ImpactAlpha, January 8 – Lambda School has raised a $30 million Series B equity round with plans to expanding its California-based pay-as-you-earn coding school in Europe and Canada. Bedrock Capital led the round, with participation from Vy Capital, GGV Capital, Sound Ventures and prior investors Y Combinator and GV, Google’s venture arm.
Lambda is among a growing number of vocational education and workforce training companies revamping the way adults acquire (and pay for acquiring) skills. The school offers a 30-week-long coding curriculum, for which students pay nothing upfront. Once they secure a job over $50,000, they repay 17% of their income for two years, or up to $30,000. If they don’t land a job, or find one that pays less than $50,000, they pay nothing.
The school had enrolled more than 700 students as of October, and says says 83% of graduates so far have landed a job in six months.
Lambda is among a growing number of institutions testing the so-called “income share agreement” model to close education opportunity and employment gaps. In November, Better Future Forward, a nonprofit focused on making ISAs more accessible, launched a pair of funds to test the viability of ‘ISAs’ with more than 200 low-income students in the city of Chicago and states of Minnesota and Wisconsin.
There are critics of the model: Lambda’s 17% repayment commitment, for example, is hefty. But the concept represents a shift from the traditional education financing model that has locked U.S. students into $1.5 trillion in debt, with most obligated to repay regardless of employment.
The model is catching on outside the U.S. as well, as evidenced by Lamba’s own international expansion plans and other recent deals. (Lambda’s latest funding news comes on the heels of African Leadership University’s $30 million equity round. ALU also offers skills training and leadership courses to African students and adults on a pay-as-you-earn basis.)
Lambda’s Series B round follows its $14 million Series A round in October.