D.C. student loan startup MPower Financing has raised $9 million in fresh funding, the company said Tuesday.
The capital comes from several investors including Breega Capital, Potencia Ventures, AI8, Cometa, Zephyr-Peacock, 1776, Fresco Capital, 1994 LLC and Goal Structured Solutions.
The raise builds on about $20.5 million raised to date, including $10 million in 2018 and $6 million two years prior. It also received a $100 million credit facility in 2018 from Community Investment Management. That enabled MPower to provide student loans in the U.S. after focusing primarily on the international market since its founding in 2014.
The new funding will support MPower’s expansion, including a new program for international student loan refinancing, the company said.
The company’s work is “more relevant today than ever before,” said MPower co-founder and CEO Manu Smadja in a statement. That’s because Covid-19 has “has increased the need for tight international cooperation and knowledge-sharing,” and because North American universities are now relying more heavily on online education as well as on-campus learning, hybrid models that “have the potential to reduce overall education costs, in turn making university accessible to a greater number of students worldwide,” he said.
“Given international students are essential to universities’ financial health, and many more students would come if tuition was more accessible, this is a huge opportunity,” Smadja said. “I’m very grateful for investors' support. MPower is honored to play a small part in enabling international education at such a critical time in history.”
MPower is pushing a new type of lending system, based on its return on investment — or, in other words, the borrower’s future salary. That ROI model ties loan amount to the amount of money students expect to earn after college.
The fintech startup — which finances international students who come to the U.S. and Canada, as well as domestic students — now works with more than 350 colleges and universities to provide loans to students from more than 200 countries, amounting to about $2 billion in loan applications on its platform.
