Prodigy Finance, an online lender based in the U.K. that focuses on providing international student loans, has raised $240 million in venture capital equity funding.
According to a news report in Reuters, the venture capital is a combination of debt and equity funding and will be used to help the company expand into the U.S. On the equity side, Prodigy Finance raised $40 million in a round led by Index Ventures. Other investors that took part in the funding were Balderton Capital and AlphaCode. On the debt side of things, Prodigy raised $200 million in a debt facility led by an unnamed global investment bank.
Prodigy Finance is focused on providing education loans to postgraduate international students located in the U.S., U.K. and other universities in Europe — a subset of people who would normally have a tough time getting international student loans from financial firms, noted the report.
When providing the education loans, Prodigy Finance looks at the potential earnings of the student based on their degree and will also use credit scores from the countries where they are based. They grant student financing accordingly.
“We have thousands of data points from our partner universities to understand what the earning potential is,” Cameron Stevens, founder and chief executive officer of Prodigy Finance, said in an interview with Reuters.
The company told Reuters that proceeds from the funding will be used to expand in the U.S. by adding more classes that are eligible for its student financing, as well as fields such as business, engineering and public policy.
The round of funding comes at a time when online lenders are being put through the paces when looking for funding. According to a news report in CNBC, BlueVine CEO Eyal Lifshitz said that when meeting venture capitalists in recent years, the company has had to have a good story as to why it is different from other online lenders in order to get funding — something it didn’t have to deal with three years ago.
BlueVine, which is an online lender that is focused on the small business market, raised money last year and has secured a total of $188 million in venture capital funding since 2013. The executive noted that investors are looking at the “viability of the overall lending model” and what effect it will have on the weaker players.