Goldman Sachs backs an $80M investment in tech service startup Bitwise Industries to train workers in underrepresented communities
Bitwise Industries, a tech service provider that trains workers in underrepresented communities, has raised $80 million in new funding led by existing investors Kapor Center and Motley Fool, with participation from the Growth Equity business within Goldman Sachs Asset Management and Citibank.
The round, which brings the company’s total funding to $180 million, valued the tech hub creator at over $600 million, people familiar with the matter said, from a $200 million valuation in early 2021. Bitwise Industries will use the new cash infusion to drive economic transformation in the cities Bitwise serves through its Salesforce managed services, DocuSign, and Digital Product Development offerings, the company said in a news release.
Founded in 2013 by Irma Olguin Jr and Jake Soberal, the Fresno, California-based Bitwise invests in tech real estate, runs apprentice programs for marginalized communities, and sells managed tech services to government and traditional businesses. Since its launch a decade ago, Bitwise has expanded training hubs into 10 cities across the United States, including Toledo, Ohio, and Bakersfield, California, with plans of growing to Chicago’s South Side this year.
The company said it supported the creation of over 15,000 jobs in just one of its cities and the training of over 10,000 individuals, 80% of whom have received technical employment. Half of its apprentices are female and about 20% are Black.
The 15,000 jobs account for over a quarter of a billion dollars in aggregated wages, mostly going to women and people of color, and the growth of the city’s GDP by over 1% per year, the company said. Bitwise Industries also added that it also renovated over 1M square feet in previously vacant, blighted spaces within underserved downtown areas across the country, creating vibrant spaces for innovation and commerce. “This has supported the skilling of over 10,000 individuals, from underestimated communities who otherwise might not have considered the tech industry as a place for them. Eighty percent of those have gone on to technical employment after completion of the program,” the company said in a statement.
Bitwise co-chief executive officer Soberal said the startup doubled its revenue in 2022. He views the company as a value-added consulting firm similar to Accenture, with abilities to train its own talent pool. The company reportedly generated revenue of $40 million in 2020.
The training program, which is supported by government workforce upskill funding and tech corporate funding, usually takes about 12-18 months to complete. Soberal noted that Bitwise hasn’t seen much impact from the recent layoffs in big tech companies and venture-backed startups.
“Most of our apprentices don’t go to work for Google, Facebook and Amazon… they’re going to work in technical roles at the County Office of Education, at the agribusiness and the manufacturer. There are millions and millions of unfilled jobs across the country in those categories,” Soberal added.
Commenting on the funding, Hillel Moerman, a partner in the Growth Equity business within Goldman Sachs Asset Management, said: “Goldman Sachs believes that Bitwise has shown a strong track record in training and upskilling talent to successfully find placement in the highly competitive technology labor market. Filling the talent gaps is not only pertinent for the sector, but also key to creating economic opportunity for those in underserved communities and we are excited to support Bitwise in its continued growth.”
The investment from Goldman Sachs Asset Management is part of the firm’s One Million Black Women initiative, which seeks to help narrow opportunity gaps facing Black women across key pillars including, Job Creation and Workforce Advancement.
“The Kapor Center, as a lead investor in this round, and Kapor Capital, as a continuing investor, recognize Bitwise’s major accomplishments in closing gaps of participation in the tech ecosystem and transforming the economies of underestimated cities across the nation, now expanding to the South Side of Chicago,” said Bitwise Board member, co-Chair of the Kapor Center, and founding Partner of Kapor Capital, Mitch Kapor.