It was a small moment for Irma Olguin Jr., but a memorable one. One night about 15 years ago, she was working late as a computer engineer for the city of Cincinnati. She ordered a plain cheese pizza and handed the deliverer money without worry over whether she gave exact change.
It then dawned on the self-described Latinx daughter of farm laborers from rural central California, the first person in her family to finish college—she was climbing the social ladder. “Technology transformed my life,” says Olguin, 38.
Fast-forward to today. Olguin serves as co-founder and co-CEO of Bitwise, which aims to help other underrepresented people in the tech industry land well-paying jobs as programmers. So far, her base of operations has been Fresno, Calif., about 15 miles north of her hometown of Caruthers. Now, she has the resources to bring her work to another city.
Earlier this month, the tech-education startup got a big assist in the form of a $27 million Series A round, led by Kapor Capital and New Voices Fund. This marks one of the largest publicly known Series A rounds for an education startup this year, according to EdSurge data.
The round included a plethora of participants, including the Quality Jobs Fund, a project from New World Foundation with funding from the Federal Home Loan Bank of San Francisco.
Other participating investors include Motley Fool Ventures, Lumina Foundation, Acumen America, Plum Alley, Aera VC, GingerBread Capital, Kat Taylor, Morgan Simon, Reach Capital and a joint venture by investors Arlan Hamilton and Mark Cuban. Libra Foundation and Pi Investments Innovation also participated.
Olguin believes she and her team are helping to change the economy and reputation of Fresno, a city not known for contributions to the tech industry. Fresno is home to about 519,000 people, half of them Latino, about 9 percent of them black. About 28 percent of Fresnans live below the poverty level—almost double California’s average. About 9 percent of Fresnans were unemployed in March, also double the state average that month.
The next city Bitwise has planned for expansion is Bakersfield, Calif., over 100 miles south of Fresno. Bakersfield is smaller than Bitwise’s hometown, with a similar population that is about half Latino and 9 percent black.
Founded in 2013 by Olguin and Jake Soberal—Olguin’s co-CEO and former intellectual property attorney—Bitwise claims to have trained more than 1,000 software developers, many of whom had little or no background in programming.
Last December, Bitwise received $350,000 as part of a two-year grant from the James Irvine Foundation to train unemployed and underemployed workers in the San Joaquin Valley for middle-wage tech jobs.
The third business segment within Bitwise is real estate. Bitwise leases coworking space out of multiple locations in Fresno. At one location, called Hashtag, rent for individuals is $39 a month. The company has two more Fresno locations planned to open by 2020.
Olguin wants to open more locations in the future, in places outside of the usual tech hubs like San Francisco and Boston. “This is a successful model that can work in any underdog city,” she says. The company is currently negotiating a lease in Bakersfield, and plans to open shop within 12 months with 50,000 square feet that can house 500 students.
To John Duong, the mix of business segments that make up Bitwise presented an attractive investment opportunity to Lumina Impact Ventures, the investment arm of Lumina Foundation, a nonprofit that supports postsecondary education and workforce development efforts. Over the years, Duong, the investment arm’s managing director, has seen plenty of pitches from technology-training providers and coding bootcamps. He says he and his team have passed on at least five of them.
Bitwise’s three-pronged business—part programming school, part software development shop and part landlord—did not concern investors like Duong. If anything, the connections between the three segments gives Bitwise the type of financial diversity and sustainability that Duong says other programming schools lack.
That model appears to work well so far—Olguin says the company is currently profitable. Bitwise has a total of about 100 full-time employees and expects to grow its headcount as it expands. Olguin adds that she is open to acquiring other businesses as well.
For Duong, the Bitwise investment also aligns with Lumina’s philanthropic mission to help underserved and underrepresented students. Half of the student population is female; half are people of color. Twenty percent are first-generation immigrants.
When it came to actual course content, he found that Bitwise’s classes focus on getting students to think analytically about programming, as opposed to memorizing and regurgitating lines of code—something he worried about with other bootcamps that pitched him, Duong says.
Arturo Ceballos, 26, is one Bitwise student to get hired by the company. Around 2014, Ceballos got interested in the company after seeing his younger sister build a website from scratch during her time as a Bitwise student.
Neither Ceballos sibling had graduated college, to the disappointment of their parents, who had moved to California from Mexico. “I was a kid with a lot of energy, and I didn’t know what I wanted to do,” says Ceballos. “We had financial struggles in the family. I didn’t want to waste time and money going about not knowing what to do.”
He completed his classes and now works full time for the company building software for clients. He says he enjoys the work much more than the sales job he had before Bitwise. “I always thought coders were the guys in their moms’ basements,” he says. “I never saw that as something I wanted to do. I was super wrong.”