Prodigy Finance has raised a total of £100m in a debt and equity funding round.
The specialist MBA student funding platform has taken on £87.5m in loan capital from Credit Suisse, alongside £12.5m of equity capital. The equity portion of the fundraise has been led by Balderton Capital, as well as a number of prominent Angel investors, including Betfair Co-Founder Ed Wray. The funds will boost the platform’s lending capacity as well as allowing for new hires.
Prodigy has facilitated over $130m in funding for roughly 2,000 MBA students across 92 countries since launching in 2007. The platform provides funding to allow high potential international students to attend the world’s top business schools in the US and Europe. Prodigy’s borrowers hail from all over the world, with three quarters representing developing nations.
Cameron Stevens, Founder and CEO of the platform, explained:
“We don’t care if you move from Shanghai, Dubai or New York because it is a global market. In the past, someone coming from China to study in London would have to stay in the UK to find work. Now they can return to work for Google in Shanghai.”
Prodigy assesses prospective borrowers based on future earnings potential, rather than relying on traditional credit metrics. The FT’s Jonathan Moules points out that the average salary for a Harvard Business School MBA graduate, just three short years after graduation, is a whopping $180k. The Prodigy strategy has been working so far. The platform’s historical repayment rates are in excess of 99%.
Prodigy has shifted away from the true “P2P” model, as evidenced by Credit Suisse’s £87.5m contribution to the platform’s balance sheet. But the company retains a peer-to-peer element, with a large number of MBA alumni channeling funds through the platform. Participants in the Prodigy marketplace buy a slice in a package of debt that supports a group of students from a single MBA programme, rather than investing in individual students.
Prodigy has been in and out of the headlines recently. The platform recently tied up with CommonBond – one of the big student lending platforms in the States – in order to gain access to a broader range of customers, via referral.
“Cameron and his team have created a global execution platform that gives investors the opportunity to fund international students in a meritocratic fashion that positively challenges the status quo. This is a huge win for the students.”
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.