CommonBond, a students’ loan lending platform, has raised $35 million in Series B round of funding led by August Capital along with Nyca Partners and the existing investors TriBeCa Venture Partners, Social Capital and Tom Glocer.
Founded in 2012, CommonBond is a marketplace lending platform that lowers the cost of student loans for borrowers and provides financial returns for investors. It aims to make loans more affordable to a larger portion of the society. From less than 2% annual percentage rate with fixed rates peaking at around 6%, young and new professionals in huge student debt can refinance up to $220,000 worth of loans. For this, the company asks for decent salary (triple figure) and an approved credit score. Till date, it has been grown to serve graduates of more than 200 graduate schools. By the end of 2015, it targets to serve every graduate program in the country which would count more than 2000 schools.
The new funding round has increased the total cash to $400 million. It’s big investors include former Citigroup chief executive Vikram Pandit and ex-Thomson Reuters chief Tom Glocer. Further to the recent funding, Hans Morris, former executive with Citigroup and ex-President of Visa who is now a partner with venture firm Nyca Partners, has joined the board as a new member.
CEO and co-founder of CommonBond explained, “We are thrilled to welcome some of the best investors in fintech today to the CommonBond team. We’re fortunate to have found investors who share our vision as we scale the business and continue to build a strong and lasting customer-centric fintech company.”
With the fresh new funds, CommonBond plans to build its current team of 35, which has doubled since the beginning of 2015, when it had only 15 employees. It also plans to develop and expand its data-intensive algorithm for determining client risk.
Tripp Jones, a recently joined board of directors at CommonBond and partner at August Capital said, “In just two years at national scale and with a lean team, CommonBond’s growth has been impressive and welook forward to supporting the company as it continues to scale.”
Morris added, “It’s clear to everyone that there is lot of room for innovation and improved customer experience in student lending, and we think CommonBond stands out as a company that is transforming that experience. The customer advocacy, trust and recognition that CommonBond has created is remarkable. And we love the team as much as the customers seem to.”