Online student lender CommonBond has laid off 22 employees — 18 percent of its staff — as it plans to shift investment into new areas.
The layoffs were announced to employees in a company meeting on Tuesday (January 16), a company spokeswoman told Reuters in an email.
Founded in 2012, CommonBond is a lending platform marketplace serving students looking to fund and refinance their student loans at lower interest rates. The spokeswoman said that the company processed $1 billion in loans in 2018, but is now increasing investments into areas that can have a better chance of generating higher returns in the future. In addition, CommonBond plans to improve its refinance business, as well as utilize a recent acquisition to expand its in-school business.
“We continue to hire in areas that amplify our growth, and we remain on the lookout for companies to acquire that allow us to serve the market in efficient and differentiated ways,” said the spokeswoman.
In March, CommonBond raised $50 million in a round led by Fifth Third Capital Holdings, with participation by First Republic Bank and Columbia Seligman Investments. The funding brought CommonBond’s total amount raised to more than $130 million, with backers that included investment manager Neuberger Berman, former Citigroup CEO Vikram Pandit and former Thomson Reuters CEO Tom Glocer.
“This round of equity powers our expansion as a leader in FinTech, enabling more ways for us to improve the financial health of our members,” David Klein, CommonBond CEO and co-founder, said in a press release at the time. “We’ve set out to build a great company for the long term by focusing on the fundamentals — exceptional customer experience, best-in-class technology, and a culture of respect and discipline. I’m incredibly proud of the team for maintaining maniacal focus on our customers and broader stakeholders, positioning the company exceedingly well to continue scaling on behalf of our members.”