Bitwise Industries, the Fresno-born tech incubator and co-working start-up, has – at times – struggled to define exactly what it does as it enters so-called “underdog cities” to revitalize broken down buildings and spark tech innovation.
Amid reports of financial collapse, documents shared by insiders at the firm with The Sun shed some light on how the firm conducts business and what drove its growth.
A complicated business: The firm, which has built its brand on rehabbing aging buildings in economically-depressed communities, operates three principal business units: programming instruction and workforce development, technology sales, and real estate operations.
- How the firm has built its base of revenue, however, is largely reliant on a steady stream of nonprofit and taxpayer dollars, documents reveal.
- According to a sales report provided to The Sun, Bitwise reported earning $14.79 million via its tech sales between 2021 and 2015.
- A secondary report, highlighting the firm’s largest income-generating transactions, however, pointed to more than $26 million in income during the same span.
Take a deep dive: The firm’s large-scale income transactions – defined as individually exceeding $150,000 – break down via four key categories: Inside tech sales to Bitwise-affiliated entities and subsidiaries, outside tech sales, government-funded grants, and nonprofit grants.
- The firm reported earning a total of $700,000 in large-scale transactions in 2018 via OMW App LLC, a Bitwise-affiliated entity that operates restaurant management software Ordrslip.
- Bitwise earned $2.8 million of its largest deals via selling its outside tech developoment services to clients including Fresno Unified School District and Fresno County Superior Court.
- Of those transactions, the largest single development deal occurred in 2021 with Maryland-based CTC Technology and Energy to produce a Broadband call center software as a service (known in industry parlance as CCSaaS).
- Per the report, in recent years, its big-ticket revenue pivoted toward taxpayer dollars, with the firm capturing $4.1 million in government-issued grants from the likes of the cities of Bakersfield and Fresno, the U.S. Department of Labor, and Kern Community College District.
- The largest grants were a pair of $1 million grants issued by the City of Fresno and the Fresno County Economic Development Corporation through their respective COVID relief funding.
- The company also earned $2.46 million via grants specifically dedicated for its apprenticeship programs.
- The report also intermingled a small sample of investments from venture capital firms as part of its deals, while omitting the overwhelming majority.
- Meanwhile, over its lifetime, Bitwise accrued $14,860,171 – or roughly 57 percent of its large-scale transactions – via nonprofit grants issued by private foundations, led by Microsoft (via the El Paso Community Foundation), the James Irvine Foundation, and the Sobrato Foundation.
Document Key: Green: Outside tech sales / Red: Internal tech sales / Peach: Nonprofit Grants / Purple: Government Grants / Blue: Apprenticeship Agreements / Gold: External investment
