Fresno, California, is not where you’d expect to find a startup like Bitwise Industries, which trains tech workers, develops software and invests in tech-friendly real estate. It has $27 million in venture capital backing, a valuation of $100 million and 2019 revenue Forbes estimates at $20 million. “You could argue that Fresno is one of America’s most broken cities,” says cofounder Irma Olguin Jr., 39. “We have four of the ten poorest zip codes and one in four people live below the poverty line.”
Olguin is determined to change those statistics. Her own life story is a testament to beating the odds. A third-generation Mexican American, she is the granddaughter and daughter of field laborers and the first in her family to go to college. She self-identifies as queer and stands all of 5 feet tall, with hair dyed pink at the tips. Most days she wears jeans and T-shirts.
For legal help, she hired fellow Fresno native and intellectual property lawyer Jake Soberal, now 35, in 2010. Olguin and Soberal shared their frustrations over the limited career prospects in their hometown, and they talked about solutions. “Teaching people to code, taking folks from a story of poverty and seeing if they could enter into the technology industry, that was the foundational pillar for Bitwise,” says Olguin.
Though Geekwise moved all its courses online in March when California issued a stay-at-home order in response to the coronavirus pandemic, 700 students signed up for classes this spring, double the number in spring 2019. For the 30% to 40% of students with no computers or broadband access at home, Geekwise has scrambled to provide loaner laptops and raise money to help pay for internet service.
Each Geekwise course costs $250, and most students take a total of six to prepare for an entry-level job. Roughly 30% are individuals who sign up and pay on their own. The rest get their tuition covered by government job training programs, schools and social service organizations, including eight Central Valley school districts and the Fresno County Department of Social Services. Private companies like Google also contract with Geekwise. The boot camp’s 4,500 graduates include veterans and people with criminal records. Bitwise has hired dozens of Geekwise alumni.
To boost the hiring pipeline for Geekwise alumni, Olguin and Soberal started a software development division called Shift3 Technologies. It builds apps and custom programs for small and medium-sized businesses. A quarter of Shift3’s 100 employees are Geekwise alumni. Olguin is proud that half of Shift3’s employees are female, half are from underrepresented ethnic and racial groups and a fifth are first-generation Americans. She says 60% of Bitwise’s revenue comes from Shift3.
Bitwise’s third business invests in commercial real estate. Olguin and Soberal initially raised $500,000 from investors to buy a 50,000-square-foot building in downtown Fresno that had been empty for 60 years since its last incarnation as a car dealership. The rehabbed building, named Bitwise South Stadium, now has three floors of office space, a coffee shop and a 200-seat theater. Altogether Bitwise owns 250,000 square feet in downtown Fresno, including a massive brick structure that dates back to 1918. Originally designed as a cold storage facility, Bitwise bought it last year and is investing more than $10 million to create retail, restaurant and office space.
Two years ago, Olguin and Soberal decided they wanted to expand Bitwise beyond Fresno. They started pitching venture firms, including Kapor Capital, an Oakland, California, fund run by Lotus software founder Mitchell Kapor. The fund invests in tech startups with a social impact mission, which made Bitwise a good fit. But at first, Kapor ignored Olguin’s emails. “I thought, what could possibly be going on in Fresno?” he says. Then, in January 2019, he made the three-hour trip for an in-person visit and agreed to lead a $27 million funding round that included New Voices Fund, run by African American beauty entrepreneur Richelieu Dennis.
“They’ve created a holistic model of all these moving parts that work together synergistically,” says Kapor, who sits on Bitwise’s board. “They have a deep sense of the lived experiences of the folks that they’re serving and that’s embedded in everything they do.”
Before the pandemic hit, Olguin and Soberal hosted monthly tech networking events such as pizza parties, art shows and a speaker series at Fresno’s 4,000-seat Saroyan Theater that kicked off with Apple cofounder Steve Wozniak.
The lockdown has strained the real estate business. Olguin says that 70% of the staffers who work for Bitwise’s 200 tenants are telecommuting and her rental income has fallen 20% to 30% since it took effect. One of her larger tenants, newspaper publisher McClatchy, filed for bankruptcy in May but Olguin says the company is still paying rent. Building workers wear gloves and masks and maintain a 6-foot distance from one another, and Bitwise provides antibacterial wipes and hand sanitizer at every entry point.
Olguin says she believes the real estate business will come back “with a vengeance” once the lockdown has lifted. “People want community—they want hustle-and-bustle,” she says.