Fintech startup Leap Finance has secured a funding of $5.5 million led by Sequoia India as reported by ET Tech.
Leap Finance, which has a 25-member team, plans to deploy the cash raised to aggressively hire for its technology and capital markets teams in Bangalore and San Francisco, respectively.
Leap is an online platform that offers students planning graduate studies in the United States loans without any collateral at interest rates starting as low as 8%.
The company’s underwriting is based on a student’s future income, in a departure from the standard model where most lending is based on assets or current cash flow, which leads to systemic inefficiencies.
“Indian students make up for 25% of a class in many top graduate programs in the US…Yet, the education loans they avail of are at interest rates twice as high as their American peers, which we aim to bring down,” said Vaibhav Singh, co-founder, Leap Finance.
The Bengaluru-based company currently supports more than 150 US schools and is looking to finance 1,000 students this year.