International student loan platform Prodigy Finance has raised $240m to help fulfil its growth ambitions and delve further into the development of new products for international students.
The investment comes as a $40m injection of Series C funding, along with a $200m debt facility from one of the world’s largest international banks.
The US will be the company’s primary focus for growth after this injection of funds, according to Ricardo Fernandez, head of business development at Prodigy Finance.
“It’s a first step forward to get the big trust and credibility from global banks that our business is solid”
“The number of international students who go to study abroad in the US and the high tuition in the US just indicates a huge growth,” he told The PIE News. “So it’s where we need to focus our attention to.”
The company is also planning to direct a lot of its efforts into further developing the technology side of the platform, to scale, grow and launch new products and services, said Fernandez.
“We’re piloting our refinancing product and the next step is credit cards and many other products that make sense for international students,” he said.
The $40m funding was led by venture capital firm Index Ventures, with participation from UK-based Balderton Capital and Africa-based AlphaCode, which focuses on fintech entrepreneurship.
Meanwhile, the $200m debt facility from a leading bank was a “natural step” for Prodigy Finance in how it raises funds.
“It’s basically a new source of funding which is great because it’s a first step forward to get the big trust and credibility from global banks that our business is solid,” said Fernandez.
Prodigy Finance, which was established in 2007, provides student loans to those who wish to undertake postgraduate study overseas at the world’s top universities.
“How do we unlock that tier of individuals that actually need the funding”
Over three quarters (78%) of the students who receive Prodigy Finance loans come from emerging markets.
India remains the platform’s top source market for international students, according to Fernandez, followed by Brazil and China. And the latter is where the company sets its sights on expansion in the near future.
In China, students tend to borrow less as they’re normally more wealthy individuals who study abroad, said Fernandez.
“But there’s this huge layer that if they had the access to funding they could,” he said.
“So our objective [is] how do we unlock that tier of individuals that actually need the funding.”
Since its inception, Prodigy Finance has lent around $325m to over 7,100 students. By the end of next year, the company expects to lend to around 20,000 students.
