As concerns over the mounting student loan debt facing the U.S. continue to grow, venture capitalists are looking to startups offering alternative financing solutions as a solid investment.
CommonBond, a lending platform marketplace aimed at students looking to fund their college education, announced yesterday (Sept. 8) it secured $35 million in a Series B funding round.
The FinTech company, which is aimed at both lowering the cost of student loans for borrowers as well as ensuring financial returns for investors, also reported it is on track to exceed $500 million in funded loans by the end of 2015.
CommonBond said the funding will be used to support an aggressive hiring plan, double down on its investment in technology and significantly increase marketing efforts. The latest funding round was led by August Capital, with Nyca Partners and existing investors participating.
“We’re thrilled to welcome some of the best investors in FinTech today to the CommonBond team,” David Klein, CEO and cofounder of CommonBond, said in a company release.
“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.”
According to the company, its loan originations have surged to more than six-fold year over year through the first half of 2015, and CommonBond anticipates topping $1 billion in loans funded in 2016.
Hans Morris, former Visa president and current managing partner of Nyca Partners, pointed out the viability of online lending marketplaces, especially for student lending.
“It’s clear to everyone that there is lots 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,” he said.
“The customer advocacy, trust and recognition that CommonBond has created is remarkable. And we love the team as much as the customers seem to.”
CommonBond isn’t the only student loan marketplace receiving a great deal on interest from investors this year.
In August online lender Social Finance raked in around $1 billion from its collective investors, bringing the startup’s value to roughly $4 billion. If that valuation pencils out right, SoFi would find itseld in the top 30 U.S. banks by market cap.
Earlier this year, SoFi’s Series D funding round, which it closed at $200 million, solidified its spot as the largest of the 17 alt-lending rounds in 2015.