Why we are backing Masterschool — the edtech fostering career mobility for all
The Great Resignation is not going anywhere
It’s safe to say we’ve entered uncharted territory. Last year alone, more than 47 million Americans quit their jobs. This was followed by a huge upsurge in workers, especially those previously in low-wage service roles, reskilling into more lucrative jobs in technology to address the growing wage stagnation.
These shifts in employee behavior have coalesced with a worldwide shortage of tech talent. According to a recent survey by Gartner Global, the tech talent shortage is the most significant barrier to the adoption of 64% of new technologies. In fact, by 2030, $162bn of revenues could be lost in the US alone due to a lack of high-tech workers.
Children growing up in 2022 are predicted to have 40 different jobs in 10 completely different career paths throughout their lives. In contrast, over half of baby boomers have been working in the same firm or organization — often for 20 years or more. So we’ll have to accept that most people will have many careers throughout their lifetimes, and non-linear career paths will become the new norm.
A $100m seed round to democratize access to upskilling
Enter Masterschool, a company that leverages a network of schools to teach exceptional students the tech skills needed to become software engineers or data scientists. To fix the broken system and democratize access to education, Masterschool has flipped the model on its head; students do not pay upfront tuition fees and only start repaying their fees upon job placement.
The reason this new approach is so refreshing is because most schools offer standardized generalist courses and require students to pay for their tuition — often $15,000 or more — upfront with no success guarantee, creating a big barrier to social mobility. Additionally, the perception that pre-existing experience is required to learn how to code has historically deterred many applicants and created a hindrance for more diversity in tech. Masterschool plans to raise diversity in tech substantially by cutting the number of years required to acquire the skills needed for these careers and re-engineering the candidate assessment processes.
The company — which accepts applicants in the low single digits — focuses on students with raw intellect and grit, irrespective of their background and previous experience, and is inherently global, with a current focus on Israel, Germany, and the US. The program design and the courses are elaborated and conducted with the help of “Masters”. The Masters are influential subject matter experts and breaking-into-tech advocates such as Charlotte_ChZ with 2 billion views on Tiktok and Keith Galli and Niklas Steenfatt, who each boast more than 160,000 YouTube subscribers. Masters teach in an engaging way and focus on applied skills and associated professional and technical skills. They support and mentor current students through lectures, fireside chats, and Q&As, to ensure application-based learning and maximize their chances of succeeding in finding a dream job, while Masterschool provides the infrastructure to run the courses (dynamic syllabus system, school support, instructors, progress monitoring tools, etc…).
Moreover, each school is assigned its dedicated focus (e.g., cybersecurity), ensuring that enrolled students are educated to be true specialists. The combination of extreme selectivity, role model support, and specialization yields a placement rate 15 percentage points higher than the best comparable coding bootcamps.
Why it works
On the foot of extraordinary students, the placement rate, and the program’s quality, Masterschool has built an excellent reputation amongst leading tech companies and now offers B2B courses. These courses effectively act as an extension of the hiring funnel and an alternative hiring channel; students are sourced, educated, and trained to fit the partner company’s specific needs. Today, the B2B offering, which boasts a near-perfect placement rate, is very popular amongst international technology companies who were early users of it.
By the end of this year, Masterschool plans on expanding both its B2C and B2B offering and more than tripling the number of schools in its network to 100 schools and covering different tech domains for thousands of learners globally.
There’s no “i” in team
We first met the Masterschool team through a combination of luck, vertical focus (at Target Global, we’ve done extensive research and mapping of sectors of interest, including EdTech, FinTech, and SaaS), and team design (one of our colleagues had experience in producing Massive Online Open Courses (MOOCs)). Bootstrapped for three years — despite great demand — the company had been working tirelessly and had an impressive MVP before accepting to meet with external investors. Right after our first meeting, we bought into the team’s vision that, by 2030, one of the largest companies globally would be an edtech company fixing a world where global student debt amounts to $1.5 trillion and talent shortage is expected to result in $8.5 trillion unrealized revenues by 2030.
In just over a year since opening its first school, Masterschool has established a further 29 schools, educated over 1,000 students from 22 countries, and is well underway to achieve its mission of allowing everyone to build inspiring careers throughout their lifetimes. Masterschool is the true embodiment of the future of edtech, and we are thrilled to be working with Otni, Michael, and the entire Masterschool team alongside Group 11, Pitango, Dovi Frances, and Sir Ronald Cohen to help the company surpass its boldest ambitions.