Fresh off a $40M round, Career Karma CEO dreams of an IPO
Ruben Harris, CEO at Career Karma, didn’t mince words when he said he wants to run the workforce development startup as a public company.
If LinkedIn could serve white collar workers and exit for $26.2 billion, then Career Karma, which is serving a larger workforce of blue collar workers, could also have a big exit in its future, Harris told Backstage Capital’s Green Room.
Harris envisions eventually going public while building “the largest workforce development company of all time,” he said. But unlike LinkedIn, which eventually sold to Microsoft after going public, Harris is not interested in selling Career Karma. Instead, he wants to be the acquirer.
“I don’t think I went through being an investment banker for no reason,” he said. “I think M&A is one of the most underutilized things in tech.”
Up until now, Career Karma has focused solely on bootcamps. Moving forward, the plan is to match workers with any type of effective job training, Harris said. Career Karma also has its eyes set on expanding into enterprise and helping companies offer education benefits to their employees. In an ideal world, Harris would also start a venture arm to invest in Career Karma alumni who start their own businesses.
“At the end of the day, nothing moves without people,” he said. “And I want to be the people connector. The social engineer.”
Career Karma is well positioned to achieve the goals Harris has set for the company. Last month, Career Karma announced a $40 million Series B round at an undisclosed valuation from investors such as Top Tier Capital Partners, GV, Initialized Capital, SoftBank and, yours truly, Backstage Capital.
Harris said it’s important for Career Karma to have investors on the cap table that are representative of the world, as well as outspoken in their beliefs.
“I think a lot of people are quiet supporters of the movement or they’re quiet supporters of any social issue,” Harris said. “I think it’s important for us to have actions that are louder than words but we also need words, too. Because if we don’t speak up or we don’t shed light about what’s actually happening, then all the impact will go unnoticed.”
That’s what Harris said he likes about Backstage Capital founder Arlan Hamilton.
“She doesn’t hold back,” he said. “She will tell it like it is, positive or negative. And I need people like that on my side.”
Backstage Capital isn’t disclosing the size of its latest investment in Career Karma, but it came as a follow-on investment from a new $30M fund, Opportunity Fund I. In 2018, Backstage Capital invested $25K in Career Karma from a $1.25 million fund. Career Karma’s latest round, on paper, represents a return of two-thirds of that fund.
“This shows you what happens when you don’t listen to naysayers who aren’t in the arena with you,” Hamilton told Green Room. “We kept our heads down, treated $25k checks like millions, and did the work, and now we have single rounds of funding marking up our funds by two-thirds at a time. It’s on paper, of course, but that’s how venture works, and for so long, people underestimated our strategy.”
When Backstage started making $25K investments, critics would say that Backstage was not a “real” venture firm, Hamilton said. But Hamilton said she feels confident that she’s proved those haters wrong.
“We’ve had multiple investments that started as $25K and are worth far more on paper or have had some other type of ROI, like getting our foot in the door for a larger investment, being able to track companies and help with syndicating their rounds, etc,” she said.
In the case of Career Karma, Backstage’s early $25K investment in the company has led to high returns on paper and a foot in the door for a bigger investment.
“It’s not surprising because this was by design, but it is thrilling,” Hamilton said about Backstage’s potential return on investment in Career Karma. “I’m extremely proud of Ruben and his team. I feel a kinship to him, as a founder of Backstage, growing side by side with our founders.”
