Online student lender to grow Cape Town presence after R3 billion funding round
Prodigy Finance, a UK-based fintech platform that enables financing for international postgraduate students has closed a $240 million (R3.19 billion) funding round.
This includes a R532 million Series C equity round led by venture capital firm Index Ventures, with participation from Balderton Capital and AlphaCode; and a R2.66 billion debt facility led by a global investment bank.
The company, which has 126 staff across offices in London, Cape Town, and New York, offers loans to postgraduate students accepted into business, engineering, law and public policy degrees at the world’s top universities, such as Harvard, Oxford, INSEAD and the University of Cape Town.
The company has provided more than 7,100 students over R4.32 billion in funding since its establishment in 2007.
The business expects to lend to 20,000 customers by the end of 2018.
This fundraiser marks the firm’s tenth anniversary, and will help the UK-headquartered company expand its operations and create highly skilled jobs in its subsidiary locations – Cape Town and New York.
Prodigy Finance’s global credit model assesses applicants based on projected earnings rather than historical credit, allowing the company to provide funding to students without collateral, a cosigner or guarantor.
It said that, to date, more than 80% of its borrowers have had no alternative access to financing. It also enables qualified investors, and the alumni of top schools, to help fund students from their alma mater or home country, while earning a financial return.
Cameron Stevens, the founder and CEO of Prodigy Finance, who hails from Cape Town, said: “We’re excited about this investment as it will help us double the size of our student portfolio. We saw a market failure in international lending and have spent the last decade rectifying this problem.
“Our business model and the schools we work with have also allowed us to build a talented team of experts, including our tech professionals and programmers in Cape Town. We believe in financial inclusion and talent mobility, and look forward to continuing to help international students break the funding barrier and further their education at a top school.”
Read: UCT launches first specialist Fintech degree in South Africa
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