Israeli Online Education Startup Masterschool Raises A $100 Million Seed Round

Israeli online education startup Masterschool, which operates a number of tech career-training schools announced that it has raised a $100 million seed round, all in equity and containing no debt. The round was led by Group 11, with participation from Target Global, Pitango Ventures, Dynamic Loop Capital, Sir Ronald Cohen, as well as other investors.

According to Otni Levi, cofounder and co-CEO of Masterschool, the first and major problem in the tech industry is the current tech professionals shortage.

“The industry needs many more tech people that we don’t have at the moment,” Levi says. “We try to close this gap by giving everyone a chance to build this new professional future for themselves.”

The way Masterschool operates is by coordinating a network of career planning schools where students pay no tuition until they are hired. All of the schools are online, taught in a remote way, and cover a variety of tech-centric fields such as data science, web development, and cyber security.

The classes are taught by mentors and industry insiders, often with large social media following. More prominent teachers include analysts Charlotte Chaze (240k TikTok followers for her data content) and Keith Galli (160k subscribers to his YouTube data science channel).

The company operates 30 schools with roughly 1000 students, and by the end of the year it plans on opening 70 more schools, with the total number of students growing to 4000. On average the company’s growth YoY is 5x . The core training is 6-12 months, depends on the school, with students paying back the tuition by giving up 10% of their salary until the tuition is fully repaid. Masterschool also partners with companies that hire its graduates.

“When we partner with companies, companies are the ones financing the students after they are hired by the company,” cofounder and co-CEO Michael Shurp says. “We make money only when our students do.”

The company, cofounded by co-CEOs Shurp and Levi (who was in the special forces of the Israeli Army for 10 years), CTO Eran Glicksman, and Chief of Impact Roi Tzikorel was launched at the beginning of 2019. It is currently based in Tel Aviv and counts over 100 employees in multiple offices around the globe.

Dovi Frances, founding partner at Group 11, which led the says the round, says the seed was so big because Masterschool is fixing a large industry that failed across all stages.

“The education industry failed with finding the right talent, training it, and charging for it,” Frances says. “It found the people who had money, but not the ones who didn’t, and it failed at allowing them to study, supporting them and placing them into the right jobs for them.”