Bitwise Industries
{{Short description|American technology company}}
{{Infobox company
| name = Bitwise Industries
| image = Bitwise 41.jpg
| image_caption = Bitwise 41 building in Fresno
| logo = Bitwise_logo.jpeg
| logo_caption =
| logo_upright =
| logo_alt =
| type =
| industry = Technology
| predecessor =
| founded = {{Start date and age|2013|07}}
| founders = Irma Olguin Jr. and Jake Soberal
| defunct = {{End date and age|2023|6|29}}
| fate = Chapter 7 liquidation
| successor =
| hq_location_city = Fresno, CA
| hq_location_country =
| area_served =
| key_people =
| products =
| owner =
| num_employees =
| num_employees_year =
| parent =
| website = {{webarchive |url=https://web.archive.org/web/20230531195346/https://bitwiseindustries.com/ |date=31 May 2023 |title=bitwiseindustries.com}}
}}
Bitwise Industries was an American company focused on computer programming instruction, technology sales, and real estate operations. Founded in 2013 by Irma Olguin Jr. and Jake Soberal in Fresno, the company grew to have campuses in additional cities before furloughing its workforce and terminating the co-CEOs in June 2023.{{cite news |last=Sheehan|first=Tim|title=Valley's in a computer fix|url=https://www.newspapers.com/article/the-fresno-bee/125680826/ |newspaper=The Fresno Bee |date=July 28, 2013 |page=C3 |via=Newspapers.com |access-date=June 1, 2023 |quote=Bitwise launched this month in an 8000 square foot building that CEO Soberal intends to be a technology hub for 10 small technology companies. In addition to each company having its own leased office space, there are shared workspaces that Soberal hopes will foster an atmosphere of collaboration and ingenuity.}}{{cite news |last=Hubbard |first=Les |date=May 31, 2023 |title=Dyer chides Bitwise for lack of furlough notice, failure to pay taxes |url=https://sjvsun.com/business/dyer-chides-bitwise-for-lack-of-furlough-notice-failure-to-pay-taxes/ |work=San Joaquin Valley Sun |access-date=June 1, 2023}} In December 2024, Olguin and Soberal pled guilty to wire fraud and wire fraud conspiracy, agreed to pay $115 million in restitution to investors, and were sentenced to 9 and 11 years respectively in federal prison.{{ r | KVPR_2024-12-17 }}
History
=Early history=
Fresno-based lawyer Jake Soberal worked with technology designer and instructor Irma Olguin Jr. to found Geekwise Academy in 2012, a coding boot camp organization focused on serving the underprivileged community. This boot camp grew into Bitwise Industries, officially founded in July 2013, when it purchased an {{convert|8000|sqft|abbr=on}} building in downtown Fresno and leased out workspaces to small technology companies. The internal software development team was named Shift3 Technologies.{{cite news |last=Umoh |first=Ruth |date=June 26, 2020 |title=From Recycling Bottles for Cash to Tech CEO |url=https://www.forbes.com/sites/ruthumoh/2020/06/26/from-recycling-bottles-for-cash-to-tech-ceo-meet-the-latinx-founder-building-a-100-million-tech-hub-in-californias-gritty-central-valley/?sh=256ab8ca1b4b |url-status=live |work=Forbes |archive-url=https://web.archive.org/web/20200718051410/https://www.forbes.com/sites/ruthumoh/2020/06/26/from-recycling-bottles-for-cash-to-tech-ceo-meet-the-latinx-founder-building-a-100-million-tech-hub-in-californias-gritty-central-valley/#753811291b4b |archive-date=July 18, 2020 |access-date=June 1, 2023}}{{cite news |last=Fallows |first=James |date=March 14, 2015 |title=California's Centers of Technology: Bay Area, L.A., San Diego, and...Fresno? |url=https://www.theatlantic.com/national/archive/2015/03/californias-centers-of-technology-bay-area-la-san-diego-and-fresno/387808/ |url-status=live |work=The Atlantic |archive-url=https://web.archive.org/web/20150317020639/https://www.theatlantic.com/national/archive/2015/03/californias-centers-of-technology-bay-area-la-san-diego-and-fresno/387808/ |archive-date=March 17, 2015 |access-date=June 1, 2023}}
The company continued to grow, eventually purchasing a {{convert|50000|sqft|abbr=on}} building, also in downtown Fresno, that had been empty for many years. The building had previously been a car dealership. Bitwise renovated the building to have three floors of office space, a coffee shop and a 160-seat theater and named it Bitwise South Stadium. The building opened in 2015.{{cite news |last=Fallows |first=James |date=June 19, 2019 |title=Bitwise goes big |url=https://www.theatlantic.com/ideas/archive/2019/06/bitwise-goes-big/622179/ |url-status=live |work=The Atlantic |archive-url=https://web.archive.org/web/20230215213153/https://www.theatlantic.com/ideas/archive/2019/06/bitwise-goes-big/622179/ |archive-date=February 15, 2023 |access-date=June 1, 2023}}{{Cite episode |title=Fresno moves beyond Bitwise |url=https://the1a.org/segments/1a-remaking-america-fresno-moves-beyond-bitwise/ |access-date=January 29, 2024 |series=1A Remaking America |first=Anna |last=Casey |station=WAMU |date=November 30, 2023}}
=2019 to 2024; Expansion and eventual liquidation=
In June 2019, Bitwise received $27 million in Series A round funding to create campuses in other cities. Oakland-based Kapor Capital provided the expansion funding.{{cite news |last=Dishman |first=Lydia |date=February 24, 2021 |title=Bitwise Industries announces $50 million investment to grow tech apprenticeship program |url=https://www.fastcompany.com/90607590/a-50-million-investment-will-help-bitwise-industries-close-the-wealth-gap-for-communities-of-color |work=Fast Company |access-date=June 1, 2023}} In 2022, the company announced the cities in which it sought to expand, starting with renovating the Old Central Post Office in downtown Toledo, Ohio. It also began renovations in a {{convert|32000|sqft|abbr=on}} building at on Buffalo’s East Side and in the Sotoa Building in El Paso, Texas. After the expansion, it projected to have operations in ten cities in the US.
Cash flow problems and legal issues caused Bitwise to furlough all 900 employees on May 31, 2023. On June 2, 2023, the board of directors terminated co-CEOs Irma Olguin Jr. and Jake Soberal and installed Ollen Douglass as interim president.{{cite news |last=Stone |first=Reid |date=May 30, 2023 |title=Where is Bitwise Industries making its money? Internal docs shed light on business. |url=https://sjvsun.com/business/where-is-bitwise-industries-making-its-money-internal-docs-shed-light-on-business/ |work=San Joaquin Valley Sun |access-date=June 1, 2023}}{{ r | LAT_2023-06-14}} On June 29, Bitwise entered Chapter 7 liquidation and began winding down all assets.{{Cite web|url=https://gvwire.com/2023/06/29/bitwise-files-for-bankruptcy-in-delaware-federal-court/?amp=1|title=Bitwise files for bankruptcy in Delaware federal court|date=June 29, 2023|access-date=June 29, 2023|website=GV Wire|language=en}}
A lawsuit, filed on May 31, 2023, alleged that Bitwise improperly sought out loans and was unauthorized in listing properties for sale. It was filed by a Texas company that financed five Bitwise real estate acquisitions. The city of Fresno alleged that Bitwise has failed to pay taxes for two years.{{cite news |last=Stone |first=Reid |date=May 31, 2023 |title=Investor sues Bitwise alleging unauthorized sale of properties, loans |url=https://sjvsun.com/business/investor-sues-bitwise-alleging-unauthorized-sale-of-properties-loans/ |work=San Joaquin Valley Sun |access-date=June 1, 2023}}{{cite news |last=Gligich |first=Daniel |date=May 24, 2023 |title=Is Bitwise's boom over? Tax issues, money moves prompt questions. |url=https://sjvsun.com/business/is-bitwises-boom-over-tax-issues-money-moves-prompt-questions/ |work=San Joaquin Valley Sun |access-date=June 1, 2023}} Reports later surfaced that Soberal misrepresented a pending large investment from Goldman Sachs in exchange for hard money loans. Former employees explored a class-action lawsuit for labor law violations.{{cite news |last=Tavlian |first=Alex |date=June 5, 2023 |title=Bitwise Industries hooked lenders with word of a pending Goldman Sachs deal. It wasn't real. |url=https://sjvsun.com/business/bitwise-industries-hooked-lenders-with-word-of-a-pending-goldman-sachs-deal-it-wasnt-real/ |work=San Joaquin Valley Sun |access-date=June 5, 2023}}{{cite news |last=Ding |first=Jaime |date=June 14, 2023 |title=Bounced paychecks, frozen 401(k)s — How Fresno's 'shining star' let down the people it aimed to serve |url=https://www.latimes.com/business/story/2023-06-14/what-happened-bitwise-industries-fresno-business-failure |url-status=live |newspaper=LA Times |archive-url=https://archive.today/20230614165848/https://www.latimes.com/business/story/2023-06-14/what-happened-bitwise-industries-fresno-business-failure |archive-date=June 14, 2023 |access-date=June 14, 2023}}
On November 9, 2023, the U.S. Attorney's Office for the Eastern District of California announced federal wire fraud charges against Olguin and Soberal, citing $100 million in fraudulently obtained funds.{{Cite web |date=November 9, 2023 |title=Eastern District of California {{!}} Bitwise Founders Irma Olguin, Jr. and Jake Soberal Charged for $100 Million Fraud Scheme |url=https://www.justice.gov/usao-edca/pr/bitwise-founders-irma-olguin-jr-and-jake-soberal-charged-100-million-fraud-scheme |access-date=November 9, 2023 |publisher=United States Department of Justice |website=justice.gov |language=en}} In July 2024, Olguin and Soberal changed their pleas to guilty of wire fraud and wire fraud conspiracy and agreed to pay $115 million in restitution. In December 2024, a judge sentenced Soberal to 11 years in prison and Olguin to 9 years{{Cite web |date=2024-12-17 |title=Bitwise Industries co-founders sentenced to prison |url=https://www.kvpr.org/business-economy/2024-12-17/bitwise-industries-co-founders-sentenced-to-prison |access-date=2024-12-23 |website=KVPR {{!}} Valley Public Radio |language=en | quote=While tech was at the heart of what Bitwise promised and promoted, its unraveling revealed that the business hinged primarily on workforce training, consulting and real estate. The company tried to place itself in underserved communities and attracted people from marginalized backgrounds. Prosecutors say much of the money Bitwise received went toward payroll, outfitting office spaces, inflated CEO salaries, and repaying debts owed to prior investors and lenders.}}
References
{{reflist|30em}}
Category:2013 establishments in California
Category:2023 disestablishments in California
Category:Companies that filed for Chapter 7 bankruptcy in 2023
Category:Companies that have filed for Chapter 7 bankruptcy
Category:Technology companies based in California
Category:Companies based in Fresno, California