Mpower Financing, a company that provides education loans to international students, has raised $152.5 million from existing investor Tilden Park Capital Management and investment management firm King Street Capital Management, according to ETtech report. Other investors that participated in the round are Drakes Landing Associates and Pennington Alternative Income Management.
“The round includes $100 million in equity financing and about $52.5 million in debt financing from both firms,” Mpower’s India GM, Ashwini Kumar, said.
The fresh funding will be used to directly support students, and automate and scale its operations, said chief executive Manu Smadja.
“While we do have a line of credit with Community Investment Management, this financing will enable us to directly support students, which means that a lot of the loan production will be retained in-house going forward,” Kumar said.
Part of the proceeds will also be used to grow Mpower’s team in Bengaluru. “We currently have 77 employees in the Bengaluru office, of which close to 45 were hired in 2021 itself. We hope to grow it to at least 200 by the end of next year,” Kumar added.
Started in 2014 by Manu Smadja and Michael Davis, Mpower works with over 370 top universities and colleges across the US and Canada to provide financing to students from over 200 countries.
The company makes its loan decisions based on the domestic and overseas credit data as well as the student’s future earning potential, rather than his or her family’s assets or income. It also helps students build their credit history and provides personal-finance education and career support. Since its inception, Mpower said it has received applications for loans worth over $2 billion in total.
India is the largest market for the firm, accounting for about 20% of its overall volume, Kumar said.
“We are excited to partner with Mpower Financing as it operates a truly differentiated business model where it not only lends to students but also offers career guidance and support,” said Chris Gamaitoni, managing director of Tilden Park Capital Management.
