Many students in the United States enroll in community colleges with the intention of transferring to a four-year university, but only 16% of those students earn a bachelor's degree within six years. But Campus, an online alternative to traditional community colleges, has an approach aimed at changing that.
Many adjunct professors at the nation's top universities, including UCLA, Princeton University and New York University, earn salaries so low that a quarter of them qualify for some form of government aid. At the same time, education costs are rising.
“We fell in love with the idea of giving everyone access to these amazing professors at a price that most students could afford,” Campus founder Tade Oyerinde said.
Investors seem to be hooked, too. The company announced Tuesday that it has raised $23 million in a Series A extension round led by Founders Fund, with participation from 8VC.
The campus employs adjunct professors, who currently teach at universities such as Vanderbilt University, Princeton University, and New York University, and pays them $8,000 per course, which is much higher than the national average. The cost to attend campus is $7,200 per year. Students eligible for federal Pell Grants are fully compensated, allowing approximately 40% of the university's students to study for free.
All students are provided with access to a laptop, Wi-Fi, and a tutor. They are paired with a coach whose mission is to keep everyone on track. Oyerinde said enrollment numbers are rapidly increasing. Students want to be involved in something modern and new, he said, and he sees the campus as a trampoline to the four-year program.
Last year, Campus raised $29 million in Series A funding led by Sam Altman and Discord founder Jason Citron. Private VCs Lachy Groom, Bloomberg Beta, Founders Fund, Reach Capital, and Precursor Venture also participated. Earlier this year, the company caught the eye of Shaquille O'Neal, and the basketball star topped his round.
Most of the funding from Campus' first Series A installment went toward purchasing a physical university in Sacramento. Although most students study online and are located across the country, the community college now offers in-person courses in phlebotomy, medical assisting, and cosmetology.
technical margin
The funds from the Founders Fund-led Series A extension, which Campus announced Tuesday, will be used to fuel growth.
Partner Trey Stevens said the firm increased its stake in Founders Fund's first edtech investment, Campus, because of its scalable technology platform.
“I think this structure is like a hack,” he says. “You can keep costs low enough that you don't have to pay out of pocket. It's very difficult to do that when you have overhead costs.”
Perhaps this is why VCs have historically avoided supporting traditional academic institutions.
So far, each class has an average of 75 students and three teaching assistants. Oyerinde did not say whether the professor-to-student ratio would increase as enrollment increases, but he emphasized that the campus' profit margins are similar to those of technology companies.
The company is very mindful of the dark past of for-profit colleges. The University of Phoenix, a private university, paid a $50 million fine and $140 million in 2019 following a five-year investigation by the Federal Trade Commission into the company's misleading claims about job opportunities available to students. Agreed to waive $20 student fees.
“Campuses are not going to burden students with large amounts of debt. I don't think this is good for the U.S. economy,” Stevens said. “We intend to do this in a manner consistent with the goals of the federal Pell grant.”
Oyerinde says the company is seriously focused on ensuring education costs are kept low (or zero) and students graduate.
Campuses face an incredible challenge in finding coaches. While it's easy to attract professors (who have long waiting lists) and students, the company needs coaches to encourage students to continue their education.
“If you need an engineer or a marketer. That's easy,” Oyelinde said. “But there aren't many people who have played this particular role of building deep relationships and motivating people consistently over many years.”