MissionU wants to offer college-level students the opportunity to get a debt-free education and announced today that it has secured $8.5 million to do just that. FirstMark Capital led the round, with participation from existing investors First Round Capital, University Ventures, Box Group, Rethink Education, and Learn Capital. New investors Omidyar Network and Kleiner Perkins’ John Doerr also joined.
CEO Adam Braun and chief product officer Mike Adams cofounded MissionU in 2016 after learning that student debt is the only debt in the U.S. that can’t be discharged through bankruptcy. “Inspiration struck when I witnessed my wife’s struggle to pay back more than $100,000 in student loans,” wrote Braun, in an email to VentureBeat.
The duo set up a debt-free system based on giving students the right set of skills to match today’s workforce needs. The one-year program is a combination of online (80 percent) and in-person (20 percent) classes that focus on teaching hard, soft, and technical skills.
No upfront tuition is required — graduates pay once they are making $50,000 or more per year. Only then do they contribute 15 percent of their income back to MissionU for three years. “This model guarantees that students won’t be left with crushing debt and avoids huge interest rates on student loans,” added Braun.
To protect extremely high earners, MissionU caps the total payments at $45,000, which would only be reached by those who make $100,000 or more for three years after leaving the program. And if a student doesn’t make at least $50,000 within seven years of graduating, their contract ends and they pay $0 for their year-long experience.
The first cohort counts about 30 students, who started taking classes this month. They were selected from a batch of nearly 5,000 applications, according to MissionU. For now, the program offers one major, Data Analytics and Business Intelligence, with advisors and instructors stemming from Harvard, Stanford, Bain & Company, Hack Reactor, and more. Students have biweekly in-person meetings at companies or at collaborative spaces in San Francisco.
MissionU partners with a number of companies — including Spotify, Lyft, Uber, and Casper — that have early access to hiring its graduates. The startup monetizes exclusively through tuition but plans on adding several revenue streams in the coming years, according to Braun.
Based in San Francisco, MissionU will use the fresh injection of capital to increase the number of students per cohort, add start dates throughout the year (January, May, and September), explore new majors, and expand to new cities beyond San Francisco.
The startup has raised a total of $11.5 million to date and currently has about 30 employees.