StudentFinance, a European fintech that funds educational programs for individuals through so-called income sharing contracts, has raised €39 million ($41 million) in its Series A round.
Founded in Spain in 2019, StudentFinance partnered with educational institutions such as Ironhack and Le Wagon to fund people looking to upskill in areas such as software development, cybersecurity and artificial intelligence, replacing traditional banking. or act as an alternative to student loans.
The company says it has developed an AI model to discover the most in-demand skills across the sector and map this to the most appropriate education providers to fill that gap.
“We monitor and track publicly available job posting data to show trends and fluctuations in labor demand.” StudentFinance co-founder and CEO Mariano Kostelec explained to TechCrunch. “We also use data that analyzes systemic and market changes, such as government incentives for businesses to become ‘greener’. This gives us data on future growth, or declining sectors. ”
in addition, Kostelec also Track salary data that can indicate demand for specific skills.
“We use this data to predict future job market demand for specific skills and develop machine learning models to predict future income levels.” Kosterek continued. “This is an area where we will continue to invest more and more. ”
that’s right, Kostelec said it plans to use the new funding to expand its internal data and AI capabilities through strategic hiring to better predict job market demand.
From a student’s perspective, an income sharing agreement means that graduates pay tuition fees only when their salary reaches a set threshold, after which a portion of their monthly income is transferred to their income. reimburse StudentFinance in set installments that vary based on If they don’t get a job, they don’t pay back anything, but they are still responsible for paying it back, even if it’s not related to the course at all, but if they get some sort of job that reaches the income threshold.
In addition to repaying the interest earned from each student, StudentFinance’s revenue streams include fees charged to course providers for each student who begins a course.
StudentFinance co-founders Marta Palmeiro (CFO) and Mariano Kostelec (CEO) image credit: student finance
fourth industrial revolution
The funding will be used by the World Economic Forum (WEF) to support the so-called Fourth Industrial Revolution, which will bring about rapid social change through technologies such as AI and automation. It is done when you expect it to be. That’s why a number of his VC-backed student funding platforms similar to StudentFinance have emerged, including his San Francisco-based YC alum’s Blair, New York’s Leif, and Arlington’s Vemo Education.
StudentFinance aims to do the same, but with a focus on the European market. The platform and funding are currently available in Spain, Portugal and the UK, but we have partnered with educational providers in Germany and Finland to bring the platform to his SaaS base, with the institution itself organizing the funding. Later this year, StudentFinance has already obtained regulatory approval from the German financial regulator (BaFin) and plans to expand its full service to Germany.
“The demand for upskilling employees has never been higher,” says Kostelec. “We are on a mission to close this gap across Europe. It aims to expand its reach to build the workforce of the future, especially in areas such as technology, AI and climate change. ”
So far, StudentFinance has raised $5.3 million in a seed round almost two years ago, and the new $41 million infusion of cash will help the Spanish startup reduce both financing capital and operating costs. Recruitment ambitions as well as support.
In addition, the Madrid-based company is also preparing to launch alternative repayment options, such as fixed installment payments with monthly amounts not directly related to student income.
The Series A round consists of a combination of equity and debt, but the company declined to disclose the split. He said 70% of the round’s “financing capacity” would go to Spain and Germany, with the remaining amount going to the UK, which soft-launched last year.
The equity component was led by Iberis Capital, with participation from Armilar Venture Partners, Mustard Seed Maze, Giant Ventures, Seedcamp, Monzo founder Tom Blomfield and former UK MP Ed Vaizey. The liability component was provided by French asset manager SmartLenders Asset Management.
