Blog 17: Bloom Institute of Technology

Advancing tech skills by removing financial barriers to education

Company: Bloom Institute of Technology (BloomTech), formerly known as Lambda School, provides computer science education and training services intended to help students learn to code and get placed in IT firms. The company's services are offered via online classes that bear no upfront costs as one pays only after being placed in a job. The courses enable students to gain hands-on training and skills to find placement opportunities in reputable companies.

HQ Location & Year Founded: San Francisco, 2017

Founder: Austen Allred is a native of Springville, Utah, whose start-up journey began in 2017 while participating in Y Combinator, a San Francisco-based seed accelerator. This experience became the foundation of BloomTech’s rapid growth. Previously, Austen was the co-founder of media platform GrassWire. He co-authored the growth hacking textbook Secret Sauce, which became a best-seller and provided him the personal seed money to build BloomTech. Austen’s disruptive ideas on the future of education, the labor market disconnect, and the opportunity of providing opportunity at-scale have been featured in: The Harvard Business Review, The Economist, WIRED, Fast Company, TechCrunch, The New York Times, among others.

Funds Raised and VC Investors: $120 million from Alpha Bridge Ventures, Bedrock, Bow Capital, Buffalo Ventures, Caffeinated Capital, Chapter One Ventures, Gelt Venture Capital, GGV Capital, GigaFund, GV, Hemisphere Ventures, Imagine K12, Liquid 2 Ventures, Mastry, Neo Innovation, Outbound Ventures, Pioneer Fund, Riverside Ventures, S2 Capital, Social Stars, Soma Capital, Sound Ventures, Tandem Capital, Tandem Expansion Fund, TSVC, VY Capital, Y Combinator, Zillionize

1. Where did the idea for BloomTech originate?

I was living in small town Utah, dropped out of college, moved to Silicon Valley, and taught myself to code. People I knew back in Utah wanted to do the same to get into tech. My original idea was to build an online coding school by simply charging for courses. However, as I talked to prospective students, it became clear that not everyone had $10,000 to enroll in school. That makes a lot of sense of course. A $10-15,000 loan plus interest can be devastating for someone working a low wage job. I thought then that we should offer that student could pay a little upfront and more later once they have higher income. This then evolved to our current model of paying nothing upfront, and then idea really blew up.

2. What is the key problem that BloomTech intends to solve?  

We are built for any adult who is looking for a career change. Some of these people will be interested in programming and data science and a subset of those will have the right level of intelligence and commitment to make it. Over our five years, we have tested a lot of different things to know or predict if someone will be the right fit. We also help with the job placement piece. We are willing to take on the risk that the student will eventually be able to pay us based on a portion of their future income. For a student, this becomes elegant experience. Within about 20 minutes, we can run enough tests to decide if a student is ready to be taught the material. We offer three tracks: full stack web development, back end (built in partnership with Amazon), and a data science track.

The student has a contract to pay us back only once they are earning sufficient income. It is an outcomes-based loan, which will be forgiven if the student is unable to find job and no payments are required until they have reached a certain income threshold.

3. How are you most differentiated as a service?

We are not a cheap option per se, however we see our students increasing their lifetime income by as much as $4 million. The scary question for a student who is contemplating studying computer programming and switching fields is what if it doesn’t work out and they don’t get a job. This is what we solve for.

We have invested heavily in our product and R&D. It is almost entirely live content, but we will make it more flexible. Our aim to be like Peloton on steroids where students can pick schedule that is fully interactive.

We also are building out employer relationships as we look to help our students get hired. We do not place anyone at partner companies, however. We help them build a resume and provide career coaches to guide them along the way. We teach to students to fish and make it easy to network and apply to jobs.

4. What are the company’s key accomplishments to date?

Our students have been hired at 40 of the Fortune 100 companies. We’ve had 3,000 hired software engineers across the US from both startups and household names. We can now connect students through our partners or alumni.

5. What lies ahead in the product plans for BloomTech?

Right now, everything is working. Our focus is to make it more accessible. We currently only have full-time students. 31 is median age. Targeting only full-time students is difficult. We aim to broaden this to a wider market.

6. What are the long-term strategic growth objectives?

In the long run, we want to be seen as a place where people can raise their hand and figure out what they have to do to increase income, train and get hired in a better career without taking on financial risk. A tuition refund guarantee is key for this.

We also need to decide when to go international. We have done pilots in Africa, India, and elsewhere, and have built a product that will scale well. We want to train everyone everywhere.

Ron’s Take

Few professions offer such a steep income step change as computer programming and data analysis. The demand from employers without question far exceeds supply. Yet the skills for an individual to enter the workforce in software development do not necessarily require a four or even two-year college degree. It requires a specific skill set that can be taught digitally to anyone in the world with the right mindset and aspirations at any rung of the economic ladder. BloomTech’s model of de-risking the financial decision for a student to enter this field is a noble mission that will bear great fruit to students, employers and governments and societies that yearn for technology gurus who can help push products and innovation forward.