The first investment in a fresh new fund is always an exciting and memorable one. It sets the tone for how we will execute the next investments: analysing a business, engaging the founders and their team, negotiating terms and planning for a relationship going forward post-investment. We could not have asked for a more fitting company than CodeOp as Ship2B Ventures´ BSocial Impact Fund inaugural investment.
We learned of CodeOp through textbook VC-networking: a former work colleague introduced me to an entrepreneur based in Barcelona who also invests in interesting companies on the side. Over lunch, he told me of Katrina Walker and her vision to solve the structural gender gap in tech teams. As a US-born coder, she experienced the male-dominated office culture in various tech companies and eventually decided to do something about it. She founded the company in 2018 in Barcelona and started offering an in-person full-stack coding program for women, trans and gender non-conforming individuals that wanted to transition into tech. In 2020, Covid pushed the company to go online, boosting students and revenues. Katrina had raised money in two previous rounds attracting top business angel investors. Early 2021, Katrina was looking to close a funding round to expand course portfolio and geographical coverage.
As we discussed, my mind was checking boxes to assess a potential interest: investment core area? Check. Geographic focus? Check. Proven business model? Check. Ticket size and stage? Check. Respected entrepreneur with capacity to attract talent & investors? Check… By the end of our talk, I knew we wanted to know more about CodeOp and asked for a warm introduction.
What is the challenge at hand?
As an impact-driven investor, Ship2B’s first order of business with startups is to focus on the social or environmental problem they are trying to solve. We analyze the causes, effects and create a theory of change for each startup. Here is what we learned about the tech gender gap.
Despite decades of progress towards workplace equality, women remain chronically underrepresented in tech worldwide, and even more across minority groups such as migrants, women of color, single parents and the Transgender/Gender Non-Conforming (TGNC) community. According to the OECD, amongst member states roughly 30% of the tech labor force is women and this number drops further when considering sub-segments in tech: for example, last year only 11% of software developers worldwide were women.
There are many reasons researchers have listed as precursors to women not entering tech or leaving it prematurely. One of the main causes for gender disparity is that young girls have not been socially encouraged and structurally supported to pursue STEM fields. A study by OECD found that girls still lack the confidence to pursue high-paid careers in science and technology, despite their school results being as good as – or better than – those achieved by boys.
Another cause can be attributed to retention issues in the ICT-field. The continued marginalization of women in tech perpetuates harmful stereotypes and stigmas that women are not capable of making technical contributions. Women are 22% more likely than men to experience imposter syndrome at work, more women experience feeling out of place or under-qualified compared to co-workers, so it directly erodes women’s confidence to advance within it. Research conducted by the European Parliament’s Committee on Women’s Rights and Gender Equality found that women under 30 with a degree in ICT make up 20% of the ICT sector. By the time women reach 45 that number decreases to 9%, a pattern that is decoupled from that of their male colleagues.
Source: Resetting Tech Culture, estudio de Accenture y Girls who Code
How does CodeOp tackle the tech gender gap?
To deal with the underrepresentation of women and TGNC minorities in tech, CodeOp focuses on tackling the following effects:
- Economic potential: Research supports that diverse and inclusive engineering teams ultimately lead to greater creativity, productivity and profitability for companies. The EU commission found that if more women were to enter the digital jobs market, it could create an annual €16 billion GDP boost for the European economy. CodeOp is promoting job placement for women and the TGNC community in the tech industry as well as upskilling them in their technical roles.
- Socio-cultural: When women’s opinions are not allowed a voice or space, rarefied environments that facilitate structural inequalities such as unequal pay are perpetuated. For computing fields, women earn 87% of what men earn – even worse for Black women (62%). Furthermore, 75% of men believe their employer offers equal pay while only 42% of women say the same. CodeOp aims to improve confidence in women and achieve a higher salary as well as increase responsibilities in their tech fields. Lack of role models and professional development opportunities inhibit their ability to pursue opportunities and alienate them from the very tools they rely on every day, bolstering technology in our society that’s based on a reflection of its makers’ perspectives, prejudices, and biases. In the US, only 11% of senior leadership positions in tech were held by women. CodeOp reskills women to advance in their technical careers to work in leadership or managerial roles. It also supports the transition from bootcamp to tech roles by vetting and supporting recruiters looking to expand diversity and foster inclusive environments.
- Automation and the future of work: Spain and other European countries will automate around 23% of their workable hours by 2030. A new McKinsey Global Institute (MGI) report, The future of women at work: Transitions in the age of automation states that “between 40 million and 160 million women globally may need to transition between occupations by 2030, often into higher-skilled roles”. CodeOp is promoting this transition and upskilling in tech.
CodeOp’s solution embodies seven primary points of action to fulfil its mission, based in the research findings of McKinsey & Pivotal Ventures “Rebooting the Rainbow”: offer diverse on-ramps for beginners, create a sense of belonging, build confidence in skills, cultivate a community of supportive peers, ensure adult gatekeepers are supportive and inclusive, create continuity between computing experiences and provide access to computing experiences. It is a more holistic experience that brings confidence to students and empowers them to develop to their full potential in organisations that are mindful and working towards workplace gender equality.
From an impact perspective, CodeOp addresses a clear underserved market for women and the TGNC community in tech jobs through nurturing community and reskilling. 54% of CodeOp students were either unemployed or were going to be made redundant. It also commits to offer partial and full scholarships in every bootcamp to women in fragile and vulnerable situations (sex workers, domestic violence, immigrants, unemployed, etc.), equivalent to over tens of thousands of Euros in forfeited revenue.
What CodeOp has achieved so far
The company now runs three online and offline courses (full stack, data science and product management). 2020 forced the company to go fully remote, which boosted its operations. It also opened a new campus in Kuala Lumpur thanks to non-governmental grants and NGOs such as The Asia Foundation.
Since 2019, CodeOp has run over 20 bootcamps both online and offline, teaching over 150 students across 40 countries (particularly Europe, Asia and North America). 90% of participants have found a tech job in the six months after finishing the program, with a higher average salary than before starting. The company has grown over 120% in annual revenues and 200% in students, year-on-year, over the past two years. It has developed a network of over 150 corporates and startups that are looking for diverse backgrounds for their tech teams. It is now exploring key B2B partnerships with responsible tech companies who are willing to do their part to increase diversity in their tech teams and give the right opportunities and role models for women and TGNC minorities. A good example of this is the recent partnership with Bumble offering a fully-paid 6-month junior engineering program for women and the TGNC community who will then go on to work as junior Software Developers in Bumble afterwards.
The company has now raised €1.25m and Ship2B Ventures has acted as lead investor. They plan to use the money to create new hubs across Europe and LatAm (Brazil, Mexico and Germany) by 2022. The long-term objective is to have 10 campuses by 2025 that help cover all main time-zones.
Why we invested in CodeOp
The main reasons behind our rationale to invest in CodeOp can be summarized in:
- Large and growing market: Strong continued demand for ICT skills paired with gender gap creates an untapped potential market for coding bootcamps focused on women and underrepresented groups. When we consider the global developer population, there are about 24,5m developers worldwide and this is expected to widen to 45m developers by 2030. Furthermore, only 11% of the current working developers are women (2,7m). To reach gender parity by 2030, there is a need to train an additional 20m women worldwide with tech skills.
- Big and unsolved social problem: Women and TGNC individuals continue to be a minority in tech teams, which means the problem is not being correctly addressed to date. Co-ed bootcamps and computer science departments have failed to provide women the resources and community they need, and if we continue to rely solely on their offerings – mostly designed and led by men – we will continue to perpetuate a failing system. Katrina wants to focus 100% on women and underrepresented groups. It is a targeted approach to addressing a social need for a structurally underserved population.
- Magic Sauce: CodeOp’s magic sauce is based on creating an inclusive and welcoming community that fosters support and confidence while delivering the key academic skillset to do well in the job. If done well, this creates a virtuous spiral of positive impact: it attracts talented students that did not feel welcomed in more aggressive and/or male-led environments and becomes a strong attraction pull for recruiters in desperate need to bring diversity into their tech ranks, which in turn creates new role models and encourages more students to apply.
- Strong revenue traction: CodeOp started small with in-person bootcamps and a handful of students, but Covid pushed the company online and boosted sales and number of students. Their capacity to successfully launch both online and offline courses is key to expand to other geographies by launching new offline hubs across Europe and LatAm while serving online across the region in a time-zone friendly way.
- Attractive Unit Economics: Bootcamps have a low fixed cost base (particularly for online courses), healthy margins and a low breakeven point reached with only a handful of students per bootcamp (which helps to extend scholarships to disadvantaged students). A positive working capital (students pay either before starting or during the course) helps to boost expansion without tying too much cash in growth.
- Awesome team: Tight and bright team that believe in their mission. We interviewed every team member and verified their commitment and drive. They have gone through thick and thin together and care deeply about what they are building. Katrina’s capacity to attract talent and investors is an invaluable asset in a solo founder.
CodeOp received strong support from our investment committee from the very start and we worked hard to lead the round. Heiko Rauch (Zanox co-founder and serial entrepreneur) and Thomas Meyer (Desigual’s CEO and founder) also invested alongside. Banc Sabadell complemented the round with €250.000 in venture debt.
What we plan to work on with CodeOp
As part of our investment, we developed a joint work plan for the next twelve months, which includes:
- Formalize a board of directors and shape content and topics
- Recruit key hires with education and partnerships experience
- Execute impact plan by implementing impact measurement and tracking impact metrics on a quarterly basis
- Help achieve B-Corp certification
- Introductions to other startups and corporations looking for diverse tech talent
We are convinced that CodeOp’s contribution to reducing the tech gender gap and reskill women & TGNC individuals is going to be a force for good felt across its geographic footprint, reducing the time to get to a diverse tech workforce and making the world a better place for it. We are very excited to begin this journey together with Katrina and the whole CodeOp team.
If you have a purpose-driven startup in the climate, health or education space and are looking for investor partners, please get in touch with us!
Investor with more than 10 years of experience in the venture capital sector. He has worked for Morgan Stanley, Telefónica and Centrica in the areas of investment and corporate innovation. Currently, he works as the Investment Director at Ship2B Ventures.