Kenzie Academy Snags $4.2M, Expands Tech Training in Middle America

As the cost of a college education creeps higher and the student debt crisis grows more pressing, there are lots of people brainstorming and developing educational programs that offer an alternative to college.

This is especially true in the tech sector, where numerous code schools and bootcamps have popped up in an effort to teach young people the skills they’ll need to land good jobs, with or without a university education. The idea is to save time and money by focusing on specific, relevant curricula that are often developed with industry input.

San Francisco-based Kenzie Academy is one such effort. In January, Kenzie launched its first apprenticeship program outside the Bay Area, in Indianapolis. This week, the startup announced it has raised a $4.2 million seed round led by ReThink Education, with participation from LearnStart, Gratitude Railroad, Kelly Services’ Innovation Fund, and Butler University. Matt Greenfield, managing partner at ReThink Education, will also join the Kenzie Academy board.

“We exist to address the skills gap, with a strong focus on Middle America,” explains Chok Leang Ooi, co-founder and CEO of Kenzie Academy. He adds that the 2016 presidential election revealed that “people are suffering and losing hope in Middle America. We have a number of peers [in the industry], but they are mostly hyperfocused on places like New York and San Francisco. We’re targeting untapped talent—people in underserved communities, or those looking for a career change who can’t afford a four-year college. We feel we can prepare them better than a three-month bootcamp program.”

Not only does Kenzie want to increase the tech skills of people in the Midwest and Southern regions, it also wants to make those areas more attractive to native tech companies looking to grow, as well as coastal companies that want to open a second headquarters. “There are a lot of tech startups in Middle America, and we want to make sure they have the talent to scale,” Ooi adds. As a graduate of Indiana University-Purdue University Indianapolis, he had connections in the local tech community, which made the Circle City an ideal launchpad.

Kenzie Academy’s model combines a year of hands-on learning with a year of paid work in Kenzie Studio, the company’s tech consulting subsidiary, Ooi says. The current curriculum covers software engineering, but will soon expand to include digital marketing and user experience courses taught by former Google and LinkedIn employees. At Kenzie Studio, which provides “cost-effective talent solutions” for tech companies, students fresh off a year at the academy work with senior programmers to learn on the job.

“Lots of people have to start with a low-paying internship, so we decided to take what people do anyway and provide a paid apprenticeship in year two,” Ooi says. “It’s just like a plumber who learns from someone who has been doing it for 20 years—we’re taking what has worked in other industries and applying it to tech.”

Tuition at Kenzie costs $24,000 per year, but Ooi says employers generally pay for the second year, plus students earn an apprenticeship wage. There is also an income-sharing program in which students pay 17.5 percent of their income back to Kenzie for up to four years after graduation in lieu of paying for the whole first year upfront. (If an income-sharing student completes the program and earns a salary that is less than $40,000, Ooi says the academy “absorbs the loss.”) Ooi says he wants students to have skin in the game, so Kenzie requires all of them to pay at least $1,000 for the first year even if they’re in the income-sharing program.

Ooi’s ultimate goal is to perfect the Kenzie model in Indy, and then expand to other emerging tech hubs such as Kansas City and Detroit. Kenzie also plans to launch an online program that includes access to live coaching for those living in more rural parts of Middle America. Thanks to a partnership with Butler University, all Kenzie program graduates get a certificate from the college; in the future, Ooi would like to see that partnership grow into a joint program which offers Kenzie’s curriculum as a minor to Butler students.

“If we do it right, it will make America more competitive in terms of tech talent,” Ooi says. “There are many other companies besides Amazon looking for [a location for a second headquarters]. We can provide the talent pool to make Middle America a more attractive place to do business.”

Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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