Leap Finance Inc., a fintech platform for Indian students pursuing international higher education, has raised $5.5 million (Rs 40 crore) in funding led by Sequoia Capital.
Angel investors Bhupinder Singh(Incred) and Kunal Shah(Cred) among others, also participated in the round, Leap Finance said in a statement.
“A competitive financing product is the first offering and sets the base for our larger vision to become a cross-border neobank,” Arnav Kumar, co-founder at Leap Finance, said.
The San Francisco - and Bengaluru-based company was launched last year by Kumar and his IIT- Kharagpur batchmate Vaibhav Singh.
Singh had previously worked with Deutsche Bank, Capital Float and InCred. Kumar had in the past co-founded GoZoomo, a used car marketplace, and later went on to work with SAIF Partners as a consumer internet investor.
Leap Finance’s engine takes into account several alternative and derived data points to predict future income potential and offers loans in less than 10 minutes depending on the results.
The firm supports more than 150 US schools and is looking to finance 1,000 students this year. Currently, it is accepting applications from students starting graduate studies in the US in the upcoming fall season (2020), offering them loans with interest rates starting as low as 8%.
“Indian students studying abroad spend $15 billion annually and we estimate an annual credit need for $5 billion against this,” Ashish Agrawal, principal at Sequoia Capital India, said.
The broader fintech segment has seen heavy investor activity for startups across all stages. Startups in verticals such as wealth management and neo-banking have pocketed large cheques. Companies in the space are seeking to apply a technological angle to traditional financial products, and bring more people into formal financial structures.
Last month, digital payments firm BharatPe, which services offline retailers and businesses, has raised $75 million (approximately Rs 538.89 crore at current exchange rates) in its Series C funding led by Coatue Management and Ribbit Capital.
Before that, the payments company DotPe Pvt. Ltd raised $8 million (around Rs 56.8 crore) in its seed funding round. The round was led by payments company PayU and Chinese conglomerate Fosun International. Snapdeal founders Kunal Bahl and Rohit Bansal along with PayU executive Amrish Rau also participated in that investment.