Starbucks chairman gets into education

Starbucks Chairman Howard Schultz wants consumers to think of Minneapolis-based Capella University first when they turn to online education, as much as they think of another of his ventures when they think of coffee.

Maveron, the Seattle-based venture-capital company Schultz started five years ago to invest in consumer-oriented business, said yesterday it invested $7.5 million in Capella Education.

Capella, Maveron's first education-focused investment, provides higher-education curriculum and degrees to working adults around the world.

Schultz said he's excited about the opportunity to work with Capella. He is involved in only two other Maveron portfolio companies: eBay and Potbelly Sandwich Works.

"I think the Capella opportunity for me is emblematic of the early days of Starbucks and eBay," he said yesterday from Minneapolis. "In both cases, they transformed the marketplace and did something that was never done before."

Capella has been around for 10 years positioning itself for the acceptance of the Internet. Enrollment and revenues have increased 85 percent each year since 1998. In 2002, the company had $50 million in revenue.

"I've been very excited about this investment because of the category and social implications," Schultz said. "To build a business like this that has a huge upside financially and also to do good at the same time."

To date, Capella has raised about $77 million and expects to use the money provided by Maveron to pay for operations as it turns the corner to profitability, said Steve Shank, chief executive of Capella Education. "The purpose from Capella's point of view is that the deal with Maveron is primarily a strategic partnership," Shank said. "It was the experience that (Jody Miller, a Maveron venture partner) and Howard can bring to us in building great national brands."

Schultz will act as an adviser to Capella's management team. Miller will serve as an observer to the company's board of directors.

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com.