KickUp: Why We Invested

By Elizabeth Coston McCluskey

Schools spend 80% of their budgets on staffing and billions of dollars on professional development for teachers, who spend up to 70 hours per year on those development activities. Despite the significant time and resources dedicated to it, the Gates Foundation finds that large majorities of teachers do not believe that professional development is helping them prepare for the changing nature of their jobs. Of top concern is how to use technology and digital learning tools, how to analyze student data to differentiate instruction, and how to implement the Common Core State Standards and other standards.

Solution

KickUp provides a platform consolidating professional development opportunities, tracking usage and feedback from teachers, and providing infrastructure for teacher coaching and feedback on their classroom practices. The platform enables data collection around professional development activities and effectiveness, and over time will enable districts to correlate professional development activities with improvement in teacher growth and student outcomes.

Why We Invested

We have been interested in professional development for some time, given both the size of the opportunity and the potential for impact. We also see tailwinds from the Every Student Succeeds Act, which requires school and district accountability on professional development spend. KickUp is the most compelling company we’ve seen in the space for a number of reasons. We have been impressed by the company’s early revenue traction and their ability to sell into districts; KickUp currently serves over 100,000 teachers. The team is led by Jeremy Rogoff, a former Teach for America corps member and KIPP teacher, who has experienced the problem firsthand.

Impact

Research from The New Teacher Project concludes that high performing teachers generate 5–6 more months of student learning each year than poor performers. Engaged teachers are more likely to adopt best practice instructional strategies, which should lead to better student performance. KickUp helps engage teachers in their professional development, and enables district-wide adoption of research-backed instructional strategies. While it’s still early days, KickUp has shown increases in teacher engagement of up to 70% in some districts. And schools that work with KickUp show a 10x increase in project-based learning instruction.

Climb Credit: Why We Invested

By Elizabeth Coston McCluskey and Sarah McGraw

Robert F. Smith’s recent pledge to pay off the student debt of 2019 graduates from Morehouse College renewed the conversation about the burden of student loan debt. According to the Federal Reserve, over half of young adults who went to college in the U.S. in 2018 took out student loans and will graduate with an average debt balance of $29,800. They join the more than 44 million borrowers who collectively owe an astounding $1.5 trillion in student loans — more than two and a half times what American students owed a decade earlier.

As a result, an entire generation of student borrowers are struggling to make ends meet — and only half say that the lifetime financial benefits of their degree outweigh the cost. Lifetime earning power varies significantly by higher education institution and even by degree program. Alternative pathways, such as Associate’s degrees and certificate programs, often offer a better return on investment — but it is difficult for students to assess the quality of and access financing for programs that do not qualify for Title IV funding (federal loans and grants).

Solution

Enter Climb Credit, a financial technology start-up that offers an alternative approach to financing affordable and compelling professional training programs. This can include anything from getting a commercial truck driving license or a crane operator certification to an Associates degree in nursing from a technical college or a certificate in web development. Founded in 2014, Climb finances alternative education costs for students at hundreds of schools across the country that it has pre-qualified based on a track record of meaningfully improving graduates’ earning potential. Prior to onboarding a school onto its platform, Climb evaluates its ROI potential by analyzing graduation rates, job placement rates, and the increase in pre- vs. post-program salaries, compared to the total cost of education (including loans and lost wages while in school). By vetting schools for quality as well as their ability to deliver results and provide affordable financing for students, Climb Credit enables students to continue their education and transition into better paying jobs.

Why We Invested

Traditional lenders tend to focus on loans for university degrees, rather than professional training, creating a significant gap in the marketplace. Climb Credit not only targets this underserved market, it offers affordable financing to students — targeting a much wider range of credit profiles — because it believes in the wage-increasing potential of the programs it finances. In January, Climb secured $50 million in lending capital from Goldman Sachs Urban Investment Group, further expanding its ability to meet student demand. As it grows, Climb will continue to drive meaningful economic empowerment for its students by helping them identify, evaluate, and finance programs that increase their earning potential.

Climb Credit’s rapid growth has been driven by a talented and dedicated team, led by CEO Angela Galardi Ceresnie. Angela is an impressive leader with a strong grasp of the business, deep industry experience, and a commitment to advancing economic outcomes for underserved students. Prior to Climb, Angela co-founded and served as COO/CFO of Orchard — an investment platform for peer-to-peer and online direct lending that was eventually acquired by Kabbage. Before her time at Orchard, Angela spent nine years running credit risk analytics teams at American Express and Citibank.

Impact

To date, Climb has originated over $100 million worth of loans to over 10,000 students across a variety of programs, including software development, UI/UX design, robotics, welding, nursing, and trucking. The typical loan size is approximately $10,000 with an interest rate of between 8.5 and 9%. On average, Climb’s programs offer a job placement rate of 80% and graduates see a median salary increase of 67%. As CEO Angela Galardi Ceresnie puts it, “By aligning school motivations with student career and salary goals, we open the door for thousands of people who want to change their lives through education.”

Press Highlight

Climb Credit Announces $50 Million in Funding From Goldman Sachs Urban Investment Group

MyVillage: Why We Invested

By Elizabeth Coston McCluskey and Sam Abbott

Working families face a number of obstacles when seeking child care, with one of the biggest barriers being supply of high-quality providers. According to the Center for American Progress, 42% of children under age 5 in the US live in child care “deserts” — places lacking adequate access to quality child care options. Due to limited availability, families can face waitlists longer than a year to place their child with a high-quality provider. Affordability is also a major factor, as the cost of child care has increased over 70% since 1985. These challenges have led to over 50% of American parents saying they are unsatisfied with their child’s current care.

Solution

MyVillage creates a community of quality home-based child care businesses benefitting both providers and families. The company is the only one of its kind with a solution proven to work across the country — even in rural, Western states. MyVillage makes it easier for providers to establish and operate high-quality child care businesses by offering access to a suite of resources: a platform to connect with local mentors who can help navigate taxes and regulations, a curated teaching curriculum, business software tools, marketing support, and professional development opportunities. Using MyVillage’s platform, families can search for child care options based on price, location, and program type. They can communicate with and pay providers on the platform, and feel assured that the providers are properly trained, insured, and subject to consistent quality standards.

Why We Invested

In addition to the compelling market opportunity, we are excited to be partnering with MyVillage because of the strength of their team, their early momentum, and their potential for impact.

MyVillage’s team has a proven commitment to making a positive social impact. Erica Mackey, co-founder and CEO, has a track record of scaling impactful solutions to challenging social problems. Before MyVillage, Erica co-founded and was the COO of Off Grid Electric — a renewable energy startup based in Tanzania. Elizabeth Szymanski, co-founder and CFO, was previously the CFO for TENA, an innovative Tanzanian recycling company.

MyVillage’s model has resonated with both existing and new in-home child care providers, and has enabled them to establish a foothold in Montana and Colorado. To date they have recruited 25 providers and have 90 children in care.

The model has the potential to reach underserved communities in both rural and urban settings, giving all children the opportunity to receive high-quality care. While access is a problem across the US, rural and Hispanic communities face a disproportionately high shortage of supply, and affordability is often a challenge for high quality care.

Impact

MyVillage seeks to increase the number of children under five receiving quality child care, to improve the accessibility and affordability of quality child care, and to provide economic empowerment for in-home child care providers. Quality early childhood education is crucial for brain development and prepares children for kindergarten. Roughly half of all low-income 5-year-olds in the US are not ready for kindergarten, putting them at a disadvantage from the very start of their formal education. MyVillage will equip more children to succeed as they enter school.

The company also empowers in-home child care providers to earn up to double their current wage, which averages $11.50 per hour, while monetizing their homes through a meaningful career that supports work-life balance. Through MyVillage, providers can also take advantage of professional development opportunities.

PadSplit: Why We Invested

By Elizabeth Coston McCluskey and Sarah McGraw

As more and more people migrate towards urban areas in search of education and economic opportunities, cities and suburbs across America are experiencing a housing crisis. Complicating matters, new housing production has not kept up with demand. Taken together, this imbalance has led to a rapid rise in home prices that has displaced lower income families and workers.

By affordable housing standards, households are considered cost-burdened when they spend more than 30% of their gross income on housing expenses, regardless of income level. Today, 48% of American workers earn less than $30,000 per year. This would leave almost half of American workers with just $750 per month for housing — an impossibility in many U.S. cities. With limited options, too many Americans are faced with an impossible choice — overspend on housing, thus threatening financial security, or move away from city centers, increasing transportation costs and time strains.

Solution

PadSplit is helping address this market inefficiency by expanding the existing housing supply, without requiring government subsidies. PadSplit is a digital housing marketplace that allows private landlords to convert single-family homes into affordable, co-living residences. These residences are fully furnished, renovated up to specific standards, and include private bedrooms alongside a shared kitchen and common space.

Individuals seeking housing are matched with options closest to their place of employment and become members of PadSplit. Once a resident moves in, their membership is paid week-to-week through the platform to match paycheck cycles, and includes all utilities, on-site laundry, parking and internet access. Average costs for PadSplit residences hover around $550 per month and no long-term commitment is required. PadSplit is also launching a savings platform for members.

Why We Invested

PadSplit offers a secure and affordable solution for a large, yet underserved, segment of working-class adults who face severe cost burdens when seeking suitable housing. The market is complex, however the team — led by Founder and CEO Atticus LeBlanc — has deep experience across real estate and affordable housing, as well as a thoughtful approach to navigating the legal and regulatory environment. They believe in building partnerships with all stakeholders — including members, property owners, city governments and NGOs — to ensure compliance with local standards and Fair Housing requirements. This has earned them support from Enterprise Community Partners and Urban Land Institute, among others, as well as generated excitement about the model’s potential across the sector.

Impact

By providing affordable housing solutions, PadSplit aims to radically improve the financial lives of working-class Americans while enabling them to live within reasonable commuting distance of their place of employment. To date, the company has secured and placed over 200 individuals, helping them save an average of $460/month between housing and transportation costs. Consider the case of Tiffany Ellis, who moved to Atlanta in the summer of 2017 looking to start over after a series of personal setbacks. After securing a job as an overnight security guard, as well as a PadSplit unit, Tiffany was able to save enough each month to purchase a car and move into her own apartment within 6 months.

By expanding the market, matching individuals with appropriate homes, and facilitating weekly payments to match income flows, PadSplit is enabling more affordable, convenient living for a critical segment of working adults.

Press Highlight

“This cohousing startup wants to help the working class”