Today Lambda School announced a $30 Million Series B financing round led by Bedrock, alongside participation from our friends GV, Vy Capital, GGV, Y Combinator, Ashton Kutcher’s Sound Ventures, Balaji Srinivasan, and other phenomenal investors.
In our Bedrock Founding Letter, we wrote:
“Deeply considering — and defending — the societal consequences of a product is now as elemental to building a startup as was writing a line of code.”
I’d like to share why Bedrock so strongly believes Lambda School will — over the next many, many years — deeply transform the world for the better while building an unstoppable company unlike any the world has seen before.
Sometimes it takes years of deeply considering an opportunity before the right company emerges to unlock it. Since 2012, we’ve been fascinated by the potential of the Income Share Agreement — a novel financial instrument that directly aligns education incentives to career outcomes — and in doing so eliminates the need for student debt (currently $1.4 Trillion of outstanding student loans, roughly ⅓ of which are in default). Concurrently, we’ve been immensely skeptical of the Ed Tech market, which tends to be dominated by companies that either (a) prop up the broken legacy education system, (b) are incentivized to ‘churn and burn’ students so as to maximize upfront tuition revenue whilst competing with dozens of clones, or (c) have no sustainable business model at all.
Lambda School is different. The superficial view from the outside looking in is that Lambda is simply another ‘coding bootcamp’ — albeit one with strong momentum. The nuanced view from the inside looking out is that Lambda is building something new entirely: An income accelerator for people, powered by by both a unique network effect and a relentlessly ambitious vision that most closely resembles Y Combinator. Instead of investing in overlooked and underestimated companies, Lambda invests in overlooked and underestimated people.
Doing so is a truly full stack endeavor: Student selection, education quality, student satisfaction, career placement, alumni outcomes, and employer outcomes are each of equal import. Getting each piece right is extraordinary hard. Since we began getting to know Lambda School over the summer, we’ve gained high conviction that founders Austen Allred, Ben Nelson, and the fast growing Lambda team have the one-of-a-kind wherewithal to pull it all off.
Every component of the company is optimized such that after a student completes their 30 week immersive online education program with zero upfront tuition, their income will be dramatically accelerated in their new career. The outcomes speak for themselves: With over 1000 students enrolled, recent Lambda grads report an average post program salary increase of +$47,000, and an average post program annual income of $85,000. Via Lambda School’s Income Share Agreement model, the company does not make a cent unless a graduate is placed into a career earning at least $50,000/ year.
The dramatic impact Lambda has on individual lives is compounded by its impact on employers. Lambda’s focus on rapid curriculum iteration to continuously improve education quality is wowing employers, who have recently begun hiring Lambda graduates in batches, and listing Lambda as a credential on par with 4-year undergraduate degrees in job postings.
Lambda School is architected to be both infinitely scalable and infinitely accessible. It will thus accrue an ever growing data moat as it scales — and it will utilize that data to continuously improve every facet of its offering — powering a multimodal network effect: The more well trained students in a variety of disciplines that Lambda graduates, the more valuable Lambda becomes to more employers. In becoming more valuable to more employers, Lambda becomes more valuable to incoming students. In parallel, the largest network effect in education will emerge amongst Lambda School alumni; one with endless possibilities.
Technology’s impact on the job market is neither all good nor all bad, but it is undeniably profound, and will become only more so in the years to come. Beyond serving as an income-oriented substitute for a traditional degree, Lambda School also serves as a critical retraining resource for those whose careers’ technological advancement has left behind. In our Bedrock Founding Letter, we wrote:
“As markets shrink and marketable skills change, many are trapped in negative sum careers with no clear escape.”
Plainly, Lambda School is the antidote.
We applaud the Lambda School team for their remarkable achievements to date. We applaud the students of Lambda School for their remarkable agency. And here at Bedrock, we couldn’t be more excited to play a small role in helping to build a remarkable company for the ages.