Lambda School, a San Francisco based remote training startup founded in 2017 has raised $74M in Series C. The funding round was led by Gigafund in participation with Y Combinator, Tandem Capital, GGV Capital, Stripe and GV.
Since its launch, Lambda School has always been able to generate interest in investors. Series A in 2018 ($14M), B in 2019 ($30M) and the current Series C in 2020 are good enough to prove that. After this latest funding, the total funding amount of Lambda School has now raised to $122.1M.
Lambda School’s vision is quite revolutionary. Instead of making their students pay first, they enroll and train their students for 9 to 18 months without any upfront fees. After training, Lambda School also helps its students with interviews and job placement. Even after getting a job, if a student doesn’t earn $50,000 or more, Lambda School doesn’t get anything from the student. ISA (Income Sharing Agreement) based payments for Lambda School only start after their graduates start earning $50K or more. According to Lambda School, they want to bet on their students first instead of asking their students to bet on them.
Currently there are about 3,000 students enrolled, all taking live (not on-demand) classes according to timetables programmed for different timezones. All the classes are set up on a specific personalised basis, with labs to extend your learning and “live” projects to put you in the middle of the kind of work that you would be expected to do with the skills your’re picking up. (It’s partly for this reason that Lambda doesn’t work like a typical MOOC and is more complicated to scale.)
The money will specifically be used to continue expanding the range of what Lambda School offers, both in terms of content but potentially also in terms of developing its business model.
Case in point: just yesterday, the startup got approved by California’s Bureau for Private Postsecondary Education, after a prolonged period of difficulties with the bureau that saw Lambda cease teaching in the state and get fined.
But part of the deal for approval involved Lambda no longer offering Income Share Agreements to students, for the moment at least. With ISAs a cornerstone of how the company presents its deferred-payment model, Allred said Lambda is still working on making ISAs available but is also looking at “student-friendly substitutes” in the interim.
To be clear, getting approved by that board is not the same as accreditation: Lambda School doesn’t offer official degrees but certificates when students complete the courses. Currently there is no plan to get accreditation to offer degrees, Allred said.
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