CommonBond: education lending startup raises $100M led by Tribeca Ventures - Technical.ly Brooklyn

Business

Sep. 13, 2013 8:29 am

CommonBond: education lending startup raises $100M led by Tribeca Ventures

Founded by three MBA students at the University of Pennsylvania's Wharton School of Business, CommonBond seeks to provide lower interest rates on student loans by pooling investments from school alumni.

CommonBond's Summer's End Gala

From the CommonBond [CommonBondCo] Flickr page, taken Aug 2, 2011

Brooklyn Heights education lending startup CommonBond recently raised a significant $100 million equity round, led by Tribeca Venture Partners and, as the New York Times reports, including former head of Citigroup Vikram Pandit.

See the most recent limited SEC filing, which only highlights $3.1 million here. The three founders previously raised $2.5 million in 2012 to finance loans to fellow MBA students in Philadelphia.

Founded by three MBA students at the University of Pennsylvania’s Wharton School of Business, CommonBond seeks to provide lower interest rates on student loans by pooling investments from school alumni. Under it’s social mission, it directs part of its profits toward paying for schooling of children in Africa.

CommonBond also organizes a lot of happy hours, networking events and galas. The company blog is heavily tilted right now toward content from the summer interns. One intern writes about what “startup chic” has come to mean to him this summer. Evan Zawatsky, a marketing intern from UNC’s business school, writes of a desire from millennials for social networking that is less superficial:

What’s less clear is how CommonBond can sustain market beating interest rates when it is shouldering more loads than other lenders. It’s the balance of social entrepreneurship, between whether the customer bond mission brings about outpaces the additional costs.

CommonBond appears to be doing three kinds of work that other lenders do not traditionally do:

  • Assembling pools of alumni to fund student loans
  • Organizing social gatherings, which don’t appear to have a revenue component
  • An explicit commitment to philanthropy — one year of school funded in Africa for every fully funded MBA student

Judging by the site’s investor FAQ, CommonBond could rely on the fact that it’s only funding very low risk students from schools and programs with a high earning potential in order to sustain the lower cost of loans. With heavy hitting investors now in the mix, however, eventually CommonBond will have to expand its lending beyond the very best students at the very best schools, in search of growth, and at that point their loans may get riskier, making those three extra jobs tougher to sustain.

Advertisement

Check out the video from the company’s second midsummer gala here:

 

-30-
JOIN THE COMMUNITY, BECOME A MEMBER
Already a member? Sign in here

Advertisement

Could HEVO be Brooklyn’s next unicorn?

Brooklyn fintech startup aims to modernize payroll benefits

This edtech startup is teaching Brooklyn kids how to handle their emotions

SPONSORED

Brooklyn

You can win up to $360,000 at the WeWork Creator Awards

Baltimore, MD 21201

14 West

Senior Software Engineer (Java + Apache Spark)

Apply Now
Brooklyn

Partners Coffee (formerly Toby's Estate)

Customer Service & E-Commerce

Apply Now

Dog Parker is no more. Meet DogSpot and its national expansion plans

Inside the Brooklyn factory building stackable homes

Funding news about Simile

SPONSORED

Brooklyn

Explore how diverse teams build dynamic products with Dev Bootcamp

Sign-up for daily news updates from Technical.ly Brooklyn

Do NOT follow this link or you will be banned from the site!