New investment fund from JFFVentures seeks to punch above its weight, in part by leaning on JFF’s expertise with employers and community colleges. Also, federal money creates a legit stackable credential path for high-demand jobs in Massachusetts, and a call to dream big and look past “college or bust.”
‘Patient Capital’ for Workforce Startups
Big investment returns are rare for startups that offer short-term education and job training to low-income learners. College alternatives often struggle to recruit students and to provide the expensive support necessary to move the needle for students on economic opportunity and social mobility.
A new fund from JFFVentures is seeking to buck those odds with investments aimed solely at workforce programs for low- and middle-income Americans without college degrees. The strategy is to raise $50M in “patient capital” for the largely empty space between philanthropy and investments that seek a market-rate return, says Sabari Raja, managing partner of JFFVentures.
“We’re not in the business of hunting unicorns,” she says. Instead, Raja says the early-stage impact fund will look at a range of company sizes, even those that may only reach annual revenue of $10M-$20M, which still can generate meaningful investment returns. “We are completely satisfied with that.”
The fund is the second foray into investing by JFFVentures. A few years ago, JFFLabs acquired the Employment Technology Fund, which was conceived by four major foundations. In 2022 that fund was rebranded and managed $25Min capital with 46 companies in its portfolio. Yigal Kerszenbaum brought that fund to JFF and is the new fund’s founding managing partner.
Raja says JFFVentures is “operationally independent” from Jobs for the Future, a national nonprofit that has grown substantially in recent years. However, she says the new Fund II is “strategically aligned” to the group’s mission of transforming the U.S. education and workforce systems to achieve equitable economic advancement for all.
Jobs for the Future will have skin in the game—the nonprofit will receive a share of the investment returns and is providing services and guidance to the fund, including feedback from employers and intel on the two-year college sector. The goal is to “plug companies into the work JFF is doing,” says Raja.
Community College Bootcamps: Upright Education is part of the new fund’s portfolio, along with ChargerHelp! and AdeptID, among others. Raja says Upright, a recently formed tech bootcamp company, is a good example of the sort of solution JFFVentures is backing.
The bootcamp provider has partnered with 30 community colleges and regional public universities, most of which are located in urban or rural markets. Its five tracks are in software development, digital marketing, data analytics, tech sales, and UI/UX design.
“Scaling bootcamps is very difficult, if not impossible,” says Benny Boas, Upright’s CEO and a veteran of the bootcamp sector. A key reason for this, he says, is the high cost of attracting students at the national level.
The startup seeks to overcome that challenge by offering its white-labeled, noncredit continuing education programs to cohorts of students across institutions. That allows Upright to “be able to work with colleges of all sizes and in all markets,” Boas says.
Another draw, he says, is that three-quarters of Upright’s students get most or all of their tuition covered by grant funding, including from WIOA and other federal sources, as well as state support. So for most students, after a $100 deposit, their tuition will be $2K-$3K at most.
“Our learners aren’t looking to stack credits,” says Boas. “They’re looking to get reskilling.”
On JFFVentures, Boas says he likes that Raja is a former founder herself. “The pressure is put into the right places,” he says.
Leveraging the JFF Connection: Several investors praised the fund’s leadership and unusual focus. The partnership with Jobs for the Future may help the fund to punch above its weight, they said.
“Founders working to address economic mobility through education and work face a major challenge,” says Taylor McLemore, CEO and partner at Future State. “There is very little early-stage capital that understands the space.”
McLemore also says the fund’s Corporate Innovation Council is an interesting and potential distinctive strength.With 15 or so members who hold senior roles with companies like Citi, Salesforce, Accenture, and Oracle, the council offers startups feedback and a chance to test their products.
The council demonstrates that the fund is listening to employer demand, says McLemore, and that JFFVentures “is intelligently leveraging JFF as a platform to drive unique value to their portfolio companies.”
Workforce education startups operate in a tricky environment, with a volatile job market, the dominance of the four-year degree, and, most importantly, the multitude of barriers low-income learners face in this country. The market is littered with failures. (I’m planning to publish a living document that lists shuttered companies and programs I’ve written about.)
Yet JFFVentures is confident that money can be made by investing in companies that seek to build a more inclusive future of work.
The Kicker: “We actually have something to prove here,” Raja says. “We’re supporting entrepreneurs from underserved backgrounds, who are closer to the problems.”
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Are you screening out half your talent pool? Degree requirements limit the number of skilled workers considered for a role, but sourcing from alternative routes and valuing transferable skills help you build a strong, resilient workforce. Download our playbook for tools and tips to shift to a skills-based talent strategy.
Beyond the Status Quo: Why ‘College or Bust’ Limits Economic Mobility
Our overwhelming focus on the four-year degree as the sole pathway to career success isn’t working, writes Kate Naranjo. Why not dream big to create a system that works for everyone?
Backing Stackable Credentials
A new higher ed consortium in Massachusetts is tapping federal money to create microcredentials and the rare, legit stackable pathway for students in a high-demand field—public health informatics, in this case.
The funding is part of $75M in federal pandemic relief money the Office of the National Coordinator for Health Information Technology is using for workforce development. The program is seeking to help the nation avoid blind spots in the next pandemic and to glean more insights from health data. It also aims to increase opportunities for underrepresented people in the public health IT workforce.
As a result, federal money is going to 10 HBCUs and other minority-serving institutions in the four-year university sector, which are tasked with forming groups of colleges to collectively train more than 5K students over four years.
A consortium led by the University of Massachusetts at Lowell received roughly $3.2M through the program. Like the other collaboratives, the group’s approach is tailored to regional needs. The university partnered with Middlesex Community College, Northern Essex Community College, and Nashua Community College to create the credential transfer paths. The consortium also features community health centers, where students can work as interns.
Middlesex this semester began offering a free microcredential to serve as career on-ramp for students. The three-course, nine-credit credentials can be used to land an entry-level position, says Kori Preble Boeckeler, the college’s program coordinator for public health informatics and technology.
“We’ve had a tremendous response,” she says, and the courses filled up quickly.
Students who earn the microcredential can apply those nine credits to an associate degree from Middlesex. If they are over the age of 25, a community college degree is tuition-free in Massachusetts. And when the college’s public health informatics graduates transfer to UMass Lowell, all those credits roll into a four-year degree. They can also pursue graduate credentials at the university. Boeckeler says the hope is that students can continue with their education while working.
The consortium has been working closely with state and local agencies across greater Lowell, as well as with hospitals and other employers, says Dan Berlowitz, who chairs UMass Lowell’s department of public health.
“It’s an exceptionally strong job market” for graduates with skills in public health informatics, he says. Prospective students include many workers in the field who need extra training.
The goal is to “create a pathway by which students can be trained at all levels in the Merrimack Valley,” says Berlowitz. But these are tough times for colleges to start new programs, he says, let alone to try to create new stackable pathways across institutions.
“This would not have happened without federal support,” Berlowitz says.
The National Science Foundation is tapping $200M from a CHIPS Act workforce and education fund to train at least 100K new semiconductor researchers, workers, and educators during the next five years. Sethuraman Panchanathan, the NSF’s director, recently described that work to a U.S. Senate committee, including efforts to build semiconductor education capacity among minority-serving colleges and two-year institutions.
More than half of the 115K jobs the semiconductor industry is predicted to add by 2030 may go unfilled due to the small number of college students who complete STEM degrees, Taylor Nicole Rogers reports for the Financial Times, citing a recent industry report. Rogers describes efforts by semiconductor companies to train workers, including a new workforce center in Oregon from Analog Devices that features eight-week courses.
The “hidden college” of noncredit workforce education programs is becoming more visible, with the arrival of new research and supportive policies and funding from state governments. Yet much remains to be learned about this sector’s role, its accessibility and transparency, and its value to students and employers, concludes a series of reports from the Education and Employment Research Center at Rutgers University.
Apprenticeships and Prison
A pre-apprenticeship program in Washington State introduces incarcerated women to careers in the trades, Charlotte West reports in her newsletter, College Inside. More than 250 women have completed the 16-week program at the Washington Corrections Center. One graduate told West that hands-on training through apprenticeships might do a better job than academic programs at preparing people to return to society.
InnovateUS, a nonprofit that offers free and self-paced online courses to public sector workers, says it will use $2M in funding from Google.org and access to Google Career Certificates to offer no-cost training to 50K state employees across 15 states during the next three years. Google.org also will provide pro bono support for the learning platform. The program’s goal is to award 2K certificates at no cost.
The ManpowerGroup and InnoEnergy’s Skill Institute have partnered on a goal of training 800K workers in the European Union for EV battery–related jobs by the end of 2025. The institute will offer accelerated virtual and in-person training for 70 in-demand roles, including battery technicians, EV charger maintenance operators, and production engineers.
Year Up announced that Ellen McClain will be its next CEO. Gerald Chertavian, the nonprofit workforce development organization’s founder and CEO, will become a senior adviser and remain on Year Up’s board. McClain is Year Up’s president and previously served as the group’s COO and CFO.
Per Scholas has received $20M from MacKenzie Scott, the largest unrestricted gift in the nonprofit tech training provider’s history. Scott also gave $8M in unrestricted support to the National Fund for Workforce Solutions.