A tsunami of staggering student loan debt has burdened millions of Americans over the years. Higher education can be crucial to economic mobility, but for a low-income worker holding a full-time job, the opportunity cost of pursuing further studies may be prohibitively high.
Stanford University graduate Rachel Carlson recognized an opportunity to help working professionals chart their paths back to school. In 2015, she and Brittany Stich co-founded Guild Education, the developer of an education benefits platform that allows corporations to sponsor programs for their employees ranging from short-term certificates to degrees that can take years to complete.
The Denver-based company now commands a $1 billion valuation, following a new venture funding round announced Wednesday. The $157 million deal led by General Catalyst adds Carlson and Stich’s startup to this year’s class of female-led companies to gain unicorn valuations, along with Rent the Runway, Away and Glossier.
Guild collaborates with nonprofit, accredited universities such as the University of Arizona and Purdue University Global to provide higher education options including bachelor’s and master’s degrees, as well as trade diplomas. Companies that use Guild’s platform offer the programs to their employees at a significantly reduced cost.
Carlson, who also serves as CEO, said in an interview that the opportunity benefits employers and workers alike.
“It supports corporate strategic initiatives of employers, which tend to be recruitment, retention and upskilling. And for the employee, it ties to their goals and ambitions around completing a degree, achieving economic opportunity and supporting their family,” Carlson said.
According to Carlson, there are two systemic problems that have led to an increased demand for affordable access to education: rising student debt and Americans’ uncertainty about the future of work.
“CEOs that are adopting education as part of their corporate strategy are uniquely positioned to drive social change,” Carlson said. “And they’re doing it at a time when the government has been less successful in addressing those challenges.”
Student loan debt in the US has more than doubled in the last decade, totaling about $1.5 trillion at the end of March 2019, according to a report published by the Pew Research Center. The rise comes as a growing number of Americans are attending college and the cost of higher education has skyrocketed.
There has been an increased interest in technical skills and specialized knowledge including coding, data analytics and robotics from employers in recent years. However, Carlson highlights that Guild also sees high demand for skilled trades related to plumbing, electrical work and carpentry, as well as fundamental skills related to communication, writing and business that allow workers to move up into mid-level positions and managerial roles.
Guild primarily focuses on employees of Fortune 1000 companies including Walmart, Disney and Chipotle.
Emerson Collective, Iconiq Capital and Lead Edge Capital participated in Guild’s latest funding, among other investors. Ken Chenault, a managing director at General Catalyst and former CEO of American Express, is joining the company’s board. Guild intends to use the funding in part to add academic partners and expand its team.
Featured image via Guild Education
Related read: Udacity and its $1B edtech experiment
Learn more about our editorial standards.
