CommonBond, a US-based student loans company backed by education finance and services provider Nelnet, has obtained $35m in a series B round led by August Capital, Inc reported yesterday.
August Capital was joined by fellow venture capital firms Nyca Partners, Tribeca Venture Partners and Social+Capital Partnership, and angel investor Tom Glocer.
Founded in 2012, CommonBond funds and refinances US student loans of up to $220,000, offering lower interest rates. The company claims to save graduates more than $14,000 over the course of a loan.
CommonBond is targeting a huge market, as student debt in the US currently stands at a total of $1.3 trillion. The cash will be used to double the company’s current 35-strong team and to further develop its client risk analysis algorithm.
Nelnet invested an undisclosed amount of equity funding in CommonBond in February 2015 alongside a committment to finance up to $150m in loans each year.
CommonBond received $100m in combined series A funding and loan financing in 2013. The equity portion of the round was led by Tribeca, while Social + Capital and assorted angel investors also took part.
The company also raised $3.5m in a 2012 seed round, split into $1m of funding from an unnamed private investor and $2.5m from unnamed alumni investors for loan financing.
David Klein, chief executive and founder of CommonBond, said: “We have proven that this is a platform where underwriting upfront is incredibly strong. We have earned the right to expand further.
“We will continue to methodically grow, making underwriting and modelling more sophisticated, so we can provide our service to more people without sacrificing credit quality.”