Prodigy Finance, a fintech startup that provides online funding for students embarking on postgraduate courses at top institutions such as Cambridge and Harvard, has landed multi-millions of pounds in fresh funding from leading investors.
Index Ventures has led a series C equity round of $40m, with previous investor Balderton Capital also participating and AlphaCode also joining them, in addition to $200m in debt financing.
Shortlisted for explosive growth company of the year at the City A.M. awards in 2016, the 10-year-old startup has provided $325m to more than 7,000 students in that time.
It provides finance to international students who are often overlooked for loans by traditional banks, using technology to ensure a repayment rate of 99 per cent. Alumni from top schools are matched with students from their home country or alma mater and earn a financial return but the new debt financing cash will now go towards loan capital too.
“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 founder and chief executive Cameron Stevens, adding that the cash will provide it with additional scale to fulfil huge demand.
“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.”
The startup will focus on expanding in the US, with the country now accounting for 50 per cent of the market, picking up pace since entering the market just two years ago. Asia will also be a focus, with China now accounting for eight per cent of the international student market. That expansion will include growing its 115 staff across technology, engineering and business development.
Around 25 per cent of students at the Insead Business School, one of the best MBA programmes in the world, are funded through loans from Prodigy Finance.
“Every decade, the number of international students doubles and our hope is that Prodigy Finance will help accelerate that growth. Our planet sorely needs more educated citizens of the world,” said Index Ventures partner Neil Rimmer.
The number of international students is set to reach eight million by 2025, figures from the OECD suggest.