US-based student loans company CommonBond secured an undisclosed amount of equity funding from education finance and services provider Nelnet on Thursday, along with a commitment to finance at least $150m of its annual loan volume.
CommonBond had raised $103m in funding before the latest round, including $3.5m from a seed round in 2012 which consisted of $1m in funding from an unnamed angel investor and $2.5m from unnamed alumni investors to finance loans.
The company then received $100m in series A funding and loan financing in 2013, in a round led by Tribeca Venture Partners, and which also featured Social + Capital Partnership and angel investors Vikram Pandit, Thomas Glocer and Tom Kalaris.
Nelnet invested through CommonBond’s newest funding vehicle, which allows investors to directly buy loans on the platform. CommonBond’s existing investment vehicles comprise alumni funds, warehouse lines and limited partnership funds.
CommonBond funds and refinances US student loans, and estimtes that it saves borrowers approximately $10,000 over the course of a loan by offering lower interest rates.
The company has financed more than $100m loans across more than 1,000 borrowers, and none of its borrowers has defaulted to date, while investors can earn an annual return of up to 4%. It will expand its platform to 700 eligible graduate degrees in law, engineering, medical and business, up from its current base of 100.