Hermosa Beach educational startup UCode is preparing to graduate to the national stage after raising money from big-name tech investors.
UCode, headquartered in a strip mall on Artesia Boulevard, teaches computer programming to kids. The company recently closed a $1.7 million round of venture capital and angel funding from top tech investors including Fred Wilson, an early backer of Twitter. The deal values UCode at $6.9 million.
Only three years ago, chief executive Scott Mueller started UCode from a single desk he rented at a Hermosa tutoring center. UCode has since expanded to four locations: Hermosa Beach, Torrance, Beverly Hills and Santa Maria. Mueller said he’s using the investment money to lay the foundation for opening centers across the country.
“The money is going to allow us to prepare and get all the policies and procedures in place, to get the curriculum nailed down and perfected and to get all of our infrastructure ready to scale,” Mueller said. “At that point we’re going to start opening more and more centers all over.”
Mueller decided to raise money after acquiring rival CodeWorld.com last year in an all-stock deal. Soon after, CodeWorld Chief Executive Michael Yang joined UCode as chief operating officer in September. Yang encouraged Mueller to raise money to expand the company, and they subsequently approached 22 venture capital firms. (Things with Yang didn’t work out, however, and he left the company in February).
The investors in the recent funding round are Fred Wilson, an early backer of Twitter, Tumblr, Foursquare and Zynga; Bloomberg Beta, the venture capital arm of financial services giant Bloomberg L.P.; Silicon Valley venture capital firm High Line Venture Partners; L.A. venture capital firm DFJ Frontier; and Idealab, the Pasadena technology incubator founded by Bill Gross. The round closed in mid-March. Klaus Schauser, founder of the company behind GoToMeeting and GoToMyPC, is also an investor through an earlier deal.
Now, Mueller is figuring out how best to grow. Once everything is in place, he envisions opening up 400 centers in the next five years, although that number is a rough estimate, he said. The company will own the initial centers, but Mueller is also considering a franchise model to enable quicker growth with fewer upfront expenses.
UCode’s curriculum teaches kids ages 6-19 to build apps, websites, games and robots using programming languages such as HTML and JavaScript. One of the most popular activities is Minecraft modding, or writing code to add new features to the popular video game Minecraft.
Students can either visit a center for two hours a week or learn the coursework from home. There are typically four students per teacher. Classes cost about $200 a month.
Mueller, who began a PhD in computer science at USC before becoming a full time entrepreneur, had the idea to start UCode a few years ago after diving into research on brain development that emphasized the importance of challenging children intellectually at an early age. He began teaching his son, Ken, simple math when the child was four years old. By the time Ken was six years old, Mueller was teaching him calculus, and eventually, computer programming. That’s when Mueller had an epiphany.
“His mind was on fire,” Mueller said. “I felt like every kid should be getting this.”
Mueller at the time was running startup AppleTree.com, which sought to connect people through online family trees, from his home in Manhattan Beach. But in late 2011, he pitched his board on the new direction for the company. He returned some of the investors’ money and set off with less than $100,000 in funding. He knew he had found his passion.
“This is what I was meant to do,” he said. “This is what I’m passionate about.”
In March of 2012, he rented a desk at Hermosa tutoring center BrainiacsGym for $200 and enrolled his first two students. Much of the company’s growth since then has come from word-of-mouth. Subsequent centers were opened to accommodate increased demand from students living outside of Hermosa Beach, he said.
UCode now has about 46 employees, including teachers, many of them computer science students or graduates. The staff recently moved into a new office space next to their Hermosa Beach center.
The company also sees itself as a natural fit for after-school activities. UCode recently offered its services to the Hermosa Beach School District, which is looking to add more after-school options for kids. UCode has already partnered with the Lompoc Unified School District to provide after-school coding lessons.
Mueller said he sees a shift in the mindset towards computer science education, and has been encouraged by some political momentum to expand the subject matter in schools. For example, Arkansas Governor Asa Hutchison earlier this year signed a bill into law requiring public and charter high schools in the state to begin offering computer science classes starting next school year.
Meanwhile, his focus for now is on opening new centers.
“I’m hoping that by the end of the year we’re ready to really scale,” he said.
