Venture Capital and Private Equity Dominate LAUSD Contracts

The report argues that LAUSD has significantly increased its reliance on private vendors under Superintendent Alberto Carvalho, with a high concentration of contracts going to venture capital and private equity-backed firms. It highlights risks including lack of oversight, potential data privacy violations, and the prioritization of profit over student outcomes, citing specific examples like the failed AllHere AI chatbot and the consolidation of edtech by Veritas Capital.

• Since Superintendent Alberto Carvalho took office in 2022, LAUSD has approved $10 billion in contracts with outside vendors, while the district is currently on track to exceed its budget for services and operating expenses by $401 million, spending $1.5 billion.
• Digital instruction tool contracts are heavily dominated by private investment; between January 2022 and June 2025, at least 86% of these commitments went to venture capital or private equity-backed companies, and nearly 70% of these vendors were paid more than their original contract commitments.
• A significant portion of technology spending has occurred through no-bid contracts; 72% of currently active technology contracts, totaling $1.6 billion, were authorized after Superintendent Carvalho was granted emergency authority following a September 2022 ransomware attack.
• The district contracted with AllHere, a venture capital-backed AI chatbot company, for $6 million; however, the company filed for Chapter 7 bankruptcy in September 2024 after a whistleblower alleged the company used students' personally identifiable information in "egregious" ways.
• LAUSD has engaged contractors owned by firms that also fund surveillance technology used by federal immigration agencies. Specifically, Battery Ventures owns LAUSD contractors ContinuumCloud and Welligent, and previously profited from selling Paragon Solutions (maker of Graphite spyware) to AE Industrial Partners after Paragon secured a contract with ICE in October 2024.
• In special education, LAUSD has committed $723 million across 119 contracts with 93 vendors since 2022 for roles including nurses and paraeducators. One major contractor, Stepping Stones (owned by Leonard Green and Partners), operates under multiple names including the Center for Behavioral, Educational, and Social Therapies (CBEST), with combined contracts exceeding $26 million.
• Private equity firm Veritas Capital has consolidated a significant portion of the US K-12 education sector by owning Cambium Learning Group and Houghton Mifflin Harcourt (HMH), both of which serve over 90% of US school districts, including LAUSD.

APA

Creeks, A. (2026). Venture Capital and Private Equity Dominate LAUSD Contracts. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2026/04/PESP_Report_LAUSD_Privatization_April_2026.pdf

Chicago

Creeks, Azani. Venture Capital and Private Equity Dominate LAUSD Contracts. Private Equity Stakeholder Project, 2026. https://pestakeholder.org/wp-content/uploads/2026/04/PESP_Report_LAUSD_Privatization_April_2026.pdf.

Wikipedia

{{cite report |last1=Creeks |first1=Azani |title=Venture Capital and Private Equity Dominate LAUSD Contracts |publisher=Private Equity Stakeholder Project |date=April 2026 |url=https://pestakeholder.org/wp-content/uploads/2026/04/PESP_Report_LAUSD_Privatization_April_2026.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{creeks2026venture, author = {Creeks, Azani}, title = {{Venture Capital and Private Equity Dominate LAUSD Contracts}}, institution = {Private Equity Stakeholder Project}, year = {2026}, month = apr, url = {https://pestakeholder.org/wp-content/uploads/2026/04/PESP_Report_LAUSD_Privatization_April_2026.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }