Leap Finance, which has a 25-member team, plans to deploy the cash raised to aggressively hire for its technology and capital markets teams in Bangalore and San Francisco, respectively.
Leap is an online platform that offers students planning graduate studies in the United States loans without any collateral at interest rates starting as low as 8%.
The company’s underwriting is based on a student’s future income, in a departure from the standard model where most lending is based on assets or current cash flow, which leads to systemic inefficiencies.
“Indian students make up for 25% of a class in many top graduate programs in the US…Yet, the education loans they avail of are at interest rates twice as high as their American peers, which we aim to bring down,” said Vaibhav Singh, co-founder, Leap Finance.
The Bengaluru-based company currently supports more than 150 US schools and is looking to finance 1,000 students this year.
“We want to be backers of the next generation of promising students, irrespective of their family background or means,” said Arnav Kumar, co-founder, Leap Finance. “A competitive financing product is the first offering and sets the base for our larger vision to become a cross-border neobank,” he added.
Singh, who has spent more than a decade at financial services companies, including Deutsche Bank across the Asia Pacific, Capital Float and InCred, and Kumar — who started his career in derivatives structuring with Deutsche Bank — founded the company in 2019.
Kumar is a second-time entrepreneur who co-founded GoZoomo, a used car marketplace, who later went on to work with SAIF Partners before starting up Leap.
Students from countries such as India, China, Brazil, and Indonesia are increasingly pursuing specialized education in developed markets like the US, Canada, Australia, and Europe.
In 2019, five million students pursued higher education outside their home countries, spending $150 billion annually, according to UNSECO data.
“This attractiveness of the market, strong founder-market fit, and Leap’s mission-driven team is what led to our belief in an early partnership with them,” said Ashish Agrawal, Principal, Sequoia Capital India.