Washington DC-headquartered lending platform Mpower Financing has raised $25 million in its equity funding round led by Tilden Park Capital Management, a New York-based investment management firm.
Mpower Financing helps students who are looking to study abroad get education loans to attend universities in countries like the United States and Canada. The platform does not process loans in the country of origin for the student, rather booking the loan in the country where the university is located. This helps students build a credit history in that country and also makes it easier for them to repay the loan once they get a job there.
This round comes on the back of a $9 million funding the company had received last year where investors like Breega, Potencia Ventures, AI8, Cometa, Zephyr-Peacock, 1776, Fresco Capital, 1994 LLC, and Goal Structured Solutions participated.
“We will be able to invest the newly raised funds to boost our technology play, hire staff across our offices in Washington DC and India, further it will also help us scale up our platform to cater to the growing demand for credit from us,” said Manu Smadja, chief executive officer, Mpower Financing.
The company plans to scale up its office in Bengaluru to almost 100 employees from around 30 currently.
“Bengaluru continues to be our core office, since we get more than 20% of our students from India and almost 50% from Asia,” he added.
As regards COVID-19, the company had initially faced a setback since international travel got restricted and students could not start their classes on the campus. However, Smadja said that since then there has been some increase in demand for student loans since other lenders have become credit wary.
On the repayment front, given that big tech companies have continued to hire new staff, students who typically passed out of these universities managed to find jobs and have continued to repay their loans. The company claims to have less than 1% in stressed assets.