MBA candidates at the world’s best business schools will be able to get more cash to pay their fees through crowdfunding startup Prodigy Finance.
The London fintech business set up by MBAs to help b-school students fund their education has raised $240 million in funding, to enable the company to lend more and expand in the US.
Prodigy helps students from places like India, China, and Africa raise cash from wealthy alumni who loan them the dosh based on their future earning potential — which, for an MBA grad, is high.
International students find it hard to get loans to pay their tuition fees because they often don’t have a credit rating in the places in which they seek to study.
The platform works with most of the world’s top business schools including Harvard, Stanford, Wharton, INSEAD, London Business School, Cambridge and Oxford. Founded in 2007, Prodigy has financed $325 million worth of loans on its platform, helping some 7,100 students access business education.
Ilian Mihov, dean of INSEAD, said: “About 25% of our students are funded by Prodigy Finance loans and they come from all over the world, many from countries where it would be difficult to get a bank loan or other forms of financing.
“It’s an important source of funding at INSEAD and helps contribute to diversity, as we have over 90 different nationalities represented. Diversity is essential to our DNA, as it’s a source of creativity and understanding.”
The funding round, $40 million in equity from leading London venture capital fund Index Ventures, among others, and a $200 million debt facility from an unnamed investment bank, is both good news for would-be MBAs and a success story for INSEAD. Prodigy was founded by three graduates of the world’s highest-ranked business school, who witnessed their classmates’ loans get shot down despite their high earnings potential.
Prodigy also lets alumni of business schools fund students at those schools while earning a financial return on their investment, though Prodigy emphasis the “social impact” factor to potential investors.
Index Venture’s Neil Rimer said: “Every decade, the number of international students doubles and our hope is that Prodigy Finance will help accelerate that growth. Our planet sorely needs more educated citizens of the world.”