‘Study now, pay later’ is Mumbai-based startup Eduvanz’s USP for education loans
Despite the availability of learning tools at all levels today, what often constricts students, learners, and parents is the lack of easy, fast, and affordable financial assistance.
Enter Mumbai-based fintech startup Eduvanz, which offers innovative education loans that allow students to study now and pay later in pocket-friendly monthly instalments at zero percent rates.
Set up in 2016 by IIT Madras graduate Varun Chopra and IIM Ahmedabad alumnus Raheel Shah, Eduvanz offers flexible tenures, fast turnaround time, and full transparency on loan decisions for all learning requirements, be it K-12 (school), higher education, or professional development courses.
Problem statement and the solution
Around 2015-16, Varun and Raheel had set up their first startup, CurrEQlum, to impart life skills in classrooms across India using games, props, and analytics, when they discovered a problem: A majority of parents get inundated with pending school and tuition fees and often delay these payments due to unavailability of easy, fast, and accessible financial assistance.
“The problem is more acute in families looking to enrol their children for new programmes such as job-oriented vocational training courses, as well as coaching and test prep classes,” says Varun.
That banks are focused on larger ticket loans associated with higher education doesn’t help, he says.
“In addition, their standardized lending criteria tend to marginalize first-time borrowers and cash-earning families and do not recognize the thousands of training institutes and new-age online institutes across India. The problem is magnified across Tier I-III cities.”
In such situations, banks either decline the loan applications or charge very high interest rates, resulting in discontinued education, underutilized infrastructure, and lost opportunities.
“Based on our research, we realized the need to build a complete new lending entity — one that gets all stakeholders (parents, students, institutes, etc.) on the same platform and holds each stakeholder accountable for its role,” says Varun.
What came handy is the “strong network of parents, institutes, banks, schools, recruiters, and students” Varun and Raheel had built for their previous venture.
“We are solving for faster loan decisions, backed by transparent processes and student-centric policies,” says Varun. “In doing so, Eduvanz has innovated loan solutions for each stakeholder. Thus, learners can leverage fast, cheap, and flexible financial loans, while institutes get faster disbursals and increased enrolments.”
Apart from being co-founders, Varun is the CEO of Eduvanz and Raheel the chief business officer in charge of alliances and partnerships. They both have more than 15 years of experience across functions and roles including investment banking, consulting, and outsourcing industries.
The startup has 150 employees spread across India.
Designed for millennials
Eduvanz integrates with an institute’s technology platform to offer a seamless loan journey for learners. It offers loans customised to the requirements of the institute learners’ ecosystem and, depending upon the agreed loan product, makes upfront fee payments to the institute.
“For loan tenures of up to 24 months, we offer zero-cost loan solutions, which are very popular with parents and learners because it enables them to repay in easy and affordable EMIs (equated monthly instalments) without hurting their liquidity,” says Raheel.
The startup also offers convenience in that learners and institute counsellors/admission advisors can access the loan applications anywhere, anytime via the Eduvanz mobile app or web interface.
“We designed the loan journey keeping today’s millennial in mind — thus, a completely online, paperless, and fast journey,” says Raheel. “The loan application takes under five minutes on the Eduvanz mobile app, while the entire process from application to disbursal happens in just a few hours.”
Raheel adds that the startup has also invested in building its own proprietary artificial intelligence-based algorithms and predictive analytics to make loan decisions based on the future employability of learners.
In April 2019, Eduvanz raised $2 million in a pre-series A round from Unitus Ventures and the Michael & Susan Dell Foundation.
In August 2020, it raised $5 million as part of a Series A round led by Sequoia India, with participation from existing investor Unitus Ventures.
In November, the fintech platform acquired edtech startup Klarity, thus getting access to its network of industry mentors and more than 300 educational institutes.
“Klarity has impacted more than 5,000 careers via one-on-one mentoring,” says Varun. “The team can help Eduvanz users not only finance their courses, but also get help in choosing the right course.”
According to Varun, Eduvanz has witnessed 15X growth in monthly user numbers since inception. The startup claims to have financially empowered more than 15,000 learners across 20 states, 240-plus cities and covered over 25 skill industries.
Varun says the platform has partnered with more than 350 organisations so far, including Godrej, Dr. Reddy’s Foundation, ICICI Direct, McKinsey Social Initiative, SAP, and edtech tie-ups with the likes of upGrad, Unacademy and Great Learning.
Setting new goals
From being an alternative lender, Eduvanz aims to become the go-to financing solution for learners in all categories — K-12, upskilling/skilling, undergraduate and postgraduate courses, as well as test preparation, says Varun.
The startup is in the process of launching its first credit card for learners and students.
“The mission is to empower students to pursue the education of their choice and enable them to take informed decisions by providing access to affordable financial resources and unbiased advice,” adds Varun.
Edited by Lena Saha