Career Karma has made its first millions from a presentation that will resonate with anyone who has ever researched coding bootcamps on Google: a go-to tool for ambitious students and working professionals. Rather than creating its own curriculum, Career Karma helps students find the best programs for their price point and career goals.
The startup, founded in 2018, by Robin Harris, Artur Meester and Timor Meester, is now growing its ambition to serve more than one bootcamp student: Over the past few months, Career Karma has forged partnerships with employers, making it the latest education technology startup focused The consumer has to go the way of the employer benefits as it expands. Now, Harris describes, his vision is that Career Karma will match employees and contractors to the job training programs in the marketplace it has built over the past few years.
To execute at this stage of the business, Career Karma announced today that it has raised $40 million Series B in an undisclosed valuation. The round was led by Top Tier Capital Partners, along with GV (Google Ventures), Bronze Venture Fund, Stardust, Trousdale Ventures and Alumni Ventures Group. Existing investors, including SoftBank, Emerson Collective, Kapor Capital, Backstage, 4S Bay Partners and Y Combinator, also participated in the round.
“Phase 1 has become the Internet’s premier career advisory service, Phase 2 has become the world’s largest professional transition community, and now Phase 3 is the world’s largest recruitment firm,” Harris said in an interview with TechCrunch.
Similar to Handshake and Guild Education, both of which are valued at billions of dollars, Career Karma plays the role of mediator. As an employee benefit, Career Karma will be able to get paid tuition fees for students from the employer, and then re-skill and develop their skills to ideally more advanced job skills.
Employers will act as a no-cost acquisition channel that helps Career Karma work with a lot of employees at scale – a business it has been in since its launch.
“On the user side, we are able to select training programs for the jobs they are interested in, the current skills they have and the job they want,” Harris said. “Eventually we will have a really strong database in-house.”
The shift in Career Karma’s strategy means that its business model will need to be updated as well. Previously, Career Karma charged boot camps when they successfully enrolled a student in one of their programs. Harris says the fees were typically 10% of the enrolling student’s tuition, which can range from $10,000 to $50,000. While this strategy may seem like an incentive alignment – Career Karma only makes money when you successfully place a student inside a bootcamp – it may also pressure the platform to focus more on pace of placement rather than allocating placement. Enterprise businesses won’t necessarily bring the same kinds of pressures, as they will be built to serve professional services, not just matching software.
Now, on the institutional side, Harris said the company is hiring people to help figure out the best new pricing strategy. Other than the companies listed above, there is precedent in this type of hub: Last year, Codecademy raised the same amount in a Series D round to sell its services to the organization. A few weeks ago, the same company sold to Skillsoft in a deal worth $525 million.