Indianapolis-based tech apprenticeship academy Kenzie Academy announced today that it has raised $4.2 million in seed funding. The funding was led by existing investor, edtech VC firm ReThink Ventures. Butler University, also located in Indianapolis, joined the round.
Kenzie Academy cofounder and CEO Chok Ooi discussed the new round of funding in a phone interview with VentureBeat, as well as what kind of interest Kenzie Academy has seen since launching its first cohort in January. Kenzie Academy plans on using the seed funding to develop remote hybrid courses — currently, all of Kenzie Academy’s students live in the Indianapolis area — and to launch digital marketing and UX courses in September. Kenzie Academy had previously raised $1.6 million in November.
Currently, Kenzie Academy offers a two-year software engineering program. The first year of the program, which costs $24,000 in tuition, consists of in-person, project-based class work. The second year, students do paid work for companies through Kenzie Academy’s consulting studio. Students can either pay for their first year of tuition upfront, through a monthly payment plan, or through an income-share agreement.
While apprenticeship and income-share agreements are nothing new, the rising cost of higher education means more startups and incumbent institutions are considering whether to offer them to students. However, many of these programs are still new and have not yet been rolled out at scale. General Assembly recently piloted an income-share agreement with 13 students, while App Academy, a coding school with an income-share agreement that has been around since 2012, has graduated more than 2,000 students in New York City and San Francisco.
Ooi told VentureBeat that Kenzie Academy decided on Indianapolis for its first program because it anticipates that Bay Area companies will start to look toward the middle of the U.S. for talent, citing Amazon’s search for its second headquarters.
“There are many other companies like [Amazon] that are looking to set up a development R&D center beyond the coasts, and we feel like middle America is a very compelling locale,” Ooi said.
So far, Kenzie Academy has launched three cohorts, each of which consists of 16 to 18 students. Ooi said that participants’ ages range from 19 to 55, with the average age being 27. Ooi said that one type of student Kenzie Academy is particularly keen on attracting more of in 2019 is high school students or recent high school grads. The program has already accepted a few high school students.
“When they heard about Kenzie Academy, they were very excited about the prospect of doing a shorter two-year-program, and to go and be able to get a job without accumulating a lot of student loan debt,” Ooi told VentureBeat.
In addition to the investment from Butler University, Kenzie Academy also announced earlier this summer that it was partnering with the university so that all Kenzie students who graduate will also receive a certificate from Butler — as Ooi acknowledged that many employers still look for hires with education from a four-year institution. In the future, Ooi said that Kenzie Academy hopes to work with Butler to start providing Kenzie computer science classes to Indiana high school students, that they can either transfer as credits to Butler University or Kenzie Academy once they graduate, or to provide Butler students with the option of participating in Kenzie Academy and having that course count as their minor.
“We still have to build a long-term sustainable pipeline of talent into tech, so we essentially have to capture the talent earlier on,” Ooi told VentureBeat.