Lambda School, a hot online coding bootcamp that has attracted funding from the likes of Ashton Kutcher and GV, claims that 86% of its graduates find jobs within six months after graduation. But a new report from New York Magazine's Vincent Woo indicates that the statistic may be misleading.
"We're at roughly 50% placement for cohorts that are 6 months graduated," Lambda School said in a May 2019 investment memo obtained by New York Magazine. The memo was reportedly titled "Human Capital: The Last Unoptimized Asset Class."
Austin Allred, CEO of Lambda School, told New York Magazine that some student cohorts had job placement rates that low, and that since the memo involved potential risk to investors, it chose to play it safe: "We're going to pick our lowest number."
"That memo was created as part of a preparatory exercise for investor Y Combinator. The 50% placement is being interpreted without context," a Lambda School spokesperson told Business Insider.
"Specifically, the document takes 'graduation percentage x placement percentage' to arrive at the percent of enrolled students that were hired, not the percentage of graduates hired. We are releasing our own outcomes data shortly which goes into deeper detail."
Lambda School is one of Silicon Valley's most-buzzed-about startups: A graduate of the famed Y Combinator startup accelerator program, it differentiated itself from other similar programs with its income sharing agreement (ISA) model.
The school is free upfront, and after students graduate and find a job paying $50,000 or more, they pay 17% of their income back to the school for two years, or until they hit $30,000 in repayments, whichever comes first.
As Business Insider reported in October, former and current Lambda School students felt that the school fell short of its promises, with underqualified instructors, an incomplete curriculum, and reports of harassment getting brushed off. Some even likened it to a "cult," as they worry about being openly critical about Lambda School and getting kicked out of the school.
Last year, Lambda School also received a fine from California's Bureau for Private Postsecondary Education for failing to register with the state, and it was told it should cease operations. A BPPE spokesperson recently told Business Insider that the Bureau is still working with the school on its application and that it has no new updates.
Meanwhile, the startup has only come under more scrutiny, as separate reports from the Information and the Verge show that student complaints about the program haven't gone anywhere.
Lambda School did not immediately respond to a request for comment.
Got a tip? Contact this reporter via email at rmchan@jkmperu.com, Signal at 646.376.6106, Telegram at @rosaliechan, or Twitter DM at @rosaliechan17. (PR pitches by email only, please.) Other types of secure messaging available upon request. You can also contact Business Insider securely via SecureDrop.
