Dublin fintech start-up raises €150m as student loan market soars

1 Apr 2016

Future Finance, a start-up based in Dublin, has become quite the prize catch in the fintech world, it seems, as another €150m has been raised by the student loan specialist.

€24m of that has been converted into equity, with the remaining €125m set to support the company’s lending capital as its business, primarily in the UK, soars.

The total raised by Future Finance at this stage is €230m, with the company now employing around 50 people in Dublin, with offices in London and Munich, too.

Future Finance’s entire business model is aimed at a niche in the banking industry – there seems to be an awful lot of these niches – with students looking to borrow seemingly being cut out of the system.

Big base

“Since we started in 2014, nearly 40,000 students have sought loans from us,” explained Brian Norton, CEO of the company. The way his team open up lines of credit is through a completely data-driven programme, built from scratch in Dublin.

Future Finance essentially values every course in every college, establishing potential payback from students who come looking to borrow. So if you were studying to be an actuary, for example, the likelihood is you could borrow far more than someone studying arts.

And the system clearly works, with the company’s new investors including QED Investors, Blackstone Strategic Opportunity Fund, Colchis Capital, Invus Opportunities, KCK, DW Partners, Fenway Summer Ventures, Ridge Road Partners, 1/0 Capital and others.

“Most of our business is in the UK at the moment, but we have contacted the Central Bank in Ireland to start operations here, too,” Norton said. A German arm has just started up as well.

Of the near 40,000 applicants so far, around 3,500 have been approved in just a few minutes, with those figures showing a clear thirst for the service. That’s why it enjoys credit lines in Goldman Sachs, and why it needs such an injection of capital to keep up with demand.

“Future Finance’s use of technology and data to democratise higher education is a huge win for students and society,” said Nigel Morris of QED investors, who sees “enormous potential” for the business in future. Should Germany and Ireland follow the same path as the UK he won’t be far wrong.

Piggy bank image via Shutterstock

Gordon Hunt was a journalist with Silicon Republic