The seeds for Alisher Rakhimov’s start-up were planted on one of the many trips he took to the front office of his son’s school to pay for school lunches, field trips, athletic fees and afterschool programs. It felt like there was always a check that needed to be written and dropped off, he said.
Rakhimov was already familiar with being on the receiving end of a school payment. For almost a decade, he had been the business manager for a group of public charter schools. However, after his son was born, he left with plans to pursue a CPA degree and be a stay-at-home Dad. Which, once his son entered kindergarten, meant many trips to school to pay for various fees.
“As a business manager, you’re tasked with policies and procedures,” he said. “You don’t think about the user experience. I found out it’s crazy for the parents.”
Rakhimov switched gears and used his experience as both parent and school administrator to found SKOOKii, which provides a free online app that simplifies payments for parents, reduces paperwork for schools, and helps protect both from fraud.
School payments are big business
About $41 billion in school fee transactions occur each year. Most school websites cannot process payments electronically, and close to 75 percent of the money is collected in cash and checks. Those schools that do use payment programs can find them expensive or overly complicated, Rakhimov said, requiring parents to input account information each time they want to make a payment.
“Ali and SKOOKii are providing an alternative to schools that reduces the cost and improves integration issues,” said Christine Bailey, Executive Director of Chandler Innovations.
In addition to simplifying the payment process, SKOOKii helps eliminate what Rakhimov calls the “elephant in the room” for many school systems – fraud. SKOOKii’s blog is filled with news stories from around the nation of business managers, secretaries and even cafeteria workers pocketing fees that were supposed to be supporting schools and children. Last year in Arizona, a school superintendent was sentenced to two years in prison for embezzling almost $1 million to support a gambling habit.
SKOOKii began in 2016 with just five schools registered with the app. Now, the company provides its service at more than 260 schools and has processed more than $3 million in transactions. ACH transactions on the app are free, while the company charges a 3.5 percent fee for credit card transactions. Its revenue is the balance after the credit card companies take out their cost.
“That narrow profit is poised to grow dramatically this year”, said Bailey.
Building the business of a payment process for schools
“Right now Ali is building awareness and getting into schools,” she said. “He’s gaining traction, and his customer base is growing. The next step is growing revenue.”
They’ll be getting some help on that front from several sources. Social Capital in Palo Alto is investing in SKOOKii, making it one of 60 companies – out of 5,000 applicants – to win support from the venture capital firm. Meanwhile, SKOOKii has signed with SDI Innovations, a national education product distributor best known for School Datebooks and classroom accessories, to work together on sales and marketing efforts.
The company is beta testing a point-of-sale system for schools that it plans to unveil during the National School Charter Conference in Austin, Texas this month, and also plans to develop a “white label” version of the program that could be offered by banks and insurance companies with public sector clients.
“We started SKOOKii as a payment button,” Rakhimov said. “The next phase is the hardware like Square, and the third phase is becoming a processing platform like Stripe.”