The Strategic Move Behind Campus Raising Venture Capital

When Tade Oyerinde embarked on the journey to secure funding for Campus, his fully accredited online community college, he encountered significant challenges.

Venture capitalists have historically supported for-profit education companies like Coursera and Udacity, but a traditional two-year college presented a different case.

Additionally, Oyerinde was seeking funds during a period when higher education was grappling with declining enrollments and rising tuition costs.

In a recent episode of TechCrunch’s Found podcast, Oyerinde explained why, despite the hurdles, turning to venture capital made strategic sense. Campus operates using CampusWire, an online learning software Oyerinde developed prior to launching the college, making it a lean, software-enabled venture.

He believed that although Campus might not fit the typical mold of a software or edtech startup, its mission to disrupt a legacy industry aligned well with venture capitalists’ interests.

“It was a high-risk, high-reward, massive problem,” Oyerinde stated. “Solving it presents a huge opportunity to strengthen the country. Capturing even a small portion of the market could lead to building a significant company. So, seeking venture capital was logical.”

However, the path wasn’t straightforward. Initially, Oyerinde’s approach involved pitching to as many investors as possible to persuade them to invest in his vision.

He later realized that targeting investors with an interest or experience in the community college space made fundraising more manageable.

Among Campus’s early investors were OpenAI founder Sam Altman and Discord founder Jason Citron. Their understanding of the need for innovation in the community college space was influenced by their own experiences at community colleges.

Oyerinde’s connection with Citron was facilitated by Charles Hudson of Precursor Ventures. Citron’s involvement in Campus’s seed round eventually led to an introduction to Altman. Reflecting on this connection, Oyerinde remarked on the timing, noting that it would likely be harder to secure a meeting with Altman post-ChatGPT.

Oyerinde also emphasized that while technology continues to evolve rapidly, community colleges often lag, failing to equip students with the necessary skills to keep pace. Campus’s integration with Silicon Valley startups allows it to adapt its curriculum swiftly to meet current trends, a flexibility traditional community colleges often lack.

“Traditional community colleges are unlikely to adapt quickly enough to the changing landscape,” Oyerinde observed. “There’s a need for a highly adaptive, thoughtful, tech-enabled experience that’s more efficient, accessible, and successful in helping students complete their education. This vision excited our investors.”

To date, Campus has raised over $55 million in venture funding. This includes a $29 million Series A round led by Altman and Citron in May 2023 and a $23 million Series A extension round led by Founders Fund in April.

Oyerinde humorously noted that even Peter Thiel, known for his anti-college stance, recognized the potential in Campus.

These funding milestones are particularly noteworthy given the current state of the edtech sector, which has seen a decline in venture capital interest since its pandemic boom.

According to Crunchbase data, over $38 billion was invested in edtech startups globally in 2020 and 2021, but the momentum did not last. By mid-2024, edtech startups had raised just over a billion dollars, suggesting a significant downturn in funding for the sector.

Despite these trends, Oyerinde remains optimistic. While the initial fundraising was challenging, the process has become smoother, and the startup now attracts inbound interest. Oyerinde attributes this shift to Campus’s innovative approach in a legacy industry, the kind of disruption that resonates with venture capitalists.

“We aim to fundamentally change how people learn in America, and eventually, globally,” Oyerinde said. “Silicon Valley remains the go-to place for funding ambitious projects, and that’s precisely what Campus represents.”

In summary, Campus’s journey to securing venture capital highlights the strategic alignment between its innovative approach to education and the interests of forward-thinking investors.

As the platform continues to grow, it aims to revolutionize community college education and adapt swiftly to the evolving technological landscape.