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Holberton raises $20M as it pivots to become an edtech SaaS company
Holberton, the education startup that started out as a coding school in San Francisco and today works with partners to run schools in the U.S., Europe, LatAm and Europe, today announced that it has raised a $20 million Series B funding round led by Redpoint eventures. Existing investors Daphni, Imaginable Futures, Pearson Ventures, Reach Capital and Trinity Ventures also participated in this round, which brings Holberton’s total funding to $33 million.
Today’s announcement comes after a messy 2020 for Holberton, and not only because the pandemic put a stop to in-person learning.
The original promise of Holberton was that it provided students — which it selects through a blind admissions process — with a well-rounded software development education akin to a college education for free. In return, students provide a set amount of their salary for the next few years to the school as part of a deferred tuition agreement, up to a maximum of $85,000.
But early last year, California’s Bureau for Private Postsecondary Education (BPPE) directed the school to immediately cease operation, in part because the agency found that Holberton had started offering a new, unapproved program. This program, a nine-month training program augmented by six months of employment, required students to pay the full $85,000 cost of its approved programs. After a hearing, the BPPE allowed Holberton to continue to operate its other programs. A number of students also accused the school of not giving them the education it had promised.
Throughout this period, Holberton continued expanding, though. It opened campuses in Mexico and Peru, for example. Indeed, it doubled the number of schools in its system from nine to 18 in 2020.
But on December 17, 2020, Holberton voluntarily surrendered its operating license in California. The day before, Holberton announced that it would not re-open its campus in San Francisco, which had been shut down since March because of the pandemic. Holberton co-founder Sylvain Kalache argued that the school would be best positioned to achieve its mission by “working with amazing local partners who operate the campuses and deeply understand their markets’ unique needs” and not by operating its own campuses.
It now thinks of itself more as an “OS of Education” that offers franchised campuses and education tools.
In January, California’s attorney general struck down the fraud allegations against the school. “California was the only market in which Holberton faced any regulatory challenges,” Kalache wrote in the company’s first public acknowledgment of the lawsuits. “With this now behind us, we are excited to move forward with our original mission of providing affordable and accessible education to prospective software engineers around the world.”
Clearly, that’s how Holberton’s funders feel about this, too.
“They’ve proven successful in breaking down barriers of cost and access while delivering a world-class curriculum,” said Manoel Lemos, managing partner at Redpoint eventures. “With the concept of ‘OS of Education’ as a service, they provide customers with all the tools they need for success. Customers can be nonprofit impact investors who want to improve local economies, education institutions who want to fill gaps in how they teach in a post-COVID learning environment, or corporations who want to provide the best training possible as education providers themselves or as employee development programs.”
Holberton founder and CEO Julien Barbier tells me that, today, “for the first time since our creation, we have started working with universities to help them create a better experience and add hands-on education on top of their traditional methodology. Everyone’s happy: the school, the students, and the teachers — because they prefer to focus on teaching and not spend huge amounts of time correcting projects.”
He expects to see 5,000 students join this year, up from 500 in 2019, and see the network expand with new schools in the U.S., Europe, LatAm and Africa. He also noted that the company already has customers for its “OS of Education” tools for auto-grading projects and its online programs. Just this week, Holberton Tulsa announced plans to more than double its physical campus in the city.
“Raising funds is helping us support and accelerate our vision of creating this ‘OS of education.’ Many educational entities need help and tools to better support their students and their staff. It is now that they need our help. Again, COVID has accelerated the digital transformation, and clearly, there are a lot of gaps that need to be filled,” he said. “[…] We are now a SaaS company which charges other businesses, universities or non-profits to use our tools and/or contents so that they can run their education/training programs at scale, with a better experience, while increasing the quality of education.”
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Ne-Yo wants to make Silicon Valley more diverse, one investment at a time
Dressed in a Naruto t-shirt and a hat emblazoned with the phrase “lone wolf,” Ne-Yo slouches over in a chair inside a Holberton School classroom. The Grammy-winning recording artist is struggling to remember the name of “that actor,” the one who’s had a successful career in both the entertainment industry and tech investing.
“I learned about all the things he was doing and I thought it was great for him,” Ne-Yo told TechCrunch. “But I didn’t really know what my place in tech would be.”
It turns out “that actor” is Ashton Kutcher, widely known in Hollywood and beyond for his role in several blockbusters and the TV sitcom That ’70s Show, and respected in Silicon Valley for his investments via Sound Ventures and A-Grade in Uber, Airbnb, Spotify, Bird and several others.
Ne-Yo, for his part, is known for a string of R&B hits including So Sick, One in a Million and Because of You. His latest album, Good Man, came out in June.
Ne-Yo, like Kutcher, is interested in pursuing a side gig in investing but he doesn’t want to waste time chasing down the next big thing. His goal, he explained, is to use his wealth to encourage people like him to view software engineering and other technical careers as viable options.
“Little black kids growing up don’t say things like ‘I want to be a coder when I grow up,’ because it’s not real to them, they don’t see people that look like me doing it,” Ne-Yo said. “But tech is changing the world, like literally by the day, by the second, so I feel like it just makes the most sense to have it accessible to everyone.”
Last year, Ne-Yo finally made the leap into venture capital investing: his first deal, an investment in Holberton School, a two-year coding academy founded by Julien Barbier and Sylvain Kalache that trains full-stack engineers. The singer returned to San Francisco earlier this month for the grand opening of Holberton’s remodeled headquarters on Mission Street in the city’s SoMa neighborhood.
Holberton, a proposed alternative to a computer science degree, is free to students until they graduate and land a job, at which point they are asked to pay 17 percent of their salaries during their first three years in the workforce.
It has a different teaching philosophy than your average coding academy or four-year university. It relies on project-based and peer learning, i.e. students helping and teaching each other; there are no formal teachers or lecturers. The concept appears to be working. Holberton says their former students are now employed at Apple, NASA, LinkedIn, Facebook, Dropbox and Tesla.
Ne-Yo participated in Holberton’s $2.3 million round in February 2017 alongside Reach Capital and Insight Venture Partners, as well as Trinity Ventures, the VC firm that introduced Ne-Yo to the edtech startup. Holberton has since raised an additional $8 million from existing and new investors like daphni, Omidyar Network, Yahoo! co-founder Jerry Yang and Slideshare co-founder Jonathan Boutelle.
Holberton has used that capital to expand beyond the Bay Area. A school in New Haven, Conn., where the company hopes to reach students who can’t afford to live in tech’s hubs, is in development.
The startup’s emphasis on diversity is what attracted Ne-Yo to the project and why he signed on as a member of the board of trustees. More than half of Holberton’s students are people of color and 35 percent are women. Since Ne-Yo got involved, the number of African American applicants has doubled from roughly 5 percent to 11.5 percent.
“I didn’t really know what my place in tech would be.”
Before Ne-Yo’s preliminary meetings with Holberton’s founders, he says he wasn’t aware of the racial and gender diversity problem in tech.
“When it was brought to my attention, I was like ‘ok, this is definitely a problem that needs to be addressed,’” he said. “It makes no sense that this thing that affects us all isn’t available to us all. If you don’t have the money or you don’t have the schooling, it’s not available to you, however, it’s affecting their lives the same way it’s affecting the rich guys’ lives.”
Holberton’s founders joked with TechCrunch that Ne-Yo has actually been more supportive and helpful in the last year than many of the venture capitalists who back Holberton. He’s very “hands-on,” they said. Despite the fact that he’s balancing a successful music career and doesn’t exactly have a lot of free time, he’s made sure to attend events at Holberton, like the recent grand opening, and will Skype with students occasionally.
“I wanted it to be grassroots and authentic.”
Ne-Yo was very careful to explain that he didn’t put money in Holberton for the good optics.
“This isn’t something I just wanted to put my name on,” he said. “I wanted to make sure [the founders] knew this was something I was going to be serious about and not just do the celebrity thing. I wanted it to be grassroots and authentic so we dropped whatever we were doing and came down, met these guys, hung out with the students and hung out at the school to see what it’s really about.”
What’s next for Ne-Yo? A career in venture capital, perhaps? He’s definitely interested and will be making more investments soon, but a full pivot into VC is unlikely.
At the end of the day, Silicon Valley doesn’t need more people with fat wallets and a hankering for the billionaire lifestyle. What it needs are people who have the money and resources necessary to bolster the right businesses and who care enough to prioritize diversity and inclusivity over yet another payday.
“Not to toot the horn or brag, but I’m not missing any meals,” Ne-Yo said. “So, if I’m going to do it, let it mean something.”
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Holberton raises $8M for its full-stack engineering school
Over the course of the last few years, the Holberton School of Witchcraft and Wizardry Engineering has made a name for itself as one of the more comprehensive coding schools. The two-year program trains full-stack engineers with a focus on the basics of engineering and sees itself as an alternative to a traditional college experience. Today, the San Francisco-based school announced that it has raised an $8.2 million Series A round that will help it expand its programs.
The funding round was led by current investors daphni and Trinity Ventures. The Omidyar Network joined as a new investor. With this, the school has now raised a total of $13 million.
Holberton is currently teaching about 200 students (who have to pass a pretty rigorous entry exam) and the plan is to scale the program to 1,000 students per year. That’s a larger cohort than the computer science programs taught at even the biggest schools currently. Past students have found jobs at companies like Apple, IBM, Tesla, Docker and Dropbox. Instead of charging tuition, the school takes a 17 percent cut of its graduates’ salary for the first three years after they get their jobs.
To enable its expansion to 1,000 students, the team recently moved into a far larger space in San Francisco that can handle about 500 students. As the team has repeatedly told me, part of its mission is to bring in a diverse group of students — and one that isn’t held back by the prospect of student loans. In its recent classes, about 40 percent of the students were women, for example, and a slight majority of students were minorities. That’s sadly still quite unusual in Silicon Valley.
“Everyone deserves a first-rate education. Students at Holberton come from all walks of life, from cashiers to musicians to poker players (as well as right out of high school) without the money, background and education needed to be ‘Ivy League material,’” said Julien Barbier, co-founder and CEO of Holberton. “With Holberton, they now have the same opportunity as the more fortunate and they leave with skills to learn for a lifetime. Our students compete (sometimes after only 9-12 months) with Ivy League graduates and get the jobs.”
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