Published on: September 13, 2021

New Apprenticeship expects next capital raise in 12-18 months, CEO says by Deborah Balshem

New Apprenticeship, a privately held provider of integrated apprenticeship programs, plans to raise capital in 12-18 months to continue scaling, according to CEO Brad Voeller.

The San Antonio-based company will likely seek between USD 8m and USD 15m, Voeller said.

Last week, New Apprenticeship closed a USD 2.5m financing led by the venture arm of ECMC Group, a nonprofit corporation focused on helping students succeed. Other investors include Michael & Susan Dell Foundation, Socratic Ventures and LearnStart VC.

Up until that round, the five-year-old company had been bootstrapped by Voeller from the sale of his prior business, Lumerit Education, an edtech company that was acquired by Pearson [NYSE:PSO] for USD 29m in 2019.

Voeller said New Apprenticeship is projecting more than USD 4m in booked revenue over the next 12 months and north of USD 20m in sales within the next two years.

New Apprenticeship partners with leading employers to develop highly skilled, diverse early-career tech talent via an integrated apprenticeship program, with a focus on digital marketing, data analysis, IT services and cybersecurity. The company is the first federally recognized national degree apprenticeship program for tech jobs in the nation, according to Voeller.

Prior to being placed with an employer, each apprentice goes through an eight- to 12-week preapprenticeship phase of online and live instruction designed around the specific needs of the employer. The apprenticeship phase then lasts for 12 months, with New Apprenticeship performance coaches providing continued customized curriculum training to ensure the apprentice adapts to the people and processes of the specific employer’s environment.

New Apprenticeship fronts the cost of the pre-apprentice phase in collaboration with grants from local Department of Labor workforce boards, generally with no cost to the apprentice. The apprentice/employment portion is paid for by grant funding and the employer. In total, the program costs approximately USD 15,000, with employers usually paying around USD 8,000 per apprentice.

Hundreds of apprenticeships have been completed and New Apprenticeship expects to have more than 300 new apprentices start over the next 12 months and more than 1,500 in the 12 months after that, according to Voeller.

New Apprenticeship has more than 120 employer partners, typically enterprise organizations that hire entry-level technical talent at scale, he said.

Voeller mentioned that New Apprenticeship did well last year, with the COVID-19 pandemic increasing the need for digital education systems capable of meeting remote and hybrid workforce demands.

Most New Apprenticeship apprentices are high school graduates or those who have community college credits or associate degrees. In addition to “earning while they are learning,” apprentices can also amass college credits through the program.

Voeller said apprentices can save up to USD 100,000 in increased earnings and saved tuition over the course of three years. Employers can save a similar amount via decreased recruitment, onboarding and training costs, and higher retention than traditional interns.

“Traditional internship programs work off a much less diverse pool of talent and result in only around 33% of interns still employed after one year,” Voeller said.

New Apprenticeship says 75% of its apprentices are underrepresented minorities, 54% are women in tech and digital marketing, 78% are rated high performers by their supervisors and more than 80% graduate to employee status once the program ends.

Voeller said New Apprenticeship’s closest peer in the emerging apprentice category is UK-based Multiverse, which in January raised USD 44m to fund expansion into the US.

Players in the broader “education-as-a-benefit” space, he added, include Guild Education and Pearson, and traditional staffing and human capital management firms such as ManpowerGroup [NYSE:MAN], TEKsystems and Robert Half International [NYSE:RHI].

In June, Guild Education, which pairs employees with employer-sponsored learning opportunities, raised a USD 150m Series E round at a valuation of USD 3.75bn.

New Apprenticeship has 14 employees. The company uses law firm Egan Nelson and accounting firm Exbo Group. —————–

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