Niche Raises $35 Million to Rival School Directory Review Sites
With campuses closed around the world, aspiring college students may well depend on digital tools to decide where to attend. Some schools have invested in virtual tours to give students and parents a peek, but families may also fall back on old-fashioned online reviews.
Some people already refer to U.S. News & World Report’s school rankings or nonprofit GreatSchools’ directory. There’s also Niche, which hopes to compete for the attention of parents as they research and decide where to send their kids to school.
And now, thanks to a $35 million Series C investment round that closed before the outbreak, Niche hopes to raise its profile and partner with thousands of additional schools nationwide to add more information to the existing 130,000 K-12 schools, colleges and universities on its website. “These are the most important decisions of your life,” says Niche founder and CEO Luke Skurman.
Radian Capital led the round. Salesforce Ventures, Allen & Co. and Tim Armstrong participated. Founded in 2002 and based in Pittsburgh, Niche has raised a total of about $45 million in venture capital.
Skurman’s company originally focused on college ratings under the name College Prowler. In 2013, the company rebranded as Niche and added K-12 and neighborhood data.
Niche claims its directory has 140 million ratings and reviews for schools and colleges, not to mention quality of life metrics for various U.S. cities. It ranks schools by different measures and categories. K-12 schools are sortable by public or private, religious affiliation and whether they offer gifted programs, among other measures. College categories include four-year or two-year, average costs after financial aid and level of selectivity.
If you’re curious about the latest results, Niche’s best college in America is Massachusetts Institute of Technology. The best public high school is Thomas Jefferson High School for Science and Technology in Alexandria, Va., and the best private high school is Phillips Exeter Academy in Exeter, N.H.
The best city to live in? Arlington, Va., per Niche.Niche.com CEO Luke Skurman shares company history.
The company relies on data from the Department of Education, U.S Census and FBI, along with other resources. The company also uses survey data from millions of students, parents and alumni to inform its profiles. It excludes schools and places missing data for 50 percent or more of the factors it weighs the most.
For its 2020 college rankings, for example, academic factors like acceptance rates and student and alumni surveys on academics at the school received the most weight, while factors like median rent and local crime rates received the lowest weight. For K-12 schools, academics received the highest weight while the number of sports and survey responses on athletics and athletic facilities from students and parents were weighed less.
Niche claims that about 21 million people a year research K-12 schools on its platform. Another 20 million research colleges and 11 million people research places to live. Skurman says his company has about 120 full-time employees.
The website is free to use for students and parents. The company makes money from advertising and charging schools to upgrade their profiles on their site. Institutions can access the already-created profiles for free and receive monthly insight reports and update their information. Niche has about 15,000 such accounts.
With a paid upgraded account, they get the ability to post messages and marketing materials like YouTube videos, link to Instagram accounts and remove banner ads. So far, more than 1,000 K-12 schools and districts and 330 colleges are paying customers of this service. Clients include Harvard Westlake School, Boston University and online schools operator K12 Inc.
The average contract value for Niches’ suite of subscription services is about $10,000 a year. Niche doesn’t charge per enrollment or guarantee enrollents, Skurman says.
However, schools cannot dictate changes to reviews, ratings and rankings, says Skurman, 39. “They have no bearing on our editorial coverage,” he says. “We have to maintain trust with users.”
The company also sells licenses for its data to third-party organizations starting at $5,000. Customers include real estate firms that want to provide insights on neighborhoods and businesses that want to learn more for market expansion and recruitment. The relationship between school ratings and rankings and real estate information have led to concerns that such metrics may perpetuate racial and economic disparities.
One way Niche has combat this issue is through a particular rankings list for “standout schools” that focuses on factors like diversity, graduation rates and state test scores for economically disadvantaged students. The list is limited to schools with an overall Niche grade of B or higher and with at least half of its student population identifying as economically disadvantaged.
Sally Rubenstone, a contributor to college admissions counseling website College Confidential and an admissions counselor for more than 15 years, said in an email that U.S News remains the top resource for college rankings, much to her chagrin.
While the rankings have helped her champion lesser-known universities and liberal arts colleges, she still feels that rankings add unnecessary stress to college applications and that families have come to rely on scores and prestige over other factors like programs that interest students.
With the COVID-19 outbreak, more schools have made the SAT and ACT standardized tests optional for the class of 2021. The test-optional movement already saw adoption from about 1,000 U.S. schools before the outbreak.
Rubenstone hopes less focus on standardized test requirements and more flexible transfer policies “will throw a monkey wrench into the ranking protocol and outcomes and may even spur some folks to more eagerly look beyond the rankings when making college decisions.”