Hundreds of thousands of teenagers and young adults get on flights each year from India to a foreign land to pursue higher education. Upon landing, they face myriad challenges. One big one: They don’t have a local credit history, so they can’t avail a range of financial services, including a loan or a credit card — at least not without paying a premium for it.
For banks and other financial institutions, there is an increased risk when they engage with foreigners, so they charge more. An Indian student studying in the U.S., for instance, borrows money at an interest rate of over 13%, nearly twice of what their local peers are charged.
Leap Finance, a two-and-a-half-year old startup with headquarters in San Francisco and Bangalore, is attempting to solve this problem — and many others. The startup, which sits at the intersection of fintech and edtech, grants loans to students at a fair interest rate by evaluating the data they generated — alternative and derived — in India itself.
But in recent years, Leap Finance has aggressively expanded its offerings to provide what it calls a broader infrastructure to enable students to pursue international higher education.
The startup is helping students with guidance on admission, visas, and test preparation. Leap has developed a community of over 1 million students where they advise each other and explore options. Leap Finance said it has helped over 60,000 students in their study abroad journey over the last 18 months — and just had its strongest fall season.
And as is common in the startup ecosystem, such growth is usually followed by strong interest from investors. Which brings us to the development the startup shared on Wednesday.
Leap Finance has announced it has raised $55 million in a new financing round led by Owl Ventures. The Series C round also saw participation from Harvard Management Company, more popularly known for being a high-profile LP to venture funds. Existing investors Sequoia Capital India and Jungle Ventures also participated in the round, which follows a Series B funding in March this year, and brings Leap Finance’s all-time raise to over $75 million.
Since we last spoke about Leap Finance, the startup has demonstrated strong growth on various fronts, said Arnav Kumar, co-founder of Leap Finance, in an interview with TechCrunch. Its community has grown, the test preparation app is increasingly becoming popular, and its core financial services has also surged, he said.
On top of this, the startup has expanded its offerings to help students with preparing for — and landing — internships when they do join a college abroad, solving another aspect in which they struggle.
Now with the new funding, the startup is planning to expand to serve international markets including Middle East and Southeast Asia and help the students pursue higher education in 20 nations, said Kumar, who previously worked as an associate vice president at venture fund Elevation Capital.
“Leap is on the trajectory to become the preeminent study abroad platform for students. The overseas education market is fragmented where there is no single one-stop solution,” said Amit Patel, Managing Director of Owl Ventures, in a statement.
“It can be very confusing for students to know where to begin preparation, what colleges they should target, and how they are going to afford to pay for their education. Leap is creating a comprehensive platform that addresses all of these preparation and financing needs for students. Owl Ventures is excited to deepen our partnership with Vaibhav, Arnav, and the Leap team to make studying abroad a reality for as many students as possible.”
This is a developing story. More to follow…