Israeli online education startup Masterschool, which operates a number of tech career schools, announced it has raised a $100 million funding round, all in equity and debt-free. The round was led by Group 11, with participation from Target Global, Pitango Ventures, Dynamic Loop Capital, Sir Ronald Cohen, and other investors.
According to Otni Levi, co-founder and co-CEO of Masterschool, the first and foremost problem facing the tech industry is the current shortage of tech professionals.
“The industry needs a lot more technicians than we have right now,” says Levi. “We are trying to bridge this gap by giving everyone the opportunity to build this new professional future.”
The way Masterschool works is by coordinating a network of career planning schools where students pay no tuition until they are hired. All schools are online, distance-taught, and cover a variety of technology-centric fields such as data science, web development, and cybersecurity.
Classes are taught by mentors and industry insiders, often followed by plenty of social media. Prominent professors include analysts Charlotte Chaze (240,000 TikTok subscribers for her data content) and Keith Galli (160,000 subscribers to his data science YouTube channel).
The company operates 30 schools with around 1,000 students and by the end of the year it plans to open another 70 schools, with the total number of students increasing to 4,000. On average, the annual growth of l is 5x. Basic training is 6 to 12 months, depending on the school, with students reimbursing tuition by forfeiting 10% of their salary until tuition is fully refunded. Masterschool also partners with companies that hire its graduates.
“When we partner with companies, it’s the companies that fund the students after they’ve been hired by the company,” says co-founder and co-CEO Michael Shurp. “We only make money when our students make money.”
The company, co-founded by co-CEOs Shurp and Levi (who were in the IDF special forces for 10 years), CTO Eran Glicksman and impact chief Roi Tzikorel was launched in early 2019. It is currently based in Tel Aviv and has over 100 employees in multiple offices around the world.
Dovi Frances, founding partner of Group 11, which led the round, says the seed was so big because Masterschool is fixing a great industry that has failed at every stage.
“The education industry has failed to find the right talent, train it and charge for it,” says Frances. “He found the people who had money, but not the people who didn’t, and he failed to enable them to study, to support them and to place them in the right jobs for them. .”