The evidence that PeduL’s time has come is piling up in co-founder Chisa Egbelu’s inbox. A tech startup based in Newark, New Jersey, PeduL is a scholarship marketplace connecting students and corporations across the country. Ebelu has seen a wave of interest from venture capitalists and angel investors since the uprisings sparked by the killing of George Floyd, Breonna Taylor and others at the hands of police officers.
Some of those investors had already taken a look at PeduL, with its two young Black co-founders, but passed on the opportunity — for reasons that are largely unspoken, or euphemized.
“You go to investors, tell them here’s what’s going on, they say, ‘Great, and if you do this one thing we can talk.’ Then we do that one thing and then they say ‘my gut just says it’s not the right time,’” Egbelu says “They don’t even realize their gut is racist.”
The lack of racial and gender diversity in venture capital is well known. According to the National Venture Capital Association, only 11 percent of venture capital partners are women; and only two percent of senior staff at venture capital firms are Black.
After making their pitch last year at demo day for NVP Labs, a startup accelerator run by Newark Venture Partners, Egbelu says they met with at least 100 venture capitalists and angel investors. None decided to invest.
But since the uprisings began after Floyd’s killing, Egbelu says he has accepted three angel investor checks. The startup plans to use the cash to broaden and deepen its reach in the wake of the uprisings, with more attention and calls for action to do something about the racial inequity underlying Floyd’s death, Taylor’s death, and not to mention the disproportionate impact of the COVID-19 pandemic on Black communities.
“It’s so unfortunate the spectacle of the lynching of George Floyd is what got us more visibility,” says Kayla Jackson, the other co-founder of PeduL. “But we feel it’s in part our responsibility to help corporations not only show signs of support through performative unity through press releases and statements, but charging them to take a stand and step up into the gap between the students most affected and their future.”
PeduL started out as a way for Jackson and Egbelu to help their friends. As undergraduates at Rutgers, New Jersey’s state university, they felt too many were dropping out. It was alarming, even heartbreaking. “Our story is actually pretty common in the sense that we got tired of seeing our friends drop out because of money reasons,” Egbelu says.
An oft-cited study funded by the Bill & Melinda Gates Foundation found that the number one reason college students leave school is because they can’t afford to stay in school. Of those who left school, more than a third said it would be hard to go back even if they had a grant or scholarship to cover all of their tuition. More than half the students surveyed in the study said they needed to work full-time to support themselves or family members.
Jackson and Egbelu started meeting every Sunday at the Red Lion Cafe, in the student center on Rutgers’ main campus in New Brunswick, New Jersey. At first, Jackson says, the idea was to build something like “a GoFundMe for college tuition,” a platform for students to raise money online to cover education expenses.
“We realized early on that model at its core was pretty elitist, because it almost always required our students to already be connected with a network of capital,” says Jackson. “Chisa had a light bulb moment talking about how we could bring in outside capital.”
At the same time, they also realized even a college degree wasn’t enough to compensate for the racial differences in access to certain professional networks, whether because of friends and family connections or simply direct discrimination in hiring. One study found Black Harvard graduates have the same chances at being called in for a job interview as white state college grads going after the same jobs. Another study found Black workers are twice as likely to be unemployed as white workers regardless of education level. Another study found in the years and even decades following their graduation, white college-educated households amass wealth whereas Black college-educated households lose wealth.
Reflecting on the twin challenges of keeping their friends in college and leveling the playing field for them after college, PeduL’s co-founders pivoted the platform into providing a single interface where students could apply for scholarships and corporations could offer scholarships as a way of connecting with more diverse candidates to hire full-time after graduation.
“[A company] can’t put up a job posting for a Black woman engineer or data scientist, but they can go on our platform and advertise a scholarship for someone like that,” says Egbelu.
Others, like church groups, can also post scholarship opportunities on the platform. But rather than having hundreds or even thousands of different applications for each scholarship, the PeduL team pored over thousands of scholarship applications to come up with the 15 most common questions asked, creating what they believe to be the first “common application” for scholarships. Prospective scholars fill out an initial profile answering those questions along with some demographic information. The platform uses that information to make initial matches with corporations or other scholarship providers, who may then request answers additional questions based on their specific needs. “We’re working to make it as seamless as possible for students,” Jackson says.
The platform is free to students. Instead, PeduL works out payment arrangements with corporations on the basis of functioning like a recruitment or headhunting firm. “We’re bringing huge and diverse candidate pipelines to the door steps of companies around the country,” Egbelu says.
After establishing relationships with students through scholarships, corporations also get support from PeduL to facilitate training workshops and other opportunities for career development while the student is still in school — though students aren’t required to take a job with a company that sponsors their education as a condition of the scholarship.
So far, with little more than social media and word-of-mouth marketing, PeduL has about a million students in its database. According to Jackson, 65 percent are Black or Latinx, and 55 percent are women.
“Being a minority-owned, Black-owned business provides insights into content, narratives and partners that make sense, and craft messages in the voice of the people who we serve,” says Jackson.
As the uprisings grew around the police killings of George Floyd, Breonna Taylor and others, the PeduL team saw the unprecedented outpouring of messages from corporations in support of #BlackLivesMatter. While those were all just words, the PeduL team wanted to see how many of those corporations might want to back it up with scholarship dollars and career opportunities through their platform. They reached out to the African American Chamber of Commerce of New Jersey and launched the #StepUp20 challenge, challenging 20 or more brands to cough up at least $10 million in scholarships through PeduL.
“It was our historic response to the world right now, the two pandemics, COVID and racism,” says Jackson. “We partnered with AACCNJ not only for the purpose of legitimizing the campaign, but having community stakeholders you can start to create real change.”
The chamber will be recruiting from among its members to join the effort, including one to start — Horizon Blue Cross Blue Shield of NJ, which chipped in $10,000. The campaign is aiming to help about 2,000 students, granting them at least $5,000 each.
It may not sound like much right now, but PeduL’s long term goal is to make the scholarship dollars an ongoing commitment from each company, and maybe even grow each company’s annual commitment size over time. The growth needs to be organic and sustained on both sides — too many companies and not enough students means not enough candidates for the paying customers; too many students and not enough companies means less attraction for new students to sign up to use the platform.
The COVID-19 pandemic has at least temporarily softened expectations, given that many campuses are likely not to be open in the fall and incoming students may defer — about 20 percent of Harvard’s incoming freshman class has opted to defer.
“Ten million was a roundabout number we felt was achievable and attainable for now, especially with students figuring out futures in uncertain times,” says Jackson. “But we still see these as long-term, recurring relationships with companies.”
Editor’s note: We’ve updated this story with demographic information about the students in PeduL’s database that came in after press time.
This article is part of The Bottom Line, a series exploring scalable solutions for problems related to affordability, inclusive economic growth and access to capital. Click here to subscribe to our Bottom Line newsletter. The Bottom Line is made possible with support from Citi.
Oscar is Next City's senior economics correspondent. He previously served as Next City’s editor from 2018-2019, and was a Next City Equitable Cities Fellow from 2015-2016. Since 2011, Oscar has covered community development finance, community banking, impact investing, economic development, housing and more for media outlets such as Shelterforce, B Magazine, Impact Alpha, and Fast Company.