Mumbai-based fintech startup Eduvanz, an online education loan provider said Thursday it has raised USD 5 million in its Series A round led by Sequoia Capital India, with participation from its existing investor Unitus Ventures.
The latest round takes its total funding to around USD 6.7 million.
The fresh funding will be utilized to create new credit products, AI-based risk management, and easier collection tools to support borrowers. It will also use the money to increase the team strength to expand in tier 2 and 3 cities in the country.
The company received an NBFC (non-banking financial company) license from Reserve Bank of India in 2017 that allows it to offer financial products and services to customers.
Founded in 2016 by Varun Chopra and Raheel Shah, Eduvanz provides loans in collaboration with educational institutes via its app that lets users apply for a loan, receive updates on approval, as well as can be used for repayment of the loan. The company said, students now expect a smoother and faster lending experience and don’t want to make multiple visits to banks.
“By combining innovative student-centric loan solutions, robust risk-assessment with cutting edge digital lending technology, Eduvanz is enabling higher enrollment for learners across colleges, universities, certification partners, institutes, and schools,” Chopra, CEO, Eduvanz, said in a statement.
It has partnered with more than 300 educational institutes to identify students looking for a loan and claims to have enabled over 10,000 borrowers. It said it has deployed more than INR 150 crore (USD 20 million) in loan.
According to the company, most of the students don’t get loans as banks rely on applicant’s credit scores. Moreover, banks and NBFCs are less-likely to approve loans to students who opt for non-traditional courses such as coding, designer, data scientist, and scriptwriting, among many others.
As of last year, education loan market in the country has depreciated by 25%. The number of students who received education loans fell to 250,000 from 330,400 students as of March 31, 2015.
“By 2022, we need 700 million skilled workers. However, only 10% of the total workforce receives any formal skill training,” Chopra said.
The company said its decision to approve an education loan goes beyond the credit score. Eduvanz uses parameters like social media scores, education scores as well as taking guardians or parents as guarantors as required.
Its customers range from salaried or self-employed individuals looking to upskill their knowledge, fresh college students seeking new certified skills, and parents looking for flexible fee payment solutions in K12 segment for their kids.
Apart from Eduvanz, companies such as Credenc that raised USD 2.5 million from Omidyar Network and Better Capital last year, Credelia, and Shiksha Finance, among a few others provide online education loans.