Bitwise Industries

» see bitwiseindustries.com as it lived, on the wayback machine

~ the last words ~

Bitwise Industries began in 2012 as Geekwise Academy, a coding bootcamp in Fresno aimed at people the technology industry had never recruited from. A local lawyer named Jake Soberal ran it with Irma Olguin Jr., a technology designer and instructor from the Central Valley. In July 2013 the bootcamp became a company, bought an eight-thousand-square-foot building downtown and started leasing workspace to small software firms. Its own development arm was called Shift3 Technologies.

The buildings were the visible part. In 2015 Bitwise opened South Stadium, a fifty-thousand-square-foot former car dealership that had sat empty for years, rebuilt into three floors of offices with a coffee shop and a 160-seat theater. James Fallows wrote about Fresno in The Atlantic in 2015 and came back to write about Bitwise again in 2019. The company became the standard answer to a question American journalism liked asking in those years, which was whether a technology economy could exist outside of a handful of coastal cities.

Money followed the story. Kapor Capital led a $27 million round in June 2019 specifically to open campuses in other cities, and a $50 million raise followed in February 2021 to scale the apprenticeship program. By 2022 Bitwise was renovating the old central post office in downtown Toledo and a thirty-two-thousand-square-foot building on Buffalo's East Side, with the Sotoa Building in El Paso next and ten cities projected.

Then on 31 May 2023, with no notice, all nine hundred employees were furloughed. Paychecks bounced and retirement accounts froze. The board terminated Olguin and Soberal on 2 June and installed Ollen Douglass as interim president, and on 29 June the company entered Chapter 7 liquidation in a Delaware federal court. Twenty-nine days separated the furlough notice from the bankruptcy filing.

~ the record ~

~ the promise ~

What Bitwise sold to investors was a thesis about geography. The talent was already in cities like Fresno and Toledo, the argument went, and what it lacked was a building with somebody in it willing to hire. That thesis is not obviously wrong, and it is worth saying that the apprenticeships were real and that several hundred people did get paid work out of them.

Nothing in my own history touches Fresno, and the civic weight of this belongs to people who actually live there. What I can judge is the structure. A company whose revenue came mostly from workforce training and real estate, sold to investors as a technology company, is a shape that reads the same in any language, and that half of the story needed no translation at all.

~ the paper trail ~

The collapse had been legible for weeks to anyone with access to a court docket. On 24 May 2023 a local outlet was already asking whether the boom was over, after discovering that the city of Fresno said Bitwise had not paid its taxes in two years. On 31 May, the same day as the furloughs, a Texas firm that had financed five of Bitwise's real estate acquisitions sued, alleging the company had taken loans it was not authorized to take and listed properties for sale it was not authorized to sell. By early June, reporters had the detail that would eventually define the case: Soberal had been telling hard money lenders that a large Goldman Sachs investment was about to close. There was no Goldman Sachs investment.

~ the sentence ~

On 9 November 2023 the US Attorney's Office for the Eastern District of California charged both founders with wire fraud, putting the fraudulently obtained figure at $100 million. In July 2024 they changed their pleas to guilty on wire fraud and conspiracy and agreed to $115 million in restitution. In December 2024 Soberal was sentenced to eleven years and Olguin to nine.

Prosecutors described what the money had actually paid for, and the list is ordinary to the point of being sad: payroll, the fitting-out of offices, inflated salaries for the two chief executives, and debts owed to earlier investors and lenders. There was no yacht. The fraud was the oldest one there is, which is borrowing from the next investor to pay the last one, run at the scale that a decade of good press makes possible. Somebody taped a belief-of-abandonment notice to the door of South Stadium, the building that had been the proof.

~ what Fresno kept ~

The buildings are still downtown and some of them have new tenants. The people who learned to write software at Geekwise still know how to do it. The argument is what died. For a decade Bitwise was the example everyone reached for when they wanted to show technology investment working away from the coasts, and the example turned out to be a crime, so the next founder out of the Central Valley walks into every meeting carrying it.

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