Education
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UK’s WhiteHat rebrands as Multiverse, raises $44M to build tech apprenticeships in the US
University education is getting more expensive, and at the moment it feels a bit like a Petri dish for infections, but the long-term trends continue to show a dramatic growth in the number of people worldwide getting degrees beyond high school, with one big reason for this being that a college degree generally provides better economic security.
But today, a startup that is exploring a different route for those interested in technology and knowledge worker positions — specifically by way of apprenticeships to bring in and train younger people on the job — is announcing a significant round of growth funding to see if it can provide a credible, scalable alternative to that model.
Multiverse, a U.K. startup that works with organizations to develop these apprenticeships, and then helps source promising, diverse candidates to fill those roles, has raised $44 million, funding that it will be using to spearhead a move into the U.S. market after picking up some 300 clients in the U.K. and thousands of apprentices.
The Series B is being led by General Catalyst (which has been especially active this week with U.K. startups: it also led a large round yesterday for Bloom & Wild), with GV (formerly known as Google Ventures), Audacious Ventures, Latitude and SemperVirens also participating. Index Ventures and Lightspeed Venture Partners, which first invested in the company in its $16 million Series A in 2020, also participated.
Valuation is not being disclosed, but for what it’s worth, the round was one that generated a lot of interest. In between getting pitched this story and publishing it, the size of the Series B grew by $8 million (it was originally closed at $36 million). The FT notes that the valuation was around $200 million with this round, but the company says that is “speculation on the FT’s part.”
The company was originally co-founded as WhiteHat and is officially rebranding today. Co-founder Euan Blair (who happens to be the son of the former U.K. Prime Minister Tony Blair and his accomplished barrister wife Cherie Booth Blair) said the name change was because the original name was a reference to how the startup sought to “hack the system for good.”
However, he added, “The scale has become bigger and more evolved.” The new name is to convey that — as in gaming, which is probably the arena where you might have heard this term before — “anything is possible.”
There are “multiple universes” one can inhabit as a post-18 young adult, Blair continued. While it’s been assumed that to get into tech, the obvious route was a two-to-four year (and often more) tour through college or university to pick up a higher education degree, the bet that Multiverse is making here is that apprenticeships can easily, and widely, become another. “We want to build an outstanding alternative to university and college,” he said. These typically last 1.5 years.
The idea of an “outstanding alternative” is especially important when thinking of how to target more marginalized groups and how this ties up with how tech companies are looking to be more diverse in the future, without cutting down on the quality of what people are getting out of the experience, or the resulting talent that is getting recruited.
There’s long been a stigma attached to less prestigious institutions, and putting money or effort into another channel to perpetuate that doesn’t really make sense or point to progress.
Blair said that currently over half of the people making their way through Multiverse are people of color, and 57% are women, and the plan is to build tools to make that an even firmer part of its mission.
The startup sees itself as part tech company and part education enterprise.
It works with tech companies and others to open up opportunities for people who have not had any higher education or any training, where fresh high school graduates can come in, learn the ropes of a job while getting paid and then continue on working their way up the ladder with that knowledge base in place.
Apprenticeships on the platform right now range from data analysts through to exhibition designers, and the idea is that by opening up and targeting the U.S. market, the breadth, number and location of roles will grow.
This is not just a social enterprise: There is actual money in this area. Blair said that prices it charges the companies it works with range by qualification, “but are broadly around the $15,000 mark.” (The individuals applying don’t pay anything, and they will also be paid by the companies providing the apprenticeships.)
On the educational front, Multiverse doesn’t just connect people as a recruiter might: it has a team in place to build out what the “curriculum” might be for a particular apprenticeship, and how to deliver and train people with the requisite skills alongside the practice experience of working, and more.
That latter role, of course, has taken on a more poignant dimension in the last year: Concepts like remote training and virtual mentorship have very much come into their own at a time when offices are largely standing empty to help reduce the spread of COVID-19.
Regardless of what happens in the year ahead — fingers crossed that vaccinations and other efforts will help us collectively move past where we are right now — many believe that the infrastructure that has been put into place to keep working virtually will continue to be used, which bodes well for a company like Multiverse that is building a business around that, both with technology it creates itself and will bring in from third parties and partners.
Indeed, the ecosystem of companies building tools to deliver educational content, provide training and work collaboratively has really boomed in the pandemic, giving companies like Multiverse a large library of options for how to bring people into new work situations. (Google, which is now an investor in Multiverse, is very much one of the makers of such education tools.)
Apprenticeships are an interesting area for a startup to tackle. Traditionally, it’s a term that would have been associated mainly with skilled labor positions, rather than “knowledge workers.”
But you can argue that with the bigger swing that the globe has seen away from industrial and towards knowledge economies, there is an argument to be made for building more enterprises and opportunities for an ever wider pool of users, rather than expecting everyone to be shoehorned into the models of the last 50 years. (The latter would essentially imply that college is possibly the only way up.)
You might also be fair to claim that Blair’s connections helped him secure funding and open doors with would-be customers, and that might well be the case, but ultimately the startup will live or die by how well it executes on its premise, whether it finds a good way to connect more people, engage them in opportunities and keep them on board.
This is what really attracted the investors, said Joel Cutler, managing director and co-founder of General Catalyst.
“Euan has a genuine belief that this is important, and when you talk to him, you get a feeling of manifest destiny,” Cutler said in an interview. In response to the question of family connections, he said that this was precisely the kind of issue that the technology industry should be tackling to fight.
“Of all the industries to break the mold of where you went to school, it should be the tech world that will do that, since it is far more of a meritocracy than others. This is the perfect place to start to break that mold,” he said. “Education will be super valuable but apprenticeships will also be important.” He noted that another company that General Catalyst invests in, Guild Education, is addressing similar opportunities, or rather the gaps in current opportunities, for older people.
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Fluent Forever raises $4.9M for its language learning system
Fluent Forever, a startup that uses a novel learning system to help its users master a new language faster, has raised a $4.9 million funding round led by Denver-based Stout Street Capital. Other investors in this round include The Syndicate, LAUNCH, Mana Ventures, Noveus VC, Flight.VC, Insta VC, UpVentures, Firebrand Ventures, Cultivation Capital, Spero Ventures and Lofty Ventures.
In many ways, Fluent Forever is a direct competitor to Duolingo, Babbel and similar online language learning services. What sets it apart is a focus on a personalized learning system that emphasizes ear training, visual aids and something akin to spaced-repetition for helping you memorize new words and phrases. It’s a paid service (after a 14-day free trial) with subscriptions starting at $10 per month for a monthly subscription and the usual discounts for longer-term commitments.
To teach himself his first languages, the company’s founder and CEO Gabriel Wyner used the popular flashcard service Anki, wrote a book about his approach, and taught workshops on language learning using his system with Anki. But as he noted, Anki is a serious tool, and simply learning how to get the most out of it takes a lot of time and energy.
Image Credits: Fluent Forever
“I’ve watched everyone else fail at language learning,” he told me. “And the first thought is, okay, well, if you just learn how to do it right, then that’s a fixable thing. That’s exciting. And then once you have a solution for people and they’re all excited about it — but then you watch them fail because of IT reasons. That’s extra frustrating.”
In many ways then, Fluent Forever uses Wyner’s flashcard approach — because building those flashcards by hand is at the core of his learning system — and turns it into a far-easier-to-use application.
What people want, Wyner acknowledged, is a tool where you just press some buttons and learn something. But that doesn’t work. “I had to have a really strong reaction to this — a really strong answer — and say, ‘absolutely not. That is the one thing that teaches you is building it.’ ”
Wyner is not afraid to compare his approach to Duolingo’s and argues that its focus on translation exercises doesn’t translate to real language skills in the long run. At the same time, he freely acknowledges that the Duolingo user experience and gamification are far better than Fluent Forever. But he also believes that learners see far better results with his system.
Image Credits: Fluent Forever
“We ask [our users]: ‘Why are you with us? Why would you pay for us when you could just get Duolingo for free?” What they come back with is, ‘yeah, your product is rough around the edges. I wish you would fix this, this and that, but you had me thinking in Spanish in two weeks,” Wyner said.
Fluent Forever currently supports nine languages: Japanese, French, Russian, Mexican and Spanish Spanish, Italian, Korean, German and Brazilian Portuguese, with Dutch being the next language the team is tackling.
As Wyner told me, the company had trouble raising in 2019, in part because the service was seeing pretty flat growth at the time. “People are very skeptical about language learning — that is not a sexy field. People don’t like it. The idea of jumping and trying to be competitive with Duolingo was just not appealing to anyone,” he told me. Come 2020, though, growth picked up, even before the COVID pandemic. At the same time, Fluent Forever also participated in Jason Calacanis’ Launch Accelerator.
Looking ahead, Wyner tells me that Fluent Forever is looking at ways to bring live tutors into the loop. Live tutoring online has been done before, of course, and there are some companies like Preply that specialize in it already, but what Fluent Forever wants to do is combine the online language learning service with short live sessions and then use the online component to go back to that conversation over the course of a week or so. One advantage here is that these users — who will likely pay a premium for the live service — will also use their time with live tutors to create their own personalized sentences in the Fluent Forever system, which could then over time become content that’s available to all users, too.
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Vista’s $3.5B purchase of Pluralsight signals a maturing edtech market
On Monday, Pluralsight, a Utah-based startup that sells software development courses to enterprises, announced that it has been acquired by Vista for $3.5 billion.
The deal, yet to close, is one of the largest enterprise buys of the year: Vista is getting an online training company that helps retrain techies with in-demand skills through online courses in the midst of a booming edtech market. Additionally, the sector is losing one of its few publicly traded companies just two years after it debuted on the stock market.
The Pluralsight acquisition is largely a positive signal that shows the strength of edtech’s capital options as the pandemic continues.
Investors and founders told Techcrunch that the Pluralsight acquisition is largely a positive signal that shows the strength of edtech’s capital options as the pandemic continues.
“What’s happening in edtech is that capital markets are liquidating,” said Deborah Quazzo, managing partner of GSV Advisors.
Quazzo, a seed investor in Pluralsight, said the ability to move fluidly between privately held and publicly held companies is a characteristic of tech sectors with deep capital markets, which is different from edtech’s “old days, where the options to exit were very narrow.”
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Vista acquires IT education platform Pluralsight for $3.5B
The hectic M&A cycle we have seen throughout 2020 continued this weekend when Vista Equity Partners announced it was acquiring Pluralsight for $3.5 billion.
That comes out to $20.26 per share. The company stock closed on Friday at $18.50 per share on a market cap of over $2.7 billion.
With Pluralsight, Vista gets an online training company that helps educate IT professionals, including developers, operations, data and security, with a suite of online courses. As the pandemic has taken hold, it has breathed new life into edtech, but even before that, there was a market for upskilling IT Pros online.
This trend certainly didn’t escape Monti Saroya, co-head of the Vista Flagship Fund and senior managing director at Vista. “We have seen firsthand that the demand for skilled software engineers continues to outstrip supply, and we expect this trend to persist as we move into a hybrid online-offline world across all industries and interactions, with business leaders recognizing that technological innovation is critical to business success,” he said in a statement.
As is typical for acquired companies, Pluralsight CEO Aaron Skonnard sees this as a way to grow the company more quickly. “The global Vista ecosystem of leading enterprise software companies provides significant resources and institutional knowledge that will open doors and help fuel our growth. We’re thrilled that we will be able to leverage Vista’s expertise to further strengthen our market leading position,” Skonnard said in a statement.
In a 2017 interview with TechCrunch’s Sarah Buhr, Skonnard described the company as an enterprise SaaS learning platform. It goes beyond simply offering the courses by giving professionals in a given category such as developer or IT operations the ability to measure their skills and abilities against other pros in that category. He saw this assessment capability as a big differentiator.
“Our platform is ultimately focused on closing the technology skills gap throughout the world,” Skonnard told Buhr.
Pluralsight, which was founded in 2004, raised more than $190 million before going public in 2018. The company has 1,700 employees and more than 17,000 customers. The acquisition is subject to standard regulatory oversight, but is expected to close in the first half of next year. Once that happens, the company will go private once again.
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WorkRamp raises $17M to ramp up its enterprise learning platform
Remote learning and training have become a large priority this year for organizations looking to keep employees engaged and up to date on work practices at a time when many of them are not working in an office — and, in the case of those who have joined in 2020, may have never met any of their work colleagues in person, ever. Today one of the startups that’s built a new, more user-friendly approach to creating and provisioning those learning materials is announcing some funding as it experiences a boost in its growth.
WorkRamp, which has built a platform that helps organizations build their own training materials, and then distribute them both to their workforce and to partners, has raised $17 million, a Series B round of funding that’s being led by OMERS Ventures, with Bow Capital also participating.
Its big pitch is that it has built the tools to make it easy for companies to build their own training and learning materials, incorporating tests, videos, slide shows and more, and by making it easier for companies to build these themselves, the materials themselves become more engaging and less stiff.
“We’re disrupting the legacy LMS [learning management system] providers, the Cornerstones of the world, with our bite-size training platform,” said CEO and founder Ted Blosser in an interview. “We want to do what Peloton did for the exercise market, but with corporate training. We are aiming for a consumer-grade experience.”
The company, originally incubated in Y Combinator, has now raised $27 million.
The funding comes on the back of strong growth for WorkRamp . Blosser said that it now has around 250 customers, with 1 million courses collectively created on its platform. That list includes fast-growing tech companies like Zoom, Box, Reddit and Intercom, as well as Disney, GlobalData and PayPal. As it continues to expand, it will be interesting to see how and if it can also snag more legacy, late adopters who are not as focused on tech in their own DNA.
WorkRamp estimates that there is some $20 billion spent annually by organizations on corporate training. Unsurprisingly, that has meant the proliferation of a number of companies building tools to address that market.
Just Google WorkRamp and you’re likely to encounter a number of its competitors who have bought its name as a keyword to snag a little more attention. There are both big and small players in the space, including Leapsome, Capterra, Lessonly, LearnUpon (which itself recently raised a big round), SuccessFactors and TalentLMS.
The interesting thing about what WorkRamp has built is that it plays on the idea of the “creator,” which really has been a huge development in our digital world. YouTube may have kicked things off with the concept of “user-generated content.” but today we have TikTok, Snapchat, Facebook, Twitter and so many more platforms — not to mention smartphones themselves, with their easy facilities to shoot videos and photos of others, or of yourself, and then share with others — which have made the idea of building your own work, and looking at that of others, extremely accessible.
That has effectively laid the groundwork for a new way of conceiving of even more prosaic things, like corporate training. (Can there really be anything more comedically prosaic than that?) Other startups like Kahoot have also played on this idea, by making it easy for enterprises to build their own games to help train their staff.
This is what WorkRamp has aimed to tap into with its own take on the learning market, to help its customers eschew the idea of hiring outside production companies to make training materials, or expect WorkRamp to build those materials for them: Instead, the people who are going to use the training now have the control.
“I think it’s critical to be able to build your own customer education,” Blosser said. “That’s a big trend for clients that want both to rapidly onboard people but also reduce costs.”
The company’s platform includes user-friendly drag-and-drop functionality, which also lets people build slide shows, flip cards and questions that viewers can answer. The plan is to bring on more “Accenture” style consultants, Blosser said, for bigger customers who may not be as tech savvy to help them take better advantage of the tools. It also integrates with third-party packages like Salesforce.com, Workday and Zoom both to build out training as well as distribute it.
“Since 2000, we have seen three major technology shifts in the enterprise: the transition from on-premise to SaaS, the growth of mobile, and the most recent – sweeping digital transformation across almost every part of every business,” said Eugene Lee of OMERS Ventures, in a statement. “The pandemic has forced adoption of a digital-first approach towards customers and employees across virtually all industries. WorkRamp’s platform is foundational to empowering both of these important audiences today and in the future. We are bullish on the massive opportunity in front of the company and are excited to get involved.” Lee is joining the board with this round.
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Is 2020 bringing more edtech rounds than ever, or does it simply feel that way?
Venture capital activity is high at the moment, making it difficult to keep up with the influx of new rounds that are being announced.
Our cup runneth over, and I would much rather be busy than bored, but not all sectors are as busy as others. We’re not drowning in consumer social rounds, for example. We are, however, seemingly suffering from a deluge of edtech investments.
The Exchange explores startups, markets and money. Read it every morning on Extra Crunch, or get The Exchange newsletter every Saturday.
Happily for the TechCrunch crew, Natasha Mascarenhas has become our resident expert on the sector, covering it week in and week out. But even though it’s her beat, I couldn’t help but wonder this morning upon yet another large edtech round coming across the wires, just what is going on in the sector in aggregate?
I had to know. So, I’ve done a little digging into Crunchbase data, parsed through some other information and have something approaching an idea. My goal is to help us both understand if there are more edtech rounds than ever being announced, or if it simply seems that way.
Into the breach!
Edtech VC activity
The best way to start examining at a sector is to take its aggregate performance data and cut it into smaller bits. Companies do this with quarterly results, for example, an utterly arbitrary period of time to report on that is also very useful.
To get a handle on edtech in 2020, I went a bit more caveman and decided to look at the sector’s funding totals in 2020 by merely comparing the first and second half of the year.
Per Crunchbase’s “edtech” category, here’s what that data looks like:
- H1 2020: 211 rounds, $2.68 billion.
- H2 (YTD) 2020: 135 rounds, $5.25 billion.
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Berlin’s Wonder raises $11M for a new approach to video chat where you wander and join groups
If this year has taught us a lesson about the world of work, it’s that collectively, we weren’t very well-equipped in terms of the technology we use to translate the in-person experience seamlessly to a remote version. That’s led to a rush of companies launching new services to fill that hole — cloud computing and data warehousing startups, collaboration platforms, sales tools and more — and today one of the latest startups in the area of videoconferencing is announcing a round of funding to see its business scale to the next level.
Wonder, a Berlin startup that has built a platform for people to come together in video-based groups to meet up, network and collaborate, while also having a bird’s-eye view of a larger space where they can more serendipitously, or more intentionally, interact with others — not unlike in an office or other business venue — is today announcing that it has raised $11 million (€9 million) in a substantial seed round.
The funding was led by European VC EQT Ventures, with BlueYard Capital — which led a pre-seed round in the startup when it was previously called “YoTribe” — also participating.
It comes on the heels of the young startup seeing some impressive traction this year.
Wonder now has 200,000 monthly users from a pretty diverse set of organizations, including NASA, Deloitte, Harvard and SAP, which are using it for a variety of purposes, from team collaboration through to career fairs. The company will use the funding both to add in more features as requested by current users, as well as to hire more people for its team, co-founder Stephane Roux said in an interview. Those features will include sharing files and other technical services, but they will not be piled on quickly or thickly.
“We think of this less in terms of content and more about people,” he said. “The core experience is about live interaction, not just repositories of stuff. We want to build a place for collaboration and communication. Interesting ways to carve up a group virtually.”
Now, you may be thinking: another workplace video app? Hasn’t this $14 billion space race already been “won” by Zoom (which some of us now use as a verb for videoconferencing, regardless of which app we actually use)? Or Microsoft or Google or BlueJeans, or whatever it is that your organization has inevitably already signed up and paid for?
But it turns out that for all the growth and use that these other platforms have had, they are sorely lacking in their overall experience, as it pertains to what it’s like to be in physical spaces with other people. One of the key points, it turns out, is that a lot of solutions are not really built with the user experience of the larger group in mind.
Wonder is built around the idea of a “shared space” that you enter. That space comes not from a VR experience as you might expect, but something much simpler that takes a tip from more rudimentary but very effective older game dynamics. You get a single window where you can “see” from an aerial view, as it were, all of the other people who are in the same space, and the areas within that space where they might cluster together.
Those clusters could be designed around a specific interest (such as marketing or HR or product) or — if the product is being used at a career fair, for example, at a list of different companies taking part; or — at a conference — different conference sessions, plus an exhibition space.
You can move around all of the clusters, or start your own, or sit in the margins with another person, and when you do come together with one or more people, you can join them in a video chat to interact. In the future, the plan is to do more than just join a video chat; you might also be able to access documents related to that cluster, and more.
The clusters can be “public” for anyone to join, or set to private, as you might have in a physical meeting room. The overall effect is that, without actually being in a physical space, you get the sense of a collective group of people in motion.
The startup was originally the brainchild of Leonard Witteler, who built a version of this last year as a coding project at university before showing it to friends and family and getting positive feedback.
As another co-founder, Pascal Steck, describes it, he, Witteler and Roux, who all knew each other, had been looking to build a startup together, but around a completely different idea — a portal for photographers and other creatives in the wedding industry.
Given how drastically curtailed weddings and other group gatherings have been this year, that didn’t really go anywhere at all. But the three could see an opportunity, a very different one, with the software that Witteler had built while still a student. So in the grand tradition of startups, they pivoted.
Wonder had previously been called YoTribe, which sounds a little like YouTube and also plays on the idea of groups of friends who come together around special interests.
And from how Steck and Roux described it to me in an interview (over Wonder of course), it didn’t sound like the initial idea was to target enterprises at all, but people who found themselves a bit at a loss when music festivals and other events like that suddenly died a death because of COVID-19.
Indeed, they themselves were all too aware of the state of the market for videoconferencing apps: it was very, very crowded.
“The space is very busy and some great products are already out there. But as soon as you zoom into this space” — no pun intended, Steck said — “when it’s about large group meetings, these other tools do not allow for serendipitous conversations or bottom-up gatherings, and the list gets very thin very quickly. Our focus is around improving presentations, but in the case of large groups, there is just not a lot out there. Especially something building an association as we know it to how we do things in the offline world. We think we have a unique spot in the market.
“A meeting for three people can use Zoom or Teams perfectly. There is no need for anything else, but for larger groups, that is not the case and it seems like the market is really open for something like Wonder.”
The name “Wonder” is an interesting choice when the startup rebranded from YoTribe. Wonder’s main meaning is surprise and discovery, but it has long been thought and assumed that “wonder” is also connected to the word “wander”. (In fact, the two are not related etymologically, but have often crossed paths and wandered into each other’s territories over the centuries.) Similarly, the idea with Wonder the app is that you can “wander” around a room, and find who and what you are looking for in the process.
Wonder is not the only upstart video app that has picked up some attention in the last several months. In fact, there has been a wave of them launching or announcing funding (or both) in 2020 to try to address the gaps — or opportunities — that exist as a result of the features from the current leaders.
Other launches have included mmhmm (Phil Libin’s latest startup that adds lots of bells and whistles to make the presentations more than just a talking head); Headroom (founded by ex-Google and ex-Magic Leap entrepreneurs, using AI to get more meaningful insights from the video conversations); Vowel (which lets people search across video chats to follow up items and dig into what people said across different calls); and Descript, Andrew Mason’s audio effort, now also has video features.
But if anything, a lot of these newer tools fail to address the shortcomings of what it’s like being a part of a big group using a video app. In fact, many of these newer entrants highlight another set of challenges, those of the speaker, who is thus graced with better presentation tools in mmhmm, or given way better insights into the audience with Headroom, etc.
In any case, Wonder has found, serendipitously, a lot of traction from people who have identified and lamented the problems with so much else out there today. The app is still free to use, and the plan will be to keep it that way until some time in 2021, Roux said. Ironically, he pointed out that many of its current customers are asking to be charged, not least because it lends using it more credibility, which is important with IT departments and so on. All that might mean the charging plan gets pushed up sooner.
In any case, even if companies are also using something else, they are also adopting Wonder, and that has in turn piqued the interest of investors who are interested to see where it might go next.
“Throughout COVID-19, real-time video has become the default for both private and professional interactions, and hybrid working is here to stay,” said Jenny Dreier, investor at EQT Ventures Berlin, in a statement. “No other video tools come anywhere near as close to replicating real-life interactions as Wonder, so the product has explosive potential, already foreshadowed with the platform’s stellar organic growth. It’s incredibly exciting to be working with the team and to be part of the journey; I can’t wait to be a part of their next chapter.”
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Henry picks up cash to be a Lambda School for Latin America
Latin America’s startup scene has attracted troves of venture investment, lifting highly-valued companies such as Rappi and NuBank into behemoth businesses. Now that the spotlight has arrived, those same startups need more talent than ever before to meet demand.
That’s where one seed-stage Buenos Aires startup wants to help. Henry has created an online computer science school that trains software developers from low-income backgrounds to understand technical skills and get employed. The company was founded by brother-sister duo Luz and Martin Borchardt, as well as Manuel Barna Ferrés, Antonio Tralice and Leonardo Maglia.
The Henry team.
The company claims that there’s an estimated 1 million software engineering job openings in Latin America, but fewer than 100,000 professionals that have training suitable for those roles.
“Higher education is only for 13% of the population in Latin America,” says Martin Borchardt, CEO and co-founder of Henry . “It’s very exclusive, very expensive, and has very low impact skills. So we’re giving these people an opportunity.”
With 90% of graduates coming from no formal higher education background, Henry seeks to help bring more back-end junior developers and full-stack developers into startups. Henry offers a five-month course that goes from Monday to Friday, 9 a.m. to 6 p.m., which focuses on software developer skills. Beyond technical training, Henry gives participants job coaching, resume workshops and up-skilling opportunities post-graduation.
To make the school more affordable, Henry looks to take on the same strategy used by Lambda School, a YC-graduate that has raised over $122 million in known funding: income-share agreements. The set-up would allow for boot camp participants to join the program at zero upfront costs, and then only pay once they get hired at a job.
Lambda School’s ISA terms ask students to pay 17% of their monthly salary for 24 months once they earn $4,167 monthly. The students pay a maximum of $30,000. Henry takes a much smaller slice of the pie, partly because salaries are lower in Latin American than in the United States. Henry asks students to pay 15% of their monthly salary for 24 months once students earn $500 a month.
If a Henry student doesn’t get employed in a job that allows them to make $500 a month within five years after the program completes, they are off the hook for paying back the boot camp.
Henry is also focused on helping more women get into the field of software development. Internally, Henry’s remote team is 20% women, 64% men. The current students reflect the same breakdown.
One issue with coding boot camps is that while it might help a student go from unemployed to employed, the lack of credential and degree might limit career mobility past that first job. For that reason, Henry has created a database of alumni resources, including up-skilling and reskilling opportunities in the latest skill, which will be free of charge for graduates.
Henry needs to execute on job placement to be successful in its field. Currently, more than 80% of students in Henry’s first cohort have found jobs, but it’s too soon in the startups’ trajectory to get a stronger metric on that front. About four Henry graduates have been employed by the startup.
The need for more talent in emerging countries has not gone unnoticed. Microverse, also funded by Y Combinator, is similarly using income-sharing agreements to bring education to the masses in developing countries, including spaces in Latin America. Henry thinks the competitor is approaching the dynamic too broadly.
“They’re focusing on all emerging markets and don’t teach to Spanish speakers,” Borchardt said. Henry, alternatively, focuses on Spanish speakers, over 60% of its market in Latin America.
What if Lambda School, the source of Henry’s inspiration, was to break into Latin America? The founder added that the richly funded company has tried, and failed, to expand into international geographies, including China and Europe, due to fragmentation.
Currently, Henry has graduated 200 students and is working with 600 students across Colombia, Chile, Uruguay and Argentina. It plans to expand into Mexico and to bring on Portuguese instruction.
Now, VCs are giving Henry some cash to do so. After going through Y Combinator’s Summer batch, Henry announced today that it has raised $1.5 million in seed funding in a round led by Accion Venture Lab, Emles Venture Partners and Noveus VC. There were also a number of edtech angel investors from Latin American that participated in the round.
“I love the human interaction within instructors and our staff and students,” Borchardt said. “That is something very powerful of Henry compared to a MOOC. The biggest challenge is how do you scale maintaining those assets that bring you that?”
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Sketchy wants to replace boring textbooks with ‘Pixar-like’ videos
Studying for med school is tough. What if it was more Pixar-like?
Sketchy, a visual learning platform, takes complex material that a med student might need to memorize for an exam, and puts the information in an illustrated scene. For example, it uses a countryside kingdom to explain the coronavirus, or a salmon dinner to explain Salmonella. The goal is for a student to be able to mentally go back to the scene while taking an exam, walk through it and retrieve all of the information.
While Sketchy’s strategy might seem odd, it’s actually well-known. The “memory palace” technique matches objects to concepts for easier memorization. So far, Sketchy has more than 30,000 paid subscribers and is on track to hit $7 million in revenue this year.
To charge this growth and break into new content verticals, Sketchy is taking venture capital on for the first time in its seven-year history. Last month, the team announced that it has raised a $30 million Series A led by The Chernin Group (TCG). Today, some of those shares were sold in a secondary transaction Reach Capital, which now accounts for $3 million of the financing. It’s a big combined investment for a company that has been bootstrapping since birth — and the deal could help us see where online education is heading.
The capital comes as Sketchy itself looks to grow past a content service for med students, and into an education platform tackling information in critical fields, from legal to nursing. With the new money, Sketchy plans to build an in-house animation studio and hire more artists and doctors, some of whom are currently consultants.
The story
A big part of Sketchy’s magic, and effectiveness, comes from the fact that all of its founding team have experience in medicine.
The company began in 2013 when then-med students Saud Siddiqui and Andrew Berg were in desperate need of a better study solution for microbiology. To liven up their studying, Berg and Siddiqui began weaving characters into stories to try to memorize concepts — and after a few good test scores, they started creating stories for their classmates.
“Neither Saud or I were artists, so they were pretty bad,” Berg said. As demand continued, the duo put their scraggly sketches on YouTube. Eventually, Siddiqui and Berg roped in classmate Bryan Lemieux, a good artist, to tell the stories with them. Eventually Bryan brought on his twin brother, Aaron, and the founding team was born.
Fast-forward to today: Siddiqui and Berg have finished their residencies in emergency medicine, while the Lemieux brothers chose to leave medicine. All have moved full-time to the company after trying to balance both jobs. Still, the knowledge from working in the field continues to be useful.
The startup’s name has evolved: born as SketchyMedical, it has since rebranded to just Sketchy. While the team chose the name to nod toward its focus on art, the name also has negative connotations. Expect a rebrand in the future.
Despite this, the company claims that it is used by a third of med students in the United States. The majority of its revenues come from 12-month subscriptions for students looking to prep for med school exams like Step 1, and Step 2.
While B2C is a promising business model for many reasons (it’s always easier to convince a human to pay instead of a entire, red-tape-bound institution), the company has also posted promising B2B growth. So far, 20% of its revenue comes from direct contracts it has with medical schools. The founders said that they will pursue both growth methods for now, but based on the price of med school (and student debt crisis), it would be great to see them grow through school contracts so students don’t have to face the brunt of costs.
Beyond the coronavirus
Reach Capital’s Jennifer Carolan, an investor in Sketchy, said that Sketchy’s product market fit with med students is a “strong signal that their content is worth it.” Even with competitors such as Picorize and Medcomic, she’s confident that Sketchy’s product is defensible and can expand into new verticals. Part of the reason the firm approached Sketchy to invest in them is because of low customer acquisition costs, Carolan notes in a blog post.
That said, unlike most edtech companies, which have enjoyed surging new user demand thanks to remote learning, Sketchy didn’t have a huge COVID-19 boom.
“We weren’t one of those people that hadn’t found product market fit and then exploded after COVID,” said Berg. “We’ve always been there and been growing.”
So the real trigger for today’s fundraise wasn’t COVID-19 momentum, but instead, a push to capitalize its sustained growth into more digital curriculum verticals.
Long-term, think of Sketchy as joining a chorus of startups, including Top Hat Jr and Newsela, that want to replace textbook publishers. In a remote world, live, moving content is more rapidly losing value, and upstarts are trying to replace them with more effective and engaging content.
“One of the challenges is just to make sure we don’t go too fast,” Siddiqui said. “We want to keep that degree of quality we’ve maintained for so many years, and do it at scale.”
Editor’s note: The original version of this story stated that Sketchy had raised $32 million. This is incorrect. The company raised $30 million along with a secondary transaction from Reach Capital.
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Aerospace’s Steve Isakowitz to speak at TC Sessions: Space 2020
A mere two weeks remain until we kick off TC Sessions: Space (December 16 & 17), our first conference focused on the technology designed to push galactic boundaries and the people making it happen. Building successful space programs, whether private, public or hybrid combination, requires a well-trained workforce — today and for generations to come. That’s why we can’t wait for Building the Workforce of the Future, a breakout panel discussion featuring Steve Isakowitz.
Isakowitz is the president and CEO of The Aerospace Corporation, a national nonprofit corporation that operates a federally funded research and development center. It addresses complex problems across the space enterprise focused on agility, innovation and objective technical leadership.
In his 30+ year career, Isakowitz has held prominent roles across the government, private, space and technology sectors, including at NASA, U.S. Department of Energy and the White House Office of Management and Budget. Prior to joining Aerospace, he was president of Virgin Galactic, where his responsibilities included the development of privately funded launch systems, advanced technologies and other new space applications.
Building the Workforce of the Future focuses on what’s required to advance the United States’ leading role in space, namely developing a workforce that’s up to the challenge. Panelists also include Dava Newman, MIT’s Apollo Program Professor of Astronautics, and Yannis C. Yortsos, Dean, USC Viterbi School of Engineering and former Zohrab Kaprielian Chair in Engineering, University of Southern California.
More sessions from TC Sessions: Space
The COVID-19 pandemic has created opportunities to imagine new models for how and where to train the next generation of scientists and engineers. This session will explore how universities and industry can work together to integrate professional experience into the curriculum and how universities and industry can work together to build robust talent pipelines that create digitally fluent, agile workers for the future.
The panelists will weigh in on strategies to build diverse workforces — with different perspectives and experiences that drive innovation — as well as new approaches that promote continuous learning for workers throughout their careers.
The space industry requires a deep bench and a long pipeline of engineers and scientists. Tune in to Building the Workforce of the Future for the latest thinking on this vital topic. It’s one session you don’t want to miss.
Late registration tickets are still available, as are discounts for groups, students, active military/government employees and for early-stage space startup founders who want to give their startup extra visibility.
Is your company interested in sponsoring TC Sessions: Space 2020? Click here to talk with us about available opportunities.
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