Carl Madi spent a chunk of the last decade working for Uber and Handy, an online marketplace for cleaners. “I spent a lot of time convincing drivers, handyman and cleaners, to join the gig economy,” he told TechCrunch. But when the pandemic struck, he saw many people lose their jobs overnight.
He noticed that there was a significant shortage of medical assistants, a career that was recession-proof and provided attractive pay and benefits. So, Madi (pictured above in the center) wondered if he could help cleaners become medical assistants.
“When I looked into it, I realized that most pathways are either trade schools or community colleges,” he said. “They can take up to two years and cost up to $20,000.”
In 2021, he teamed up with Tressia Hobeika (pictured left), who had previously worked at Udacity, and an ex-Apple engineer Edoardo Serra (pictured right) to found Stepful, an AI-powered online program that trains people for entry-level healthcare jobs like medical assistants and pharmacy technicians in four months at an average cost of $2,500.
Since then, Stepful has grown from having only 50 students in its first year to expecting 30,000 enrollees in 2024.
Madi says students like the fact that Stepful balances flexibility with structure. Although students can do a lot of their learning asynchronously and in bite sizes on their phones, they must attend a weekly instructor-led class and work in groups. “It’s a much more engaging way of learning,” Madi said.
After completing the online coursework, Stepful automatically matches students with one of its 8,000 partner clinics or hospitals throughout the country for one or two months of hands-on training.
Since there aren’t enough healthcare workers, employers are eager to train these students, according to Madi. “What they say is, ‘let’s host these students. We can train them, and then if we like them, we will hire them,’” he said.
The company also boasts a 75% graduation rate, which Stepful achieves by having its AI send personalized messages to students who are falling behind. And if that doesn’t help get people back on track, a human coach intervenes to provide additional motivation. “People feel that they’re supported, nurtured, and we see them,” Madi said.
Students seem to like the education Stepful offers them, but they aren’t the only ones who are flocking to the company. On Wednesday, Stepful announced that it raised a $31.5 million Series B led by Oak HC/FT with participation from Y Combinator, Reach Capital, AlleyCorp and others. The funding comes less than nine months after Stepful raised its $12 million Series A.
“We have seen that there’s a huge demand for allied health professionals,” said Vig Chandramouli, a partner with Oak HC/FT. In fact, the U.S. healthcare system is projected to soon be short of 3.2 million workers, including allied health professionals such as medical technicians and assistants, as well as nurses and mental health professionals, according to the American Hospital Association.
Oak HC/FT has looked at other startups that help solve the healthcare worker shortage but found that staffing companies like Nomad Health have narrow gross margins and don’t help to increase the supply of professionals, Chandramouli said.
“What we liked about Stepful was that it is taking people who are hourly workers, in most cases, and getting them into the health care field where they have steady salaries and proper benefits,” he said. “They are also clever in how they’re leveraging generative AI.”
In other words, by relying on GenAI, Stepful ensures that its metrics look more like a tech business with much fewer humans in the loop than a regular education program.