Mumbai-based student loans startups Eduvanz Financing is raising INR 23 Cr ($3 Mn) in Series A funding round led by Sequoia’s SCI Investment VI fund. Redwood Trust, Vistra ITCL on behalf of Unitus Seed Fund India II and QED Innovation Labs will also be participating in this round.
According to the ministry of corporate affairs filings accessed by Inc42, the company has already received INR 4 Lakh ($5K) from Redwood Trust in exchange for 136 Series A compulsorily convertible cumulative preference shares (CCCPS). Overall, Redwood will be investing INR 12.59 Lakh ($16K) in Eduvanz Financing for 421 Series A shares.
The filings further add that Sequoia’s SCI Investment VI fund will be investing INR 17.83 Cr ($2.27 Mn) for 59,626 Series A CCCPS. Vistra ITCL on behalf of Unitus Seed Fund India II will pick up 14,678 shares worth INR 4,39 Cr ($585K) and QED Innovation Labs will pick up 2,342 shares worth INR 70 Lakh ($93K).
Eduvanz Financing will be allocating 77,067 Series A shares at a face value of INR 100 ($100.31) and premium of INR 2891.31 ($38.54) each share leading to INR 23,05,32,287($3 Mn). The usage of the funds has not been revealed in the filings, but Inc42 has reached out to the company seeking more details on the same.
Founded in 2016 by Varun Chopra, Raheel Shah and Atul Sashittal, Eduvanz Financing is a non-banking financial corporation (NBFC) and private finance company that offers low-interest student, education, career, skill development loan.
The startup uses technology to assign credit scores to loan-seeking students, based on their socio-economic and demographic background. It has also partnered with more than 80 institutes such as Imarticus, K-11, and ISBM to boost its value proposition beyond loans to offer placement and scholarship support for students.
The company received its NBFC license from the Reserve Bank of India (RBI) in 2017, after which it raised $500K funding in a round led by Blinc Advisors. Last April, Eduvanz Financing had also raised $2 Mn funding from Unitus Ventures and the Michael and Susan Dell Foundation to expand its lending operations.
The Crunch In Students Loans
With over 33 Lakh Indian students going overseas to study every year, India is the second-largest source of international students after China. According to the Reserve Bank of India (RBI), tuition and hostel fees by Indian students studying abroad has increased by 44% from $1.9 Bn in 2013-14 to $2.8 Bn in 2017-18.
The spending and the prevalence of international universities are expected even more in the future, overcoming the current pandemic blues. Though loans come as a handy option for an average middle-class Indian student, it has shrunk by 25% between 2015 and 2019.
According to a Times of India report, the number of students able to secure loans from institutionalised banks has fallen to 2.5 Lakh in 2019 from 3.34 Lakh students as of March 31, 2015 due to high non-performing assets levels. The NBFCs have been filling that void to offer better financial solutions to students looking to study in India or abroad.
Interestingly, Sequoia backs another student loans startup Leap Finance, which was founded by Arnav Kumar and Vaibhav Singh in 2019. With offices in Bengaluru and San Francisco, the focus of the company is to bring financial access to Indian students pursuing higher education in international universities and colleges.
The post Student Loans Startup Eduvanz Is Raising $3 Mn From Sequoia, Vistra appeared first on Inc42 Media.
Author: Kritti Bhalla
Source : https://inc42.com/buzz/student-loans-startup-eduvanz-is-raising-3-mn-from-sequoia-vistra/
Date : 2020-08-04T09:54:19.000Z