[Funding alert] Fintech startup Leap Finance raises $5.5M led by Sequoia India
San Francisco and Bengaluru-based fintech startuprecently said that it has raised $5.5 million in a round led by Sequoia India. The round also saw participation from leading angels including - Bhupinder Singh, Founder and CEO, , as well as Kunal Shah, Founder and CEO, , among others.
Co-founded by IIT Kharagpur alumni Vaibhav Singh and Arnav Kumar, Leap Finance offers education loans to students based on the students’ future income. According to the startup, its engine takes into account several alternatives and derived data points to predict future income potential.
Speaking on the problem the startup is solving, Vaibhav Singh, Co-founder of Leap Finance, said,
“Indian students make up for 25 percent of a class in many top graduate programmes in the US. These are smart, hard-working students who got in the best programmes and have a great future ahead. Yet, the education loans they avail of are at interest rates twice as high as their American peers. This disparity stems from systemic inefficiencies and lack of innovation.”
To counter this, he added, Leap Finance has innovated on multiple dimensions - technology, financial structuring, and risk - to bring down the interest rate and improve customer experience.
Speaking on the investment, Ashish Agrawal, Principal, Sequoia Capital India LLP, said,
“Indian students studying abroad today spend $15 billion annually and we estimate an annual credit need for more than $5 billion against this. This attractiveness of the market, strong founder-market fit, and Leap’s mission-driven team are what led to our belief in an early partnership with them.”
The fintech startup claims to offer loans to students who are starting graduate studies in the US in the upcoming fall season (2020), at interest rates starting as low as 8 percent. According to the startup, its loans offer full study cost coverage and require no collateral.
“Indian students are increasingly pursuing the best global education and global careers. Many of our most inspiring leaders - from Satya Nadella to Sundar Pichai, have walked this path. We want to be backers of the next generation of promising students, irrespective of their family background or means. A competitive financing product is the first offering and sets the base for our larger vision to become a cross-border neobank,” said Arnav Kumar, Co-founder, Leap Finance.
Currently, Leap supports more than 150 US schools and is looking to finance 1000 students in the upcoming fall season. Further, the startup today has a 25-member strong team.
(Edited by Suman Singh)