Venture Capital and Private Equity Dominate LAUSD Contracts

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Executive Summary

The Los Angeles Unified School District (LAUSD) is the second-largest district in the United States, serving more than 440,000 students each year. The district has more than doubled its spending on outside vendors and contractors over the past decade. Despiteprojecting a deficit in the coming years and sending potential lay off notices to nearly 700 employees, the district continues to spend billions on contracts with private companies.

Using data obtained by the United Teachers Los Angeles (UTLA), this research brief examines LAUSD’s expenditures to venture capital and private equity-owned companies in two key categories: special education and digital instruction tools. In special education, outsourcing comes with costs incurred by districts that end up paying more than they would for in-house positions while students face high turnover rates and lack of oversight and accountability. With digital instruction, students are learning from expensive AI-powered tools that have little to no proven benefit and increase the risk of data privacy violations.

Key Report Findings

• Superintendent Carvalho has extensive connections with sales executives at companies that have won contracts with the district. Since Carvalho started in 2022, LAUSD has approved $10 billion in contracts with outside vendors.
• From January 2022 to June 2025, at least 86% of all LAUSD contract commitments with companies that sell digital instruction tools went to venture capital or private equity-backed companies. Of these companies, nearly 70% have been paid more than the original contract commitment amount.
• 72% ($1.6 billion) of all currently active technology contracts were authorized after Carvalho requested and was granted emergency authority to obtain no-bid contracts.
• Despite declining enrollment due to immigration sweeps in the county, LAUSD has signed contracts with venture capital and private equity firms that own tools used by the Department of Homeland Security and Immigration and Customs Enforcement.
• Several LAUSD contractors are owned by the same venture capital or private equity firm operating under different names. The ultimate beneficiaries of LAUSD contractors are billionaire executives of these firms.

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For more research on PE in education, refer to the following resources:

• Making the grade? Private equity, privatization and the future of American education
• Private Equity in Public Schools: Outsourcing in K-12 Education
• Spending More, Serving Less: The High Cost of Private Equity in Special Education