Notable Silicon Valley players back for-profit community college
By Paayal Zaveri | Bloomberg
CampusGroup Inc., a for-profit community college offering two-year degrees and certifications, has raised $46 million from a laundry list of Silicon Valley players — including Sam Altman, Peter Thiel’s Founders Fund and Figma Inc. chief Dylan Field.
The deal was led by General Catalyst, which stressed the urgency of injecting more technology and innovation into US higher education. Campus operates mostly online — offering associates degrees as well as a series of certification programs for fields like cosmetology, phlebotomy and technical support.
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Other investors in the company include Joe Lonsdale’s 8VC, Discord co-founder Jason Citron, Notion Labs Inc. co-founder Akshay Kothari and basketball legend Shaquille O’Neal. (Bloomberg Beta, the venture capital arm of Bloomberg LP, is also an investor.)
The company’s mission is to boost college completion rates and keep costs down, said Campus founder and Chief Executive Officer Tade Oyerinde.
“I think we have to figure out how to bring world-class education to people without having them go into debt,” he said. “That’s what we’re trying to do.”
After completing a two-year program at the school, Campus students can transfer to a four-year college to earn their bachelor’s degree. Tuition is $7,200 per year, an amount that can be recouped by students who qualify for federal Pell Grants.
While for-profit colleges have a checkered history, Oyerinde and his investors believe that a new format and new technology will make the difference for students otherwise at risk of not completing their studies or going into debt.
“He really has a transformational concept,” said Ken Chenault, General Catalyst chairman and managing director. “He is engineering the college experience from the ground up and incorporating technology and experiences that today’s students want.”
Young people in the US are increasingly questioning the pay-off of a college degree, said Chenault, who was formerly the CEO of American Express Co. “Academia simply hasn’t kept pace with expectations and aspirations, while the cost has increased,” he said in a statement, adding that Campus’ model has the potential to help address those issues.
While similar to a community college, Oyerinde said the school offers more high-touch digital support to students, aiming to boost completion rates. Campus provides students with a “success coach” who guides them through their curriculum, as well as tech resources like a laptop and high-speed Wi-Fi. It also offers classes from professors who teach at schools like Stanford University, the University of California and Howard University.
Campus has now raised $101 million in total funding. The company declined to share its latest valuation. Oyerinde said he plans to use the new funds to expand operations and hire more professors and staff.
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