Career Karma Raises $40 Million To Connect Tech Career Hopefuls To More Education Opportunities
With no end in sight to the Great Resignation, Ruben Harris sees an opportunity. “This is probably the greatest reallocation of labor since World War II,” says Harris, cofounder and CEO of Career Karma, a startup which matches career switchers to alternative education paths that might help them break into the tech industry.
He may be onto something: Career Karma, which earns money for every introduction it makes between a prospective student and a school, is bringing in eight figures (more than $10 million) in annual recurring revenue. On Monday, the San Francisco startup announced a $40 million Series B funding round led by Top Tier Capital Partners, a fund of funds, with participation from GV, as well as existing investors Initialized Capital and SoftBank. Other backers include a long list of family offices and angel investors, the majority of whom are women or people of color, a point of emphasis for Harris, who is Cuban-American.
Founded in 2018 by Harris and twin brothers Artur and Timur Meyster, Career Karma grew out of a podcast the trio launched two years earlier to help outsiders to break into the tech industry. Harris, a native Spanish speaker who graduated with degrees in music and business, had moved to San Francisco without a background in tech or a job offer, but launched his career after securing a contract position at the edtech startup AltSchool. Timur Meyster was able to secure a software engineering job in Silicon Valley after attending the coding bootcamp App Academy.
Strong engagement on the podcast led the three founders to make a go at building a tech product to augment their advice. Career Karma went through the Y Combinator accelerator and initially catered to hopeful developers by linking them to the best fit among hundreds of coding bootcamps, such as App Academy and the Lambda School. It did so using a recommendation engine that quizzed them on their career goals and personal preferences on factors such as price and location. For enrollees, the startup developed a community that connected them to support groups and live audio rooms where they could network and receive advice. Today, about 3 million people visit Career Karma’s website each month, and the company funnels 25,000 of them to training programs.
About 90% of the startup’s revenue comes from fees that the schools pay to Career Karma on a per-person basis for each of those 25,000 people per month who are matched to a program. Its community has made a second revenue stream possible: schools pay Career Karma to host or create content that will give them exposure to the community. The startup has now begun to play matchmaker for other career paths besides software engineering, such as sales and marketing. “We want to be the front end for all job training,” Harris says.
Career Karma is now building on its product—which users can access through the website or an app—to add community features such as job fairs and study sessions for students. For schools, Harris wants to leverage data to create predictive models that analyze insights such as who is most likely to finish a program, or what programs a certain type of student might be most interested in taking. The core goal behind raising its new funds, however, will be to extend the funnel of matchmaking opportunities. Career Karma has established partnerships with three edtech services that host universities’ online course offerings, including 2U. This way, it aims to become a connector to not just bootcamps, but other training programs of different durations as well.
In the enterprise, Harris hopes to establish Career Karma as a benefit for companies which are encouraging their workers to learn new skills or to pivot into new positions. The startup has signed a deal with an unnamed luxury retailer, and Harris is gunning for at least ten more partnerships in 2022. “I think the cost of education is eventually going to go down,” he predicts. “And, it’s going to be fully funded through government, philanthropy and employers.”