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Blair launches $100M facility to fund ISAs for students

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Income-share agreements or ISAs have been gathering force as an alternative financial model for students, particularly at non-traditional schools like coding boot camps and trade schools. We’ve done some pretty deep dives into the space over the years in terms of how these loan products incentivize students and colleges to work together for better professional outcomes. Given their novelty though, one of the largest barriers to wide adoption remains the lack of capital for these models.

That’s starting to change, and companies like Blair are leading the charge.

Blair told TechCrunch that it has raised $100 million in a new debt facility to fund what it is dubbing “Blair Capital” to fund ISAs at partner institutions. The money came from an undisclosed investor, which was described by Blair CEO Mike Mahlkow as an “institutional capital partner with more than $10 billion under management.”

My colleague Mike Butcher first profiled Blair when it was coming out of YC back in summer 2019. When Blair first got started by co-founders Mahlkow, Constantin Schreiber, and David Nordhausen, it was focused exclusively on the direct-to-consumer market for ISAs. The idea was that students would go to Blair and secure an ISA with a set amount of upfront cash to cover tuition and cost of living, and then choose a school to attend. Underwriting was based on the future income potential of the student.

Blair’s technology platform allowed it to service ISAs for students, such as collecting their payments, tracking their requirements, and giving them updates on their remaining terms. But to really scale up the platform, Blair needed capital to actually underwrite ISAs and increase loan volumes on its platform.

So it looked to raise a debt facility — and then COVID-19 hit. “It was very, very, difficult to raise any kind of debt capital for direct-to-consumer ISAs,” Mahlkow explained in the milieu of a pandemic. But, “we got a lot of inbound demand from education institutions,” and particularly from alternative schools like coding boot camps.

Blair’s team. Photo via Blair.

So Blair rejiggered its platform (now dubbed Blair Servicing) away from D2C lending to being a technology servicing layer for schools offering ISAs as part of their programs. From there, it constructed Blair Capital, this new $100 million facility which can be used by its partner schools to fund their own ISA programs. That means these schools won’t have to raise their own debt capital for their ISAs if they don’t want to.

Unlike Blair’s original approach focused on consumers, underwriting for ISAs is now based on the quality of an individual school, and even more specifically an individual program. So rather than underwriting a person, Blair knows that certain programs have a given return profiles and can underwrite terms of the ISA to fit that risk.

Terms can vary widely between programs. Mahlkow explained that the company more or less has merely floors and ceilings on terms but otherwise is flexible. For instance, the company won’t do income shares above 20% (and often gets queasy even going near that number), and there are repayment caps and limits on repayment time periods as well, with most ISAs it offers being between 1-2 years or a maximum of three years.

Alternative schools with track records of student achievement can use Blair Capital right away. For newer schools without the same operating history, Blair will help guide those schools to build the early track record they need so that the company can underwrite their ISAs in the future. Either way, all schools can use Blair Servicing to handle their loans.

The school dashboard within Blair Servicing. Photo via Blair.

Blair Servicing takes a percentage fee of the money that flows back from an ISA after graduation, while Blair Capital takes an origination fee plus joins in the upside of the ISA itself. The goal is to incentive-align the loans for all parties involved.

The company, which is based in SF, remains lean at six employees. With $100 million capital to fund ISAs though, it hopes to have an outsized impact on this burgeoning industry.

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Qualcomm veteran to replace Alain Crozier as Microsoft Greater China boss

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Microsoft gets a new leader for its Greater China business. Yang Hou, a former executive at Qualcomm, will take over Alain Crozier as the chairman and chief executive officer for Microsoft Greater China Region, according to a company announcement released Monday.

More to come…

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Autonomous drone maker Skydio raises $170M led by Andreessen Horowitz

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Skydio has raised $170 million in a Series D funding round led by Andreessen Horowitz’s Growth Fund. That pushes it into unicorn territory, with $340 million in total funding and a post-money valuation north of $1 billion. Skydio’s fresh capital comes on the heels of its expansion last year into the enterprise market, and it intends to use the considerable pile of cash to help it expand globally and accelerate product development.

In July of last year, Skydio announced its $100 million Series C financing, and also debuted the X2, its first dedicated enterprise drone. The company also launched a suite of software for commercial and enterprise customers, its first departure from the consumer drone market where it had been focused prior to that raise since its founding in 2014.

Skydio’s debut drone, the R1, received a lot of accolades and praise for its autonomous capabilities. Unlike other consumer drones at the time, including from recreational drone maker DJI, the R1 could track a target and film them while avoiding obstacles without any human intervention required. Skydio then released the Skydio 2 in 2019, its second drone, cutting off more than half the price while improving on it its autonomous tracking and video capabilities.

Late last year, Skydio brought on additional senior talent to help it address enterprise and government customers, including a software development lead who had experience at Tesla and 3D printing company Carbon. Skydio also hired two Samsara executives at the same time to work on product and engineering. Samsara provides a platform for managing cloud-based fleet operations for large enterprises.

The applications of Skydio’s technology for commercial, public sector and enterprise organizations are many and varied. Already, the company works with public utilities, fire departments, construction firms and more to do work including remote inspection, emergency response, urban planning and more. Skydio’s U.S. pedigree also puts it in prime position to capitalize on the growing interest in applications from the defense sector.

a16z previously led Skydio’s Series A round. Other investors who participated in this Series D include Lines Capital, Next47, IVP and UP.Partners.

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Space startup Gitai raises $17.1M to help build the robotic workforce of commercial space

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Japanese space startup Gitai has raised a $17.1 million funding round, a Series B financing for the robotics startup. This new funding will be used for hiring, as well as funding the development and execution of an on-orbit demonstration mission for the company’s robotic technology, which will show its efficacy in performing in-space satellite servicing work. That mission is currently set to take place in 2023.

Gitai will also be staffing up in the U.S., specifically, as it seeks to expand its stateside presence in a bid to attract more business from that market.

“We are proceeding well in the Japanese market, and we’ve already contracted missions from Japanese companies, but we haven’t expanded to the U.S. market yet,” explained Gitai founder and CEO Sho Nakanose in an interview. So we would like to get missions from U.S. commercial space companies, as a subcontractor first. We’re especially interested in on-orbit servicing, and we would like to provide general-purpose robotic solutions for an orbital service provider in the U.S.”

Nakanose told me that Gitai has plenty of experience under its belt developing robots which are specifically able to install hardware on satellites on-orbit, which could potentially be useful for upgrading existing satellites and constellations with new capabilities, for changing out batteries to keep satellites operational beyond their service life, or for repairing satellites if they should malfunction.

Gitai’s focus isn’t exclusively on extra-vehicular activity in the vacuum of space, however. It’s also performing a demonstration mission of its technical capabilities in partnership with Nanoracks using the Bishop Airlock, which is the first permanent commercial addition to the International Space Station. Gitai’s robot, codenamed S1, is an arm–style robot not unlike industrial robots here on Earth, and it’ll be showing off a number of its capabilities, including operating a control panel and changing out cables.

Long-term, Gitai’s goal is to create a robotic workforce that can assist with establishing bases and colonies on the Moon and Mars, as well as in orbit. With NASA’s plans to build a more permanent research presence on orbit at the Moon, as well as on the surface, with the eventual goal of reaching Mars, and private companies like SpaceX and Blue Origin looking ahead to more permanent colonies on Mars, as well as large in-space habitats hosting humans as well as commercial activity, Nakanose suggests that there’s going to be ample need for low-cost, efficient robotic labor – particularly in environments that are inhospitable to human life.

Nakanose told me that he actually got started with Gitai after the loss of his mother – an unfortunate passing he said he firmly believes could have been avoided with the aid of robotic intervention. He began developing robots that could expand and augment human capability, and then researched what was likely the most useful and needed application of this technology from a commercial perspective. That research led Nakanose to conclude that space was the best long-term opportunity for a new robotics startup, and Gitai was born.

This funding was led by SPARX Innovation for the Future Co. Ltd, and includes funding form DcI Venture Growth Fund, the Dai-ichi Life Insurance Company, and EP-GB (Epson’s venture investment arm).

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