Although many students in the United States enter community colleges intending to transfer to four-year universities, only 16% of those students receive bachelor’s degrees within six years. But Campus, an online alternative to traditional community colleges, has an approach that aims to change that.
Many adjunct professors at the nation’s top universities, including UCLA, Princeton and NYU, earn such low salaries that a quarter of them qualify for some form of government assistance. At the same time, the cost of education has been skyrocketing.
“I got obsessed with the idea of giving everybody access to these amazing professors” at a price that most students can afford, said Campus founder Tade Oyerinde.
Investors seem to be obsessed, too: The company announced Tuesday that it raised a $23 million Series A extension round, led by Founders Fund, with 8VC participating.
Campus has hired adjunct professors who are also currently teaching at colleges like Vanderbilt, Princeton and NYU, paying them $8,000 a course, which is much higher than the national average. The cost of attending Campus is $7,200 a year; it’s fully covered for students who qualify for federal Pell Grants, allowing about 40% of the college’s students to study for free.
All students are provided with a laptop, Wi-Fi and access to tutors. They’re paired with coaches who are tasked with making sure that everyone stays on track. Enrollment has been growing fast, according to Oyerinde. Students want to be a part of something modern and new, he said, and they think of Campus as a trampoline into a four-year program.
Last year, Campus raised a $29 million Series A, led by Sam Altman and Discord founder Jason Citron. Solo VC Lachy Groom, Bloomberg Beta, Founders Fund, Reach Capital and Precursor Venture also participated. Earlier this year, the company caught Shaquille O’Neal’s eye, and the basketball star topped up that round.
Most of the capital from Campus’s first Series A installment went toward purchasing a physical college in Sacramento. While most students study online and are based throughout the country, the community college now offers in-person courses in phlebotomy, medical assistance and cosmetology.
Tech-like margins
The capital from Founders Fund-led Series A extension, which Campus is announcing on Tuesday, will be used to fuel growth.
The firm boosted its stake in Campus — Founders Fund’s first edtech bet — due to the company’s scalable tech platform, said partner Trae Stephens.
“I think the structure is kind of a hack,” he said. “You can get the cost low enough that there are no out-of-pocket costs. That’s very hard to do when there are overhead costs attached.”
Perhaps this is why VCs have historically avoided backing traditional academic institutions.
For now, each class has on average 75 students and three teacher assistants. While Oyerinde didn’t say whether professor to student ratios will increase as enrollment numbers grow, he emphasized that Campus’ margins look like those of a tech business.
The company is very mindful of for-profit colleges’ dark past. In 2019, University of Phoenix, a private university, agreed to pay a $50 million fine and forgive $140 million in student fees, following a five-year investigation by the Federal Trade Commission into the company’s misleading claims about job opportunities available to its students.
“Campus is not going to saddle students with tons of debt. I don’t think this is good for the U.S. economy,” Stephens said. “We’re going to do this in a way that aligns with the goals of the Federal Pell grants.”
Oyerinde says the company is squarely focused on making sure that the cost of education is low (or nothing) and that students graduate.
Campus faces a surprising challenge: finding the coaches. While attracting professors (with a long waitlist) and students is simple, the company needs coaches who encourage students to stick with their education.
“If we need engineers or marketing people. That’s easy,” Oyerinde said. “But there’s not a pool of people who’ve done this particular role of building deep relationships, motivating people consistently for multiple years on end.”