Just a week after welcoming its first cohort of 30 students to class, startup university MissionU is opening its doors to a few other guests: education-minded investors. The company announced it has raised $8.5 million in a Series A round led by FirstMark Capital. Existing investors First Round Capital, University Ventures, Box Group, Rethink Education and Learn Capital also participated, along with new investors John Doerr and Omidyar Network.
The latest funding brings MissionU’s total to $11.5 million, following a $3 million seed round last year. CEO Adam Braun tells EdSurge the new funding will go towards adding new cohorts of 25 to 30 students, and eventually build out the program in other U.S. cities.
“This fundraise is focused on ramping up additional cohorts in the Bay Area and enables us to plan for the addition of one new city in 2018 and one new major in 2019,” Braun says.
Geographic expansion will take a backseat for now, however, as the company will prioritize adding more cohorts to its existing San Francisco-based program. Come January 2018, Braun plans to have three start dates within the year, one in January, May and September, and eventually run multiple cohorts on the same start date.
MissionU may be best known for its income-share tuition model where students do not have to pay any tuition before they graduate. Instead of paying their way through college—either out of pocket or taking out loans—students promise to pay 15 percent of their income for three years after finding a job that pays at least $50,000.
The school is not currently profitable, but Braun says his team anticipates that by 2020 they will begin seeing tuition dollars coming back to fund the program more sustainably.
Tuition dollars are the only source of revenue for MissionU on the horizon, but the CEO hints that the school has “plans to explore several additional lines” of revenue in the future. For now, though, the priority is “focusing on quality for our students.”
Roll call
When the program launched earlier this year, Braun told EdSurge MissionU was targeting traditional college-age students around 18 to 22 years old. But you will only find a couple MissionU students in the first cohort who are fresh out of high school.
About 20 percent of students admitted already hold at least a bachelor’s degree. Of the 80 percent who do not, 75 percent have some type of college credit, and hail from reputable universities including Loyola Marymount, Pepperdine, University of South Carolina, University of Oklahoma and Penn State.
Braun says those stats are no accident, and that students who have just graduated high school or college are “not the core target.” But the core target seems to still be in question. Braun says the startup intentionally looked for students with a range of education levels to find out what kinds of students the model can best serve, especially as it thinks about expanding into new locations and fields of study.
“In this first cohort we are identifying really strong individuals from diverse backgrounds, and learning as much as possible about who we can serve at scale,” says Braun.
Uncharted territories
Currently, MissionU’s program offers its 30-student cohort a single major in Data Analytics + Business Intelligence. The one-year program involves a combination of online classes and bi-weekly in-person sessions with peers and outside organization partners.
When the time does come to build out beyond the school’s Union Square headquarters, Braun says the company will be looking at other tech hubs around the country, and where they are seeing the most demand from student applicants. Braun lists Chicago, Austin, New York or Detroit as possible candidates.
“Right now we are just focused on data analytics and we are taking into consideration demands for those types of roles in different cities. When it comes to adding subsequent majors in 2019,” he tells EdSurge, “we will do a six to 12-month analysis to make that decision about where to have positive impact on a local economy.”
