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(which has been ramping up its startup investment as of late) led the round, which also included participation from and along with existing backer , which used its pro rata, according to Flywire.

The new financing takes Flywire’s since its 2011 inception to $263.2 million, according to Crunchbase data.

Flywire also announced it has acquired , a developer of payments software for the health care industry that had raised $36.4 million in venture capital funding.

In a phone conversation with Flywire CEO , I learned more about what the company does and how much it’s grown. He was refreshingly transparent.

So, let’s get into the details.

More than software

Fundamentally, Flywire is a payments company but it has also built software to help process payments. (Which makes it both a SaaS operator and a transactions platform.) Its focus is on the education, health care and travel industry verticals.

“All three are fraught with a lack of digitization, and are inherently complex with legacy systems involved,” Massaro told Crunchbase News. “We think these areas have been underserved.”

To date Flywire says it has processed over $12 billion in total payments volume for over 2,000 clients around the world. Seven of the eight Ivy League schools use it to collect cross-border payments, for example. As do hundreds of hospitals, including the top four hospital systems in the United States. People going on exotic trips such as African safaris can use it during their travel.

“We don’t just deliver the software that helps around payments,” Massaro said. “We actually move the money.” In fact, it claims to “move billions of dollars across 200+ countries and 150 currencies.”

Flywire has two revenue streams. It makes SaaS revenue off the software it’s using to help clients such as , or . But the majority of its revenue is transaction-based.

Speaking of which, Flywire is a unicorn with “well over $100 million in revenue,” according to Massaro. Despite being around for nine years, it’s still seeing nearly 40 percent revenue growth year over year, he said.

It also has 530 employees, which is 10 times the 50 it had just five years ago.

Massaro expects Flywire to return to profitability this year, and said the company has been “very capital efficient.”

“Prior to this round, we had $45 miillion in cash on the balance sheet, and now we have about $75 million to $80 million,” he told me. “And we don’t expect to burn a lot this year.”

Acquisition

In acquiring Simplee, Flywire picked up a competitor, sort of. Flywire has historically focused on the provider side, helping digitize their back offices. Simplee is focused more on the patient experience.

“We both help providers engage their patients digitally,” Massaro said. “They can help explain the cost of patients’ medical care, and how much they owe insurance, in addition to helping them digitize payments.”

With the buy, Flywire also expanded its geographical footprint, as Simplee has offices in Palo Alto and Tel Aviv. In addition to its Boston headquarters, Flywire has 10 offices, including locations in Europe and Asia.

Last year, the company expanded into Latin America and plans to continue that expansion geographically. It also plans to double down on all its verticals.

Illustration:

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Gené: Welcome to Katie Rae, CEO and Managing Partner of The Engine. How did you get into this role of an operator in tech, and then switch to investing?

Katie: I ended up at business school where I met my first set of engineers who wanted to start a company. I was so naive that I thought maybe I could help them do it. We just started a company. It was that simple. It’s where I learned what a venture capitalist was, what an angel investor was, and from there I joined Elon Musk’s first startup called . I learned how to be a general manager, how to run things, and build technology companies.

I had helped so many people start companies over the years, I wanted to learn how to be an investor. I met at . He was one of the first people I called and said, ‘Brad, you’ve been doing this for a long time. How should I think about this?’ He’s such an open wonderful person that he very earnestly sat down with me and started to talk about it. He said, we’re just kicking off . You want to learn how to run a fund? He and hired me to run the Boston program of Techstars. This is late 2010. It all kind of went from there. Then I decided to leave Techstars and raise my own fund. I started a firm called .

Gené: What did you learn through running Techstars in Boston?

Katie: There’s almost no shortcut in venture. You have to see your first two to three thousand companies before you can start to judge teams fairly. Do they meet the bar or not? Everyone gave the same number, two to three thousand companies. For most people that takes five to seven years. But when you run Techstars, in the first year I met two thousand companies.

The second thing I learned is that the effort you put into this, and the love you show for the entrepreneurs, is so fundamental to great outcomes. You really learn to trust each other. Because without that trust people just block each other off, and they stop telling the truth or they stop revealing what’s actually happening. It was so shockingly apparent to me that you have to be genuine in these relationships. It’s not a transactional business, and certainly not in the seed stage. These are early companies where a hundred things could go wrong, but only one needs to go really right to win. If you’re focused on all the wrong, you will kill these companies. That’s what I learned.

It’s a lesson that gets replayed in almost every piece of life, whether it’s your relationship with a spouse, or your children. It’s always that same lesson.

Gené: The Engine was founded fairly recently in 2016. I think you joined in 2017?

Katie: It was formed as an entity at the end of 2016. We closed the funded in 2017.

Gené: The Engine is part of MIT, is that correct?

Katie: It’s a spin out of MIT. It’s a for profit spin out, an independent entity. We have a board of directors in which two members are from MIT. Then we have six members outside MIT.1

Gené: What is different about The Engine?

Katie: I’ll tell you what’s the same and what’s different. We are a public benefit corp at the very top, and some other funds are that as well. But we’re on a mission to create, enormous impactful tough tech companies. We start within the Boston region. We are targeted on solving really big problems with technology. That’s why you see us in things like clean energy, or how to cure disease, or feed the world’s people. At the top, we have a true mission, and our board holds us accountable to that mission.

MIT’s mission is also impact, and not only through technology. Our missions are aligned. We have access to things that are very unusual. This deep rich history of incredible technology development, and people, but also facilities. MIT opened all their facilities to the startups. They helped us build out this first space. We’re thinking about how to 10X everything we’re doing. It’s why the breakthroughs matter because they actually have to impact the world. It’s not for knowledge only, it’s both for knowledge and to impact the world.

Gené: What is the connection with MIT Media lab?

Katie: The is part of the institute, and it’s funded quite differently. The way we work across MIT is we work with all the different professors, postdocs, and PhDs and some of the undergrads, on the companies they’re thinking of creating. We try to work with the ones that we believe are in this kind of tough tech zone and are ready to spin out of the university. We will nurture very early, and try to help those companies along and then fund them when we think they’re ready to spin out.

Gené: How do you plan to invest the $205 million fund?

Katie: We’ve made 19 investments to date. It’ll probably be about 30 companies to 35 companies in this portfolio. We fund the gap between the lab and other venture capital. We do the first four years of a company. So pre-seed to Series A. If we were willing to invest into technical risk, the returns could be extraordinary. We spend the majority of our time in true technical risk with massive opportunity, if they get through that technical risk.

Gené: How many partners on the team?

Katie: There are three partners , , and myself.

Gené: How much do you typically invest? And how much equity do you like to get for that investment?

Katie: We like to get 10 to 20 percent of the company and the investment varies. Our first checks are from one to five million dollars. Sometimes we do experimental checks that are less than that because there’s something to prove out, or we’ve got to develop the team.

Gené: What is the time frame for patient capital?

Katie: Whatever the biggest technical risk is, you want to take that out in the first four years. That’s what opens all kinds of capital to the company, whether it’s venture capital, or non dilutive capital, or project finance capital. Most funds are 10 years, which means that you must be in market truly deeply within the first four years. Otherwise, you’re not going to get to exit within 10 years. We like to have a slightly longer time frame than that. Ours is up to 18 years. And that allows us to take a different set of risks in technology that we think are really important. For , if this is the first commercialized fusion company, it will be very valuable. But it will take a number of years, more than most venture capital is willing to take to get there. Maybe four or five years longer. If they get there, the win is enormous. You’ll see those across the tough tech space, whether it’s in biology, or chemistry, or physics.

Gené: Are there a couple of companies that you’re excited by and why?

Katie: is doing something really extraordinary. It’s an almost perfect Engine story. It’s built off of 50 years of research, in the plasma fusion center, and billions of dollars of U.S. government funding. An incredible team of postdocs launched the company out of MIT. What they’re doing is miniaturising a fusion plant, with an invention that allows them to get to net positive energy. The problem is that it hasn’t generated net energy, because it takes so much energy to run the power plant. We believe what they’ve invented will allow you to get there. If that’s true, you basically have endless clean energy. This is a team that has already proven out a bunch of the most significant milestones, and will continue to do that over the next two to three years. They are a year old as a company.

Another one that that’s probably more accessible. There’s a company here called . It’s built by a mechanical engineer out of MIT and a research biologist. They looked at the biotech industry and said, ‘Why are there PhDs basically injecting things into cells?’ Would there be a way to speed this up in the biotech industry by ten thousand X. It’s a platform. It affects almost every biotech company. They are 18 months old. We did the seed round.

Gené: Is there anyone else doing what you’re trying to do around the world?

Katie: I’ve talked to probably 150 universities in the last two years. I think there are some gating factors for some of the universities, but I think you’re gonna see more of these partnerships. They have so much physical infrastructure that tough tech companies need. There is discipline that is important to company development by getting capital in, which formalizes a board and formalizes a process of focusing on things that could be enormous.

One of the things we love to do is help others. Teach others what we’ve learned already, in collaboration, so that we can learn together. There are some venture funds like and that do look at these big breakthrough technologies. We do a lot of work with on the clean energy side. These are funds that have the same longer time frame, big technology focus.

Gené: Are pockets around the U.S. that are focused on deep tech outside of Boston Cambridge?

Katie: You could look at Berkeley or places in the Bay Area, Stanford, and LA. There are pockets, certainly at the big universities like , , any of the big research universities. The concentration of startups really does end up mattering. When you’re one of three startups in an ecosystem versus one of three hundred, it makes a big difference. Concentrating these tough tech startups is very much on purpose. All the research will tell you that it is good for all of them, whether it’s talent or capital or infrastructure that clustering does matter. We think this is one of the best places in the country to do companies like this.

Gené: Is there anything we didn’t cover?

Katie: Sometimes people get confused between impact and returns. I don’t think you have to sacrifice return to go after really big impactful companies.

The second is that we really bet on scientists and engineers growing into the leadership of the company. We think it is fundamental that you have inventors that understand this technology, but then also want to grow into great business people. If you nurture them in growing into business leaders, they catch on super-quickly, and have the total package for running a company.

Gené: And these are people who haven’t gone through business school?

Katie: Most have gotten a PhD and probably done a postdoc. We don’t want people to think, you can’t be the CEO unless you have an MBA. Lots of great MBAs are great CEOs. But if you’re running a fusion company, you better know a lot about fusion or if you’re doing a biology company, you better know a lot about that. We like to build the business expertise around someone.

Gené: Well, thank you Katie.

Illustration: .

At least that’s the stereotype you might have in mind if you had to guess the most common alumni affiliations of startup executives. And in truth, you’d be reasonably accurate.

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While of course there’s no degree required to be a venture-backed startup executive, in practice it sure helps to graduate from one of a shortlist of prestigious universities. That’s true for CEOs. It’s true for founders. And, as we recently put to the test, it’s also true for chief technology officers.

With another back-to-school season upon us, Crunchbase News decided to celebrate with a data dive into top universities among funded startup CTOs. For this dataset, we looked at U.S. schools attended by chief technology officers of companies that have raised $500,000 or more in funding in roughly the past two years.

For the most part, the results aren’t too different from lists we’ve put together previously for founders and CEOs. But there is one large and very obvious difference: CTOs are much more likely to graduate from technical universities and other schools renowned for their engineering and computer science departments.

So what’s the top school for funded CTOs? We list the top twenty below:

Ok, so what stands out about the list above? For one, we should note that every time we do one of these lists for any education ranking related to funded startups, Stanford is the school that winds up on top.

One might expect to see Stanford’s dominance slip a bit as the center of gravity in startup-ville shifts North from the university’s Palo Alto hometown to San Francisco, the current capital of the unicorn boom. However, that doesn’t seem to be happening. VCs still love to fund Stanford grads, and Stanford grads are still happy to cash their checks.

Seeing MIT in the Number 2 slot is also noteworthy, if not surprising. While MIT reliably ranks in the Top 3 for our funded CEO and founder rankings that don’t include business schools, it’s higher for the CTO rankings. One might expect this for what many lists as the nation’s top technical school.

University of California at Berkeley also performs well in our CTO list. The school reliably ranks as one of the top five American universities for engineering and technology, and its proximity to San Francisco and Silicon Valley don’t hurt. In fact, a majority of Berkeley-affiliated CTOs in our list work at startups in the San Francisco Bay Area.

We also found that public universities appear to be graduating a higher relative proportion of funded CTOs than funded CEOs or founders (a group that may also include CTOs). Half of the top ten schools for funded CTOs are public universities.

Methodology

You see a lot numbers above. So just how definitive is this dataset, you may be asking? In truth, it’s more a general guide than a definitive count, given that a majority of Crunchbase CTO profiles do not list where the subject went to school.

For this dataset, we looked at chief technology officers of companies that raised $500,000 or more since August of 2017. There were nearly 5,500 Crunchbase profiles that met that criteria, but of those, fewer than half had a college or university listed.

CTO alum also did not necessarily obtain a technical degree from the university listed. Our search parameters did not allow us to specify a major. Also, we include business, law and medical school grads in the CTO search, although these accounted for very few of the degree recipients.

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