Bitwise Industries lands $80M to expand its sprawling software dev business
In 2013, Irma Olguin Jr. -- a third-generation Mexican American and the first in her family to go to college -- was working on making coding instruction available to disadvantaged members of her community. During her work, she met Jake Soberal, an intellectual property lawyer, who shared Olguin's desire to leverage the tech industry to effect change at the local level.
As Fast Company notes, Bitwise made headlines in 2019 when it raised $27 million -- one of the largest Series A rounds ever secured by a company with a female Latinx founder. Historically, female founders have received just 12% of venture capital investment for their businesses.
Olguin and Soberal's latest venture through Bitwise is commercial real estate -- the two develop and turn previously blighted buildings into coworking spaces, restaurants, theaters and more. Evidently impressed with the three-pronged business model, investors — including Kapor Center, Motley Fool, the Growth Equity business within Goldman Sachs Asset Management and Citibank — poured $80 million into Bitwise this week, bringing the company's total capita raised to over $200 million.
The new cash will be used to support Bitwise's expansion into Chicago and the growth of the startup's other locations, Olguin told TechCrunch in an email interview. She and Soberal plan to eventually bring Bitwise's businesses into 40 cities nationwide.
"Bitwise Industries' approach has delivered business value in the form of digital transformation nationwide resulting in unprecedented company growth despite global economic instability," Olguin said. "This latest raise, led by a group of distinguished investors, acknowledges the role technology plays in driving economic impact in previously underserved communities, and validates our model making it possible for us to roll out our proven approach into other parts of the country."
It's tough to capture Bitwise's business in a sentence -- it's sprawling -- but the bulk of the company's revenue comes from partnering with organizations to build digital solutions. Olguin claims that Bitwise has over 500 customers across 15 states, with dozens of agencies and municipalities, for which it's providing software implementation services.
For example, Bitwise helps Salesforce and DocuSign customers design, build and deploy apps that streamline the business's process. The firm also delivers custom app and website design services, plus access to a pool of contract-basis software developers.
Bitwise's Bakersfield, California building. Image Credits: Bitwise
Bitwise -- whose revenue Forbes estimated at $40 million in 2020 -- claims to have helped create 15,000 jobs in just one of the cities where it operates. One of its larger initiatives was the "Digital New Deal," a program in collaboration with California state and local governments to provide students in Bitwise's apprenticeships the opportunity to work with government agencies on tech-related projects. Olguin says that, to date, Bitwise has renovated over a million square feet of real estate in underserved downtown areas and supported the skilling of over 10,000 people.
"We operate outside major tech hubs to reach people who have been overlooked," Olguin said. "Bitwise Industries is working to change entrenched bias and make people in positions of power see that sharing privilege actually strengthens companies."
It's a noble mission for a commercial venture. To his credit, Olguin doesn't play down Bitwise's for-profit status -- or its profitability. To the contrary, he spotlights the startup's many recent strategic acquisitions, which include Salesforce implementation firm Esor Consulting Group, Denver-based software developer Techtonic, DocuSign partner Stria and technical institute the Array School.
"Our funding is driving participation in the digital economy from groups of people who were previously left out of these types of opportunities," Olguin said. "No one is doing what we are doing at the scale we are doing it across the country."
Hillel Moerman, a partner at Goldman Sachs, added in an emailed statement: “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.”
Bitwise currently has 10 locations with more than 500 employees, a number that's triple what it was three years ago. Olguin says that she expects to see similar growth by the year's end.