Delhi-based education loans startup Credenc raises $2.5 million in a seed funding round led by Omidyar Network India, with participation from EMVC, Better Capital, and IIMK Alumni Fund.
Founded by Avinash Kumar and Mayank Batheja in 2017, Credenc works as the digital finance desk of over 200 management colleges across 17 cities in India. It undertakes a rigorous evaluation process using a proprietary artificial intelligence (AI) model, which tracks 15 million data points to predict the future income of students applying for loans.
According to a statement released by the company, the funds will be used by Credenc to expand operations to 1,000 colleges across 50 cities over the next two years. It also plans to hire across technology, credit and banking partnerships, and build up a loan book of $0.5 billion over the next 5 years.
Commenting on the investment, Mayank Batheja said, “Currently, only five percent of the $50 billion annual spend on college tuition fee is financed by organised lenders. We believe this penetration should be at least 15 percent.”
Avinash Kumar further added, “Our target segment consists of the top 10,000 colleges in India, and we would like to ensure that we are available for the top 10 percent of students from these colleges”.
The startup claims to have mapped 70,000 job roles across 50,000 companies in India. After providing financial support, Credenc works with students and helps them with employability services, hand holding applicants as they transition from student to professional life.
Speaking on the investment, Sarvesh Kanodia, Associate, Omidyar Network India, said,
“Credenc’s differentiated lending model provides financing to deserving students, which helps them access post-secondary education and get meaningful employment. Avinash and Mayank’s solution will help in creating a level playing field for students from the Next Half Billion population by making quality education more accessible. We see this partnership as an opportunity to demonstrate that a highly impactful and profitable business can be built in the large and untapped higher education financing space.”