In less than two years, MIT-born startup peerTransfer has gone from working with 12 schools to more than 350, and that number is only expected to skyrocket following Tuesday’s announcement. The international tuition payment platform has raised $6.4 million from QED Investors, as well as Fides and Kibo Ventures, both based in Madrid, Spain. Existing investors also participated in the round, including Spark Capital and Maveron.
The newfound funds will be used to fuel peerTransfer’s global growth and help the company support new product efforts, so they can continue to transform the international payments space.
“We seeded it when it was literally a one-person company,” says Alex Finkelstein, a general partner at Spark Capital, referencing the $1.1 million peerTransfer secured in October 2010. “Now, they are closing about 20 schools a month, which is almost unheard of in the education world.”
Following their seed round, peerTransfer went on to raise a $7.5 million Series A in August 2011, also led by Spark Capital and Maveron, as well as Accel Partners and Boston Seed Capital.
Finkelstein describes the new product development as “a surprise,” acknowledging that when Spark initially made the investment the focus was solely on enabling students and schools to transfer money between international bank accounts in a way that was more convenient and cost effective.
“It just made sense,” Finkelstein says, referring to the core of the company. “The banks are ripping students off. With us, students are saving $1,000 a year.”
Through peerTransfer, international students receive better currency exchange rates, and are able to cover the costs of tuition and fees using their home currency. Schools are also given the opportunity to automate the reconciling process, and eliminate unidentified, missing or short balance international payments.
“It’s kind of simple,” Finkelstein says, “but both sides of the equation make sense.”
peerTransfer’s partner institutions already span the globe—the company has processed payments from more than 190 countries. MIT, Boston College, Tufts, Suffolk, Emerson and UMass Amherst have all signed on locally, and within the last year, peerTransfer has more than doubled their partnerships.
“The company has demonstrated impressive results during the last two and a half years,” said Nigel Morris, managing partner at QED Investor, in a statement. “We are confident that peerTransfer is well positioned to lead the international payments space for education and beyond.”
