Washington DC and Bangalore-based fintech company MPOWER Financing, which facilitates funding solutions for international students pursuing higher education in the US universities, has raised $6 million (nearly Rs40 crore) in funding. The round was led by private equity firm Zephyr Peacock India.
Other investors including University Ventures, 1776 Ventures, Goal Structured Solutions, VilCap Investments and Fresco Capital also participated in the funding round, according to a statement issued by MPOWER and Zephyr Peacock on Wednesday.
MPOWER Financing Inc, the company that runs MPOWER Financing, will use the capital raised to enhance its technology platform and expand its marketing efforts in emerging markets with a focus on India.
The company was founded by INSEAD graduates Manu Smadja and Michael Davis. It partners with universities and investors to facilitate loans to students.
The company also builds credit history of students, offers essential financial products and provides them with personal finance education to prepare them for life after college.
The enrolment of international students in the US universities continues to grow with India and China being the two largest contributors. However, the options for educational loans are significantly limited for these students. International students cannot secure US Federal student loans and the private banks and lenders typically lend only to students with a US co-signer. MPOWER provides solutions to these challenges through its credit underwriting process.
"We look forward to Zephyr's support in expanding our local presence across new geographies. In particular, we are eager to work with Zephyr Peacock in strengthening our India presence, since the country is the largest source of our applicants," said Smadja, founder and chief executive, MPOWER Financing.
Zephyr Peacock India manages assets worth $225 million across three funds. It has investments in application software provider Miles Software Solutions, telecom services provider Metro Wireless Engineering India, electric utilities provider Flareum Technologies and life sciences tools and services provider Aizant Drug Research Solutions, among others.
"MPOWER is a pioneer in developing technology-driven lending solutions for international students in the US. Lack of financing options is a barrier for promising students seeking educational opportunities in some of the world's most reputed universities, and MPOWER is seeking to eliminate these challenges," said Abhijeet Kudva, director, Zephyr Peacock India.
Last year, the PE firm partly exited its investment in Pennar Engineered Building Systems Ltd.