Brian Hill, CEO of Edovo, has raised capital, sold parts off and re-engineered the company all over the past few years. He operates in a unique space: education in corrections.
He says he spent the first three years convincing jails and prisons that they could provide technology inside safely, and the next three years navigating procurement because with government. Hill bought a phone company as part of that because procurement was going through that path. There's a lot of infrastructure that Edovo had to provide, as well as the software.
"So, that was part of the journey and part of the fundraising and everything from debt to equity to acquisition," he says. "And then we realized it was distracting us from some of the core things as a mission-driven company that we wanted to focus on, and so we divested that phone company in a successful way and did so so that we could then actually get broader market reach and target the market in a very specific way around impact and education inside the prisons and jails."
Hill says the phone company was acquired because the infrastructure costs, such as the procurement of tablets, which are the medium for the delivery of education in jails and prisons, needed to be bundled together with the phone contracts that government was accustomed to buying. So Hill partnered with the phone companies for a while, but realized he had a different mission, so his company acquired one. That helped the company win business against some of the big players, but he realized it was a bit more of a distraction from the core mission that his company cared about.
"Despite it being a profitable venture, we divested it so we could refocus on the things that mattered most," he says.
That divestiture, however, took a long time — Hill says a year going in and almost a year going out.
Recently, Edovo signed agreements that will allow it to reach every prison facility in the U.S. that has tablets and nearly every jail that has tablets. By the end of 2022, he says, that'll reach about a half a million people every day. That growth trajectory is pretty rapid, he says. Tablets took a while for the market to adopt and now it's an inevitability — everyone will have a device in their hands by the end of 2024, he expects.
When Hill was raising different capital rounds for the business, he says he found a unique category which is the impact investing space.
"We're about as bull's-eye in that space as you can get," he says. "We're a social enterprise that's designed to be a profitable enterprise, but designed in a way that's clearly trying to address one of the more challenging aspects of social justice in America. The impact investing space is pretty hungry and we came in early — about eight years ago. We found that Chicago, and broadly across the country, everyone's looking for good entrepreneurs and good business opportunities, especially in the impact space. I think the dollars are very ripe there but it's got to be true impact and it's got to have upward potential and it's hard to find those opportunities."
Hill says his company found everything from early angel investment to institutional venture investors and philanthropic capital — program-related investment coming from foundations, as well as mission-related investment later stages and philanthropic debt.
"We really took the entire capital stack," he says. "We're very fortunate to find a pretty willing body to try both to solve this problem and do it in a way that was profitable.
After having used its most recent raise to acquire the telecom business, Hill says the company has used the profitability of that business as well its divestiture to scale.
"We have to think a lot more about scale and impact," he says. "How do we help every person across the spectrum within prisons and jails on a daily basis? So, a lot in the technology and then into some new products as well that we believe will add more value for both the individuals on the inside as well as for our investors."
Hill spoke at the Chicago Smart Business Dealmakers Conference about his venture, its recent acquisition and raising capital. Hit play to catch the full conversation.