Prodigy Finance raises $240m to help students in developing countries
One of the largest funding rounds by a UK company in 2017, 10-year-old Prodigy will use the funds to increase its operational expansion
A London-based fintech, which helps international students with no access to finance study, has bagged one of the biggest funding rounds of 2017.
Prodigy Finance has raised $240m, which includes a $40m Series C equity round led by Index Ventures, with participation from Balderton Capital and AlphaCode; and a $200m debt facility led by an unnamed global investment bank.
Helping students in developing regions, who traditionally have no access to financial institutions or alternative forms of finance, Prodigy’s global credit model assesses applicants based on projected earnings rather than historical credit.
This allows the business to then provide funding to students without collateral – and also enables qualified investors, and the alumni of top schools, to assist students from their alma mater or home country, while earning a financial return.
This latest injection of cash will help Prodigy increase its operational expansion and provide additional funding for students taking postgraduate degrees in business, engineering, law and public policy at the world’s top 100 universities including INSEAD, London Business School, Cambridge Judge Business School, Stanford University and Harvard University.
Now over 10 years’ old, Prodigy was founded in 2006 by Cameron Stevens and has provided more than $325m in funding to over 7,100 students, 78% of whom come from emerging markets.
To date, more than 80% of its borrowers have had no alternative access to financing.
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“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. 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.
“International students play a key role in the graduate school ecosystem by contributing to revenue and improving the institution’s overall diversity; a determining factor when it comes to league tables and global rankings.
“We saw a market failure in international lending and have spent the last decade rectifying this problem. We’re excited about this investment as it will allow us to continue to grow and ensure there are no barriers to achieving academic potential.”
Neil Rimer, partner at Index Ventures, said:
“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. 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.
“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.”