Education loan provider Eduvanz has raised INR 100 Cr in a Series B round led by JuvoVentures, Sequoia Capital and Unitus Ventures, among others.
Prior to this round, the startup raised $10 Mn in debt funding from multiple financial institutions including InCred Financial Services, Vivriti Capital, and Northern Arc Capital in February, 2021. It also raised $5 Mn in its Series A round from Sequoia Capital India and Unitus Ventures in August 2020.
The company will also use this funding to expand its offerings, to develop a stronger information technology (IT) infrastructure as well as enhance its artificial intelligence (AI) and machine learning (ML) capabilities for risk assessments before giving out an education loan.
Founded in 2016 by Varun Chopra and Raheel Shah, Eduvanz is a digital finance company that provides education loans starting from zero interest for students and skill seekers.
Eduvanz is one of the few fintech lenders that are looking at solving the credit crunch in a particular vertical. The startup works with students and institutions to enable EMI-based loans under a ‘study now-pay-later’ model. It works across the K-12, test prep, and upskilling segments as well as with higher education students.
Through the Eduvanz platform, loans are facilitated through a point of sales payment solution that institutes integrate within their enrollment system. This enables on-premise instant financing for students and parents.
So far, Eduvanz claims to have disbursed loans worth more than INR 500 Cr to over 30,000 learners. It now aims to disburse another INR 1,000 Cr in loan across all the lending products in 2022.
Besides Eduvanz, India’s education fintech segment has seen very limited development. There are startups such as Bengaluru-based Leap Finance, but that is solely focussed on higher education abroad. Incidentally, Leap Finance is also backed by Sequoia Capital.
In November 2020, Eduvanz acquired edtech startup Klarity, an online one-on-one networking and mentoring platform. The acquisition was expected to help Eduvanz expand its reach to a network of industry mentors and more than 300 educational institutes. Klarity is said to have enabled over 5,000 career counselling sessions via one-on-one mentoring. With this, the startup is also looking to venture beyond education finance and into career and academic counselling.
With over 33 Lakh Indian students going overseas to study every year, India is the second-largest source of international students after China. According to the Reserve Bank of India (RBI), tuition and hostel fees by Indian students studying abroad had increased by 44% from $1.9 Bn in 2013-14 to $2.8 Bn in 2017-18.
The spending and the prevalence of international universities are expected even more in the future, overcoming the current pandemic blues. Though loans come as a handy option for an average middle-class Indian student, it had shrunk by 25% between 2015 and 2019.