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Khosla & Founders Fund Ramp Up
Meanwhile, BloomTech gets slapped by the CFPB and Mercury makes it personal for founders
Adam Hardej
April 18, 2024
Together with
Khosla and Founders Fund are teaming up to bet big on Ramp. They also sponsored the Amateur division Masters (golf) winner and probably got an ungodly amount of earned media value (pretty sure I’m using that term right). Meanwhile, BloomTech and their Twitter famous CEO Austen Allred got slapped by the CFPB and Mercury launched personal banking for founders. I wrote a bit about the BloomTech thing at the end.
Ramp raises another $150 million co-led by Khosla and Founders Fund at a $7.65B valuation
“The raise is characterized as an extension of Ramp’s Series D, in which the fintech company raised $300 million at a 28% lower valuation of $5.8 billion. The latest capital infusion brings it back closer to the $8.1 billion valuation it had achieved in March of 2022.”
Consumer Financial Protection Bureau fines BloomTech for false claims
“The U.S. Consumer Financial Protection Bureau (CFPB) said in an order on Tuesday that BloomTech, the for-profit coding bootcamp previously known as the Lambda School, deceived students about the cost of loans, made false claims about graduates’ hiring rates and engaged in illegal lending masked as “income sharing” agreements with high fees.”
Plus some extra commentary from me at the bottom.
Startup-focused neobank Mercury launches personal banking, targeting the founder class
“While Mercury has focused its efforts on serving businesses and startups, company leadership says it had long received requests to offer personal banking services—and it’s designed to oblige.”
Hot Links
Sandhill Live Schedule
NEXT WEEK: Things I Wish I Knew About Building Self-Serve Software
Join us live on Thursday, April 25 at 3 pm EST to learn more about the highs and lows of building self-serve software, from tech industry veteran, Russ Heddleston.
More about Russ:
Co-founder and previously CEO of DocSend where he led the acquisition by Dropbox in 2021 for $165m (raised under $15m).
Previously he was co-founder of Pursuit, a social referral company that helped source referral candidates; sold to Meta in 2011, where he then ran Product Management for the Pages product.
Russ also led product and management roles at Microsoft, Trulia (acq by Zillow), and Greystripe (acq by EPSN.)
Previously, received an MBA from Harvard Business School, a master's in Computer Science from Stanford and a bachelor's in Computer Engineering from Stanford.
This event is brought to by Sacra.
ICYMI: How We Sold Clearbit To HubSpot
Earlier this week I got the chance to sit down with Matt Sornson to talk about his journey at Clearbit and their ultimate sale to HubSpot in 2023. It was a great conversation with some notable surprises based off of what a brief look at the timeline might suggest:
The decision by co-founders to step back and bring in an external CEO was more about them being honest about their skillsets and allowing the business to “grow up” than anything else.
When Matt came back as CEO it was because AI had created a existential threat to Clearbit’s business as well as new exciting opportunities. It had nothing to do with preparing the business to be sold.
They were not looking to sell when HubSpot approached them. They were actually as far away from wanting to sell as they had been in a long time.
If you want to check out the full conversation, you can find the recording on Twitter here and on LinkedIn here.
Thank you to everyone who showed up live and to Sacra for helping bring it together.
LAST WEEK: Demo Day Is Back With SeedChecks
Thank you for coming!
In case you missed part of the presentations, you can find the full recording on Twitter here and on Linkedin here.
If you would like to get in touch with the founders that presented last week, you can reach out to them through Linkedin using the links below:
Andrew Nijmeh - Glist
Brianna Guidotti - JoinMe (got app store approval today!)
Wenhao Yang - AuthPay
We use LinkedIn as a way to provide better context to founders about who's reaching out. They will be expecting the outreach.
I'd also encourage you to follow / connect with our awesome panelists:
Eric Jorgenson (Twitter / LinkedIn) is an investor at Rolling Fun. He is also CEO at Scribe Media and author of The Almanack of Naval and Anthology of Balaji.
Christian Keil (Twitter / LinkedIn) is the Chief of Staff at Astranis, where he helped launch their first communications satellite and scale to $1B in sales. In his new show, First Principles, he asks deep tech founders dumb questions until he understands how their tech works from the ground up.
Turner Novak (Twitter / LinkedIn) is an investor at Banana Capital. He makes great memes, writes a newsletter, and hosts a podcast.
Thank you again for your support and we hope to see you at the next one!
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Not an app (overly nostalgic but still relevant)
Letters From The Editor
Misc. (short for miscellaneous)
BloomTech (fka Lambda School) Thoughts
Ugly all around. The TechCrunch article leans negative/against Lambda School in a way that feels rage-click-baity. A quick look at Twitter (Austen Allred’s specifically - the CEO) shows the other side of the story pretty clearly.
I definitely don’t think the CFPB deserves any sort of pat on the back here. The fine doesn’t really mean anything and no actual admittance of wrong-doing happened. They “banned them from lending”, but they don’t do that anymore anyways. Apparently they haven’t even focused on ISAs since 2021. BloomTech just agreed not to argue further and to pay they fine rather than drag it out.
From the looks of it, they marketed their products in a way that painted them in a positive light. That might sound like - you know - normal marketing, but in the case of regulated industries like student lending it’s a very tight rope to walk. Income Share Agreements (ISAs) were always a type of lending. You can tip-toe around what’s technically lending, but in essence you’re getting a service now without paying in exchange for future payments. So - you know - lending.
If anything, the original sin here is for-profit education more generally. Hard to think of an example that isn’t a bit ugly. There are definitely positive outcomes and I think consenting adults should be be allowed to choose which services they pay for (not the government). There are also definitely negative outcomes. This a very common story line in non-profit education (college generally) and everyone is aware of the ongoing student-debt crisis.
Focusing in on graduate debt-loads, I’d bet BloomTech is much better than most accredited non-profit colleges. However, when the negative outcomes come up - non-profits are able to wave the “we don’t make money though” flag and avoid meaningful crackdowns. For-profits like BloomTech don’t have such an easy out despite (I’m guessing here) are probably better debt-load outcomes.
What do you think? |
Talk soon,
Adam
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