vantage point on the challenges of the current system has helped Odyssey craft an early solution to cut through many of the hassles and simplify the enrollment and payment process for families.

“Making good on the potential of education savings accounts starts with ensuring that implementation is seamless and user-friendly for not just parents and families, but vendors – whom we connect to the platform,” Connor said. “It demands a relentless focus on transparency and accountability to ensure that state leaders can safeguard taxpayer investments and quantify their impact.”

In building the platform, Connor spent a significant amount of time understanding the pain points that arise in these programs from the perspective of parents, providers, and the state departments that are tasked with administering them.

Odyssey already appears to be having traction. Idaho recently selected Odyssey to administer its $50 million Empowering Parents grant program. In the first six weeks of implementation, Odyssey successfully processed over 47,000 student applications, approved 27,000 of them, and awarded $27 million of government dollars. That early track record compares favorably to programs in other states where, for example, the departments of education struggle to move 300 applications in three months.

What’s made the difference is using software instead of employees of the education department to automate large parts of the process of approving families to participate in the program. For example, Odysseey’s platform plugs into Idaho’s tax records to ensure that parents who apply are indeed Idaho residents and then runs those records against the school database to ensure the children are enrolled as K-12 students in the state.

An application that formerly took hours or even days—with many parents giving up midway through—now takes four to five minutes.

On top of that, Odyssey has also stood up a customer service operation to support parents and the department with inquiries, as well as the ability to communicate in multiple languages ​​and modalities.

Similarly, whereas roughly 40 education providers were approved in Idaho beforehand, now Odyssey is trending towards having approved nearly 200. The company has accomplished that through a few techniques.

Odyssey has helped recruit high-quality national providers, as well as make sure that local providers—ranging from music schools to children’s bookstores and after-school providers—are aware of the program. Seeding a vibrant marketplace is critical, Connor told me. The company has then helped make the process to enroll as an approved provider far simpler and made sure that the providers’ various programs meet the criteria for the microgrant program in Idaho. For example, programs teaching cheerleading do not qualify.

Next, Odyssey helps market the existence of the program itself so that parents and students know of the opportunities to enroll in educational programs. Finally, the platform facilitates the payments themselves.

Prior to Odyssey doing so, providers were receiving payment within 10 to 14 days—and even then the payments were tagged clearly to the service being consumed, which left the providers guessing who had paid and who hadn’t. Now Odyssey cleanly facilitates those payments within 48 to 72 hours.

According to Connor, they hope to announce one more partnership with a state by the end of the year. He then anticipates that they will sign five to six more states in the next year. Although they are proud of being the only solution purpose-built for the ESA market at this time, they want to grow in a sustainable fashion and make sure they are well serving each state with which they contract.

Research from my new book, “From Reopen to Reinvent,” suggests that the demand for the types of new schooling arrangements Odyssey supports is vast. Not only do students need learning experiences that break out of the traditional one-size-fits-all classroom arrangements, but parents and caregivers also have a range of priorities that demand different choices. The pandemic painfully revealed just how unsatisfactory the traditional one-size-fits-all system is.

Freed from the habit of traditional schooling that historically caused many parents to stay with their schools even when they weren’t meeting their children’s needs, an increasing number of parents are now acting on these desires for progress.

My research suggests that schools and society would be wise to listen, but new data appears to be confirming the demand. According to Tyton Partners, an education consultancy, there was a 9 percent decrease in public school enrollment between the spring of 2021 and spring of 2022—a time when most schools had reopened after a period of remote learning.

Less than 10 percent of the decrease, Tyton reported, is because of declining demographics, delayed entry into school by kindergarteners, or dropout rates. The majority are exiting to enroll in some combination of charter, private, or homeschools.

Ensuring that the benefits of these arrangements don’t just reach those families with means and social capital is imperative, which is why solutions like Odyssey appear critical. Creating ways to support demand and make the search and enrollment experience more seamless will be vital to allowing families to make progress and assemble the right schooling options for them.

As an array of investors fund Odyssey, their recognition of the current problem—and the potential opportunity—is a promising sign.