Washington-based education loans company MPower Financing has reportedly raised $100 Mn debt funding from Goldman Sachs. The funds will be used for expanding the company’s reach to include more students looking for educational opportunities in the US and Canada, according to a media report.
“This will be used to fund our loans portfolio. The long-term goal is to significantly increase our performance in India,” Ashwini Kumar, head of India operations at MPower Financing, reportedly said.
Founded in 2014 by Manu Smadja and Mike Davis, the company works with investors and universities to lend to high-potential students. In addition to providing students with access to the financial resources necessary to attend and complete college, MPOWER builds students’ credit histories, provides them with personal finance education, and offers gateway financial products as well.
With MPower’s platform, Indian students can reportedly avail loans without the need of guarantees, co-signers, or collateral and can make only small touch payments until graduation. Students can also pay for tuition and other services such as housing, meal plans, or health insurance from the assigned loan.
According to the report which cited Ashwini, India makes for 25% of the MPower’s lending books. The company is said to be currently expanding its marketing team and exploring strategic partnerships. MPower Financing claims to be working with over 350 universities and colleges across the US and Canada to offer education loans to students in over 200 countries.
In 2018, the company has also raised another $110 Mn from Community Investment Management and Gray Matter Capital. Other investors in the company include PE fund Zephyr Peacock, University Ventures, 1776 Ventures, Goal Structured Solutions, VilCap Investments, and Fresco Capital.
Digital Lending In India
A BCG report has predicted the digital lending industry to touch $1 Tn mark in the next five years. Some notable players in the Indian digital lending sector include Propelled, Lendingkart, PerkFinance, Avail Finance, Aye Finance and more.
Last month, an Indian education loans focused startup, Propelld has raised $2 Mn from Stellaris Venture Partners and India Quotient. Indian Angel Network and TaxiForSure’s Raghunandan G, and Livspace founder Ramakant Sharma had also participated in the round.
In the same month, another B2B lending company Indifi Technologies has also raised INR 145 Cr ($21 Mn) in its Series C funding round, led by the CDC Group.