StudentFinance gets $41 million to help Europeans increase skills for in-demand jobs

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StudentFinance, a European fintech that finances educational programs for individuals through so-called revenue sharing agreements, has raised €39 million ($41 million) in a Series A funding round.

Founded in Spain in 2019, StudentFinance works with educational institutions such as Ironhack and Le Wagon to help finance those who wish to graduate in disciplines such as software development, cyber security and artificial intelligence, acting as an alternative to traditional bank or student loans .

The company says it has developed AI models to discover the most in-demand skills across sectors and map this to the most suitable education providers to fill that gap.

“We monitor and track publicly available job data, showing trends and fluctuations in labor demand,” StudentFinance co-founder and CEO Mariano Kostelec explained to TechCrunch. “We also use data from analyzing systemic changes and market changes, for example government incentives for companies to become ‘greener’. This gives us data on future growth – or decline – sectors.”

On top of that, Kostelec also said that they track salary data, which can indicate demand for specific skills.

“We develop machine learning models that use this data to predict future labor market demand for specific skills, and predict future income levels,” Kostelec continued. “This is an area we are going to invest more in.”

Actual, Kostelec said it plans to use its new funding to expand its own internal data and AI capabilities through strategic hires so it can better predict labor market demand.

From the student’s perspective, income sharing agreements mean that graduates only pay for tuition when their salary reaches a set threshold, after which they pay back a percentage of their monthly income back to StudentFinance over a set number of installments that fluctuate based on earnings. If they never get into work, then they pay nothing back, although they are still liable to pay back if they get any sort of job that reaches the earnings threshold, even if it’s completely unrelated to their course.

In addition to the interest payments from each student, StudentFinance’s revenue stream includes fees it charges course providers for each student who starts a course.

Studentfinance co-founders Marta Palmeiro (CFO) and Mariano Kostelec (CEO) Image credit: Student Economics

Fourth industrial revolution

The funding comes as the World Economic Forum (WEF) predicts that more than 1 billion people will need reskilling by the end of the decade, with the so-called “fourth industrial revolution” adopting rapid societal changes through technologies such as AI and automation. As such, a number of VC-backed student finance platforms similar to StudentFinance have emerged, including San Francisco-based YC alum Blair, New York’s Leif and Arlington’s Vemo Education.

StudentFinance is looking to do the same, but with a focus on the European market. The platform and funding is currently available in Spain, Portugal and the UK, although it has also partnered with education providers in Germany and Finland to offer its platform on a SaaS basis, with the institutions themselves organizing the funding. Later this year, StudentFinance plans to expand its full service to Germany, after receiving regulatory approval from the German financial regulator (Bafin).

“The demand for upskilling the workforce has never been greater,” Kostelec said. “We are on a mission to close this gap across Europe. We aim to expand our coverage to build the workforce for the future, particularly in areas such as technology, AI and climate change.”

Prior to now, StudentFinance had raised a $5.3 million funding round almost two years ago, and with a new cash injection of $41 million, the Spanish startup is well-funded to support both debt capital and operating costs, as well as bolster hiring. ambitions.

Furthermore, the Madrid-based company is preparing to launch alternative repayment options including fixed installments, which are fixed monthly amounts that are not directly linked to the student’s income.

The Series A round is a mix of equity and debt, although the company declined to disclose the split. It said 70% of the round’s “funding capacity” would be allocated to Spain and Germany, with the remaining amount aimed at the UK where it soft-launched last year.

The equity element was led by Iberis Capital, with participation from Armilar Venture Partners, Mustard Seed Maze, Giant Ventures, Seedcamp, Monzo founder Tom Blomfield and former UK MP Ed Vaizey. The debt element was provided by the French asset manager SmartLenders Asset Management.