Keeping pace with another online lender, Prodigy Finance has secured $1bn in debt financing.
The student lending specialist has raised the money over the last 12 months from investors including Deutsche Bank, Goldman Sachs, M&G Investments and Sumitomo Mitsui Banking Corporation. While most of the funds ($900m) came from these institutional investors, schools, family offices and high net worth individuals also participated through the medium of bonds distributed by Credit Suisse.
Prodigy’s game is funding international students through some of the world’s top universities and business schools, with a particular focus on students from emerging markets, where financing options are limited. It underwrites loans by looking at a range of variables, including projected earnings and university acceptance, rather than solely focusing on historical credit.
“Our global credit model has allowed us to help international students with limited or no funding options to gain access to life-changing opportunities and become the next generation of leaders around the world,” said Prodigy’s founder and CEO Cameron Stevens.
Prodigy has identified engineering as a key growth sector, especially among students from Brazil, Russia, India and China. It points out that in 2016/17, the US hosted 1.078 million international students, with engineering the most popular field of study at 230,711 students, versus 200,754 studying business and management. Prodigy says engineering students tend to be younger, with less professional experience, lower savings and hence a greater need for financing.
With the $1bn bagged, Prodigy will increase its activities in the field of engineering. It currently supports 245 specific engineering schools and 2,222 courses, including electrical and computer engineering, data analytics, information systems industrial, chemical and nuclear engineering.
The fundraising has also allowed Prodigy to launch a refinancing product for international graduates from US schools.
To date, Prodigy has funded over 11,200 students from 132 countries, lending over $538m.