P2P student lender raises £186m for US expansion
A PEER-TO-PEER student lender that shares backers with Funding Circle and Zopa has raised $240m (£186.2m) to expand in the US.
Prodigy Finance announced on Monday that it has raised $40m from an equity funding round, led by venture capital firm Index Ventures, with participation from existing investor Balderton Capital and AlphaCode.
The London-based fintech start-up also said it has secured a $200m debt facility led by a global investment bank.
Prodigy Finance provides postgraduate loans to international students, so that they can undertake business, engineering, law and public policy courses at top universities including London Business School and Harvard University.
The loans are collectively funded by a community of alumni, institutional investors and qualified private investors.
The firm is looking to increase its US footprint, where international students contributed $32.8bn and 400,000 jobs to the US economy during the 2015-2016 academic year, it said.
Since its launch 10 years ago, the company has provided more than $325m in funding to over 7,100 students, 78 per cent of whom come from emerging markets.
The platform counts Betfair’s Ed Wray and Balderton Capital among its equity backers, who have also supported P2P heavyweights Funding Circle and Zopa respectively.
“Students from emerging economies such as China, Brazil and India face challenges in accessing financing for education, even with high credentials and excellent credit quality,” said Cameron Stevens, founder and chief executive of Prodigy Finance.
“This investment will help us double the size of our student portfolio. We believe in financial inclusion and talent mobility, and look forward to continuing to help international students break the funding barrier and further their education at a top international university.”
“Prodigy Finance is opening the doors of the world’s top universities to students who were previously shut out, because they couldn’t fund their education,” said Neil Rimer, partner at Index Ventures.
“Prodigy Finance is an example of an entrepreneurial financial services company using an innovative model to offer something of great value that is not available from traditional lenders.”