#StartupsEverywhere Profile: AJ DeLeón, Co-Founder & CEO, Innovare
This profile is part of #StartupsEverywhere, an ongoing series highlighting startup leaders in ecosystems across the country. This interview has been edited for length, content, and clarity.
Centralizing & Analyzing the Data Educators Need to Make Better, Faster Decisions
Innovare is an education technology company that aims to enable improvement throughout educational communities through the use of education management software and good data. The company’s platform helps educators centralize and analyze student data in order to guide better, data-driven decisions in the classroom. We spoke with AJ DeLeón, Co-Founder and CEO of Innovare, to learn more about his platform, his experience navigating various data privacy regimes—including why he favors a uniform, federal privacy standard, and his experience raising the capital necessary to build Innovare.
Tell us about Innovare. What does your software do?
Innovare is an education technology company headquartered in Chicago with offices in the Bay Area, Texas, and New York. We are proud to prioritize inclusivity and diversity at our company, and are led by members of underrepresented communities including people of color, women, and LGBTQ individuals. Our company is also one of the just two percent of companies led by people of color that are VC backed, having raised over $5 million. And we’re proud that as an impact-focused company, we have made over $2 million in recurring revenue and are profitable. We’ve noticed a critical problem in education leadership: leaders such as principals, superintendents, and board members lack the necessary tools and information to make educated decisions because they can't access information scattered across multiple systems when they need it. For example, let's say a principal needs information on finding the best teaching fit for a certain group of students. To access that data, the principal would have to navigate collateral spread across multiple different systems and somehow get them to connect.
Our app Inno™ solves this problem by connecting the data available in all these systems, such as test scores, attendance, etc. into one dashboard. Then, the leadership uses the insights from the dashboards our app builds tp make informed decisions. Additionally, our app includes a strategy module, where education leaders can document their strategy and execute it in order to scale their impact on students and communities.
What should people outside the tech ecosystem understand about concepts like interoperability and application programming interfaces (APIs)?
Interoperability is a concept that we strongly believe in at Innovare. Data should be insightful, combined, and shareable. However, in the sector we work in there are many restrictions on what data can be shared and who has access to it, which is understandable. Protecting personally identifiable information (PII) is essential, but there is other data that is shareable. Outcome data or data that is not PII is shareable. Some companies try to monetize APIs and charge schools more money to open them up, but that’s not our approach.
At Innovare, we are creative and we do not try to connect systems outside our own with each other, but instead, we absorb the data into our own through raw data files or via an API. We can download a CSV or use a big query to get data from different systems. We are a Google for Education partner, and 70 percent or more of schools use Google, so our systems are compatible with a lot of schools’ native data storage operations out of the gate. We get all their information in one place, including private data for students, which we put behind a gate with restricted access. Our team stays up to date with norms and laws to ensure that we stay within legal limits. We work in multiple states, each with their own laws, so we are well-versed in compliance.
You mentioned data privacy, why is that important, and what has your experience been navigating various state privacy standards?
When people think of data in the education space, people often presume that it’s all covered by federal law like the Family Educational Rights and Privacy Act (FERPA). But there’s a lot of data in this space that FERPA doesn’t cover, and the rules governing that data can vary wildly from state to state or even at the local level. It's not uncommon for kids to move from one state to another and find that their data is no longer private due to different state laws. This has happened with our clients when they move from the suburbs of Chicago to Indiana, just a few minutes down the road. The nuances of data privacy laws can be very tricky to navigate from a business perspective, especially with state-specific and, regarding schools, city-specific laws.
As a company that handles this sensitive information, we prioritize data privacy and take steps to manage the associated costs and risks. One of the ways we do this is by using Google Cloud—we’re a part of the Google for Startups and Google for Education partnerships. Unlike some cloud systems that may host data in foreign countries, Google takes the steps for us to ensure our clients' data is strongly protected and only hosts it in domestic data centers. This level of protection is cheaper and easier than, say, building our own data hosting system from the ground up. However, it still comes at a higher cost compared to other, riskier cloud systems.
Because we prioritize data privacy, we invest in customer success teams, legal teams, and training for our employees to ensure that only the right people have access to sensitive data. This also means that our customer acquisition cost is higher than companies that don’t make those investments, and while it might not be something all startups can afford to the same extent, we believe that it actually positions us for a competitive advantage in the market because it sets us apart. Educating clients on data privacy best practices also incurs costs as we need to have informed personnel to educate them properly. We understand these costs are all necessary to ensure that we maintain high standards of data privacy and protect our clients' sensitive information.
In terms of policy recommendations, we believe it is crucial to have a federal privacy law that can provide uniform guidance and protection for individuals and organizations dealing with data privacy across our country. The current policies such as FERPA only cover specific types of data and do not provide comprehensive guidelines for all types of information in every state. A federal privacy law would provide a standard that everyone can refer to, making it easier for individuals and organizations to ensure compliance.
What has your experience been raising capital? What do you think policymakers should know?
Fundraising as a person of color is very challenging in the U.S since most institutional funds are not as diverse. For example, although most investors have a thesis and are looking for a specific type of business their connection to you as a person and their belief in you as a founder has a lot to do with their decision to invest. So, if you are a woman, BIPOC and/or LGBTQ+ person and you are not their typical profile of a founder, you will have a harder time building up your credibility and getting an investment. The data supports this, and it is not surprising since there is still rampant inequity in our society. However, there is a growing number of equity-focused VCs now as disparities between whites and non-whites, in terms of fundraising, have become a focus of conversations in the ecosystem, and also data has become available that shows that diverse-led teams have better business outcomes.
During my fundraising process I had to think: “Knowing all of this, how will I navigate these challenges?” So, I prioritized connecting with investors who I felt could connect easier with my story and the “why” of what my company does. For example, I prioritized speaking to investors in edtech or funds led by Black and Latino managing partners. That was my strategy—work with everyone that was willing to be on my team; be a champion of entrepreneurs like me who are driven, capital efficient, strategic and want to build a legacy.
I raised $3 million initially, and recently was able to close $2M in seed extension funding. Also, our company’s valuation more than doubled, which shows why investing in companies and entrepreneurs like me is good business. So, I think the data is there that when you support a company from any type of underdog, you can see the results.
What are your goals for Innovare moving forward?
In terms of our tech, we are currently working on the launch of our AI-powered strategy module. It will make recommendations to leaders on what strategic plans they need to develop and how to allocate resources to get results faster and cheaper. Also, in the next two years, we will launch what we are calling the “Innoverse”, which will be the first ever edtech marketplace. It will sell all the solutions that we currently tap into directly to our clients, making it easier for them to find impactful solutions that align with their needs and making the procurement process easier for everyone. In short, by creating a space driven by technology that will match good solutions to the problems and challenges of education leaders, we will not only increase our revenue but have greater impact on the sector.
As a company, we hope to continue scaling, hiring more people of diverse backgrounds, and increasing our company’s reach and valuation. Our vision is to professionalize education and, once again, make it a national priority. We believe that innovation and technology are key to achieving this. Rather than just approaching education reform from a policy or investment route, we believe we need to invest in empowering the leaders of that sector with the technology tools and community of support they need to succeed. So, I think our company is on the right track, and by helping these leaders we will impact their local communities, and continue to generate economic impact, and prosperity for all of us.
All of the information in this profile was accurate at the date and time of publication.
Engine works to ensure that policymakers look for insight from the startup ecosystem when they are considering programs and legislation that affect entrepreneurs. Together, our voice is louder and more effective. Many of our lawmakers do not have first-hand experience with the country's thriving startup ecosystem, so it’s our job to amplify that perspective. To nominate a person, company, or organization to be featured in our #StartupsEverywhere series, email advocacy@engine.is.
