Downtown DC Fintech MPower financing said this week that it had raised a $100 million funding round to increase its presence in the international student loan market. The company also secured an additional $52.5 million in unrestricted corporate debt, which will be used for operational purposes, the CEO said. Manu Smadja says Technical.ly.
Tilden Park and King Street Capital Investment were the top two investors in the round, with additional funding of Pennington Partners and Capital Institute.
This is the second investment increase for the company this year. Funding comes next a fundraising of 30 million dollars carried out by MPower in March, when the company secured an additional $5 million on top of the $25 million raised in January. MPower, an international lender and DACA students, has also doubled its workforce to 80 team members since the start of the year.
According to Smadja, the funds will be used to further develop the team, especially at its Bangalore location. The company will also continue to develop its loan portfolio. MPower, Smadja said, will also buy a percentage of its own assets and invest in marketing to continue the company’s growth in the industry.
“What we’re investing in beyond that is continually improving the digital experience, anticipating where we can extract information about a student so that we make their application work faster and more seamlessly, and trying to figure out how we can add value through data,” Smadja told Technical.ly.
Even with COVID damaging many students’ sources of income and stopping travel altogether, Smadja said MPower remained strong in 2020 which is why he was able to get such a big turn. With many international students unable to return to their families during breaks, losing jobs on campus, or needing temporary housing, MPower’s digital loans provided access to loan assistance or emergency funding .
With COVID, the company has reached a “point of proof” that has amplified student outcomes, even under financial stress, Smadja said.
“What it’s allowed us to do is it’s given us access to a much wider range of investors,” he said. “We were able to prove that our borrowers not only performed well during good economic times, but they performed better than US citizens in terms of repayment. But also during times of stress, they were more stable than US citizens. »
With this increase, MPower hopes to help 5,000 students with loans in 2021. But Smadja said the company still has a long way to go, which is why it is investing heavily in marketing and awareness. It is also taking strong steps to invest in technology, facing competition from lenders and physical resources to make a name for itself in the student loan space.
“We find again that we represent a very, very small fraction of the overall market. We represent 0.3% of available international student loan opportunities,” Smadja said. “So we could multiply by 10 and only represent 3% of the market. This market is growing rapidly and this market, as I define it today, is quite narrow. So we have a long way to go.