Bloom Institute of Technology, also known as BloomTech, is a coding bootcamp providing for-profit massive online course.
Launched in 2017 under the name Lambda School, it gained attention for being a coding bootcamp that offered income share agreements as a method of financing.
During this time, it deceived students about costs, made false claims about graduates’ hiring rates, and engaged in illegal lending.
[1] Following several layoffs and cost cutting measures, it transitioned from a bootcamp model to MOOC, and refocused on traditional student loans.
Nelson was an instructor for the code bootcamp DevMountain,[3] and Allred was a manager at the payday loan company LendUp.
BloomTech joined Y Combinator in 2017,[6] and raised seed capital in 2018 from Ashton Kutcher's Sound Ventures, Gmail creator Paul Bucheit, and Zynga co-founder Justin Waldron.
[7] In January 2019, investors including Google Ventures, Y Combinator, and Ashton Kutcher placed $30 million in BloomTech investments.
[1] In addition, the CFPB released students from their income share agreements, and banned both the company and Allred from consumer lending activities.
On August 2, 2018, the company announced, "every single Lambda School graduate who has been on the job market for six months is either employed in a full-time role as a software engineer or has joined an early startup working for equity.
"[19] The following day, the executive team reprimanded staff for poor placement rates, citing a class where only one-third of students found jobs six months after graduation.
In February 2021 BloomTech leaders informed all staff that "qualified job placements" (those making $50,000) were 27% at six months post graduation.
For example, the data science class was taught by the CEO's brother, whose only experience was graduating from a web development bootcamp and attending an internship at a small company in Utah.
Some compared the program to a cult, with staff on Slack encouraging students to respond to critical social media posts with positive testimonials.
[30] The length was shortened from nine months to six, and Team Leads (paid staff analogous to Teaching Assistants) were removed from the program.
[31][32] According to California Education Code,[33] all private postsecondary schools (such as BloomTech) must register with the state and wait for approval before operation.
In March 2019, California's BPPE consumer protection bureau fined BloomTech $75,000, and ordered them to cease operations.
[43] In April 2021, California's Department of Financial Protection and Innovation reached a settlement with BloomTech over misrepresenting the type of debt students were entering.
However, because the misleading blog post contradicts the consent order and Lambda’s agreement to ensure its marketing is accurate and not likely to mislead consumers, DFPI urges consumers to exercise caution when evaluating marketing and contracts for financial products and services offered by Lambda.
"[44] Between leaving his previous startup and launching BloomTech, Allred co-wrote Secret Sauce: The Ultimate Growth Hacking Guide, which described strategies for SEO, content marketing, landing pages, and gaining followers on social media.
[47] In Exploiting Twitter for User Acquisition,[48] an excerpt from his book, he recommends using tools that auto-follow strangers.
[51] As the case continued, Labs argued that BloomTech's 2020 controversies damaged the goodwill of the "Lambda" name, by virtue of the negative press.
Journalists noted the rebrand made sense in lieu of its new emphasis on loans, but the new name could also distance the company from previous controversies.