This article was first published in the Australian Financial Review.
Steve Baxter's Transition Level Investments has led a $2.5 million funding round into education technology start-up InsideSherpa, which has already won over major clients like Citibank and JP Morgan Chase.
The company creates virtual internship programs for major corporates with the aim of letting students from any location and background take part, thereby building up the pipeline of diverse graduate talent for the businesses.
It is one of only a small group of Australian companies to have participated in renowned Silicon Valley accelerator Y Combinator and has since relocated its head office to the US, despite still considering itself an Aussie business.
Speaking to The Australian Financial Review, InsideSherpa co-founder Tom Brunskill, who was formerly a mergers and acquisitions lawyer at King & Wood Malleson, said he was introduced to his co-founder, Pasha Rayan, through a mutual friend and the pair discovered a mutual interest in education and helping students find opportunities.
"Pasha was an immigrant from Indonesia and came from a single-parent family... and faced a whole bunch of unique obstacles to get his first job at KPMG," he said.
"For me, a lot of my family lives in regional NSW and I've seen the hurdles they face to get experience, career confidence and visibility, so we built a product around that."
Since the first program was launched in December 2017, more than 90,000 students have enrolled in the courses.
It has 23 internships live on its website but has another 15 in production.
It got its start by winning over the local divisions of major professional services firms including Mr Brunskill's former employer King & Wood Mallesons as its first client, as well as Deloitte, KPMG and Grant Thornton.
Mr Brunskill said this, accidentally, would become critical to its international expansion strategy.
"When we came to the US and also started selling into the UK, we used those relationships to get introductions to their US and UK colleagues. Having those companies vouch for us and speak to their experience made the sales process immeasurably easier," he said.
The business now has 12 staff employed across Sydney, San Francisco, New York and London and is growing revenue by 25 per cent month-on-month and already turning over more than $1 million a year.
Despite only launching a month ago, the Citi internship, which helps prepare students for a career in investment banking, has already had 4000 enrolments.
The company intends to measure how many of the students taking part in its programs go on to get jobs at the firms.
"We already have an example of Deloitte hiring someone from our program who was a science PhD student who was pregnant and stressed about entering the workforce. Deloitte had wanted to hire post-grad students from a STEM background in Canberra and they found her and hired her," Mr Brunskill said.
"Another person who got hired by Grant Thornton did its audit program and reported a number that didn't make sense to her and they were so impressed by her attention to detail they asked her in for an interview."
Other investors in InsideSherpa's raise included FundersClub and Arizona State University.
In the next three years it has a goal of having 1 million students complete its internships.
Mr Baxter said the fund first connected with the co-founders when they participated in Y Combinator earlier this year and had followed the company's progression since then.
"I saw companies around the world struggling to hire the best talent. Traditional recruitment methods weren’t cutting it with the ‘digital first’ generation," he said.
"InsideSherpa’s virtual internships were a great way for companies to take a data-driven approach to recruitment. It helped them engage with digitally-centric graduates and position themselves as innovative employers of choice."