Career Karma lands $40M to evolve into an edtech employee benefit

Career karma raised its first million off of a pitch that was very similar to the one you'll find in a coding boot camp: a navigation tool for aspiring students and working professionals. Career karma helps students find the best programs for their price point and career goals

The startup, founded in 2018, is growing its ambition to serve more than the bogged down student: over the past few months, Career Karma has seeded partnerships with employers, making it the latest consumer-focused ed. Harris says that his vision is that Career Karma will match employees and contractors to job training programs in the marketplace it has built over the past few years.

Employers are the next test of consumer edtech.

Career Karma raised a Series B at an undisclosed valuation to execute on this stage of the business. The round was led by Top Tier Capital Partners. Existing investors in the round included Softbank, Kapor Capital, and 4S Bay Partners.

Harris said that stage one was the number one career advice service for the internet, stage two was the world's largest community of career transitioners, and phase three is to become the world's largest staffing firm.

Career Karma is similar to Handshake and Guild Education in that it is playing the middleman. Career Karma will be able to get students employer-paid tuition and then re-skill them into more advanced job skills as an employee benefit.

Career Karma has been in business since it was launched and will use employers as a zero-cost acquisition channel.

Harris said that they were able to identify the job training programs that they were interested in, the skills they had, and the job that they wanted. We are going to have a really powerful database inside.

Career Karma needs a refresh of its business model. When a student is placed in a program, Career Karma charges a fee to the school. The fee was usually 10% of the student's tuition, which could range from $10,000 to $50,000. Career Karma only makes money when it successfully places a student inside a boot camp, so it could pressure the platform to focus more on pace of placement than personalization of placement. The enterprise business will not bring the same pressures since it will be built to serve career services.

Harris said the company is hiring people to help figure out the best new pricing strategy. Codecademy raised the same amount in a Series D round last year to sell its services to the enterprise. A few weeks ago, the same company sold to Skillsoft.